**Warning: This is a very risky play, trade at your own risk**
If you are not familiar with this saga, feel free to catch up:
Has the Squeeze Been Sqoze? Absolutely not
Will the squeeze be sqoze? Potentially
Strap in. This is going to be exhaustively long, but I have a lot to say.
Please see my other work. I’m not here to convince anyone of anything. I am not a shill, I am not here for confirmation bias, I am a pragmatic, neutral party. Anyone who calls me a shill in the comments certainly cannot read and did not do their proper DD on me. If you read my previous works dating back 3 months ago you will see how terrifyingly accurate I have been thus far. Even in Part 5 I nearly perfectly predicted all of Friday’s entire movements.
Note: That does not mean I will remain accurate for the entire duration of this saga. I also am not saying all of this to flex, it’s because I am tired of being called a shill when I was the original predictors of this squeeze and have since provided logical thought that has been proven accurate. This doesn’t mean you should take what I am saying as truth, but it does mean that if it doesn’t align with your thoughts you should probably put down the kool-aid, loosen up the tin-foil hat, and listen to someone else’s opinion so you can make the best decisions for yourself.
I am not a financial advisor, in fact, this isn’t even advice. It is simply my analysis of the situation as it has always been. One thing you will find different with my work than others is my research is changing as the landscape changes. If people are still screaming about the original tactic and not acknowledging the new landscape we are in, please be very cautious of making financial decisions based on what these people have to say.
I also want to make it crystal clear that I think the squeeze has not been sqoze, however, the landscape is very different now.
Finally, any PT’s including support and resistance are beyond difficult to predict. Please do not take these as certain numbers. It’s the guess right now and that very well could change as soon as the market opens Monday.So What Happened Friday?
For the sake of this not being an entire novel, I encourage you to read Part 5 as I think that prediction is precisely what happened. To summarize, we saw a bulltrap open us up in the morning and we ran to the 135 resistant point, volume wasn’t enough and we tested in twice before people realized we would not be able to break through, that’s when selling and more shorting occurred. The price dipped down to around 88. Now, I didn’t mention this in the DD but I did mention it in the comments section that I expect interesting price action around 2pm. Why? Because of the call options expiring ITM.
I think these shares were already covered. I know we expect a higher price increase, but why? Where is the math to back that the price should go higher during these covering sessions?
Total Options That Expired On 02/26 ITM: 22,713 Data from here
This would equate to 2,271,300 shares
At 13:02 the price fell to ~86, this was the bottom before the upswing at the end of the day. By 13:07 there was a volume of over 20,000,000 in the buying direction.
Not 5 minutes after we found the bottom for the day there was nearly 9x the amount of volume required for every single one of these options to be covered.
At 13:07 alone there was a positive net change in volume of 17,656,000 nearly 8x the amount of volume required for every single one of these options to be covered…within 1 minute.
The rest of the day continued to uptrend where we saw the price rise back to ~121. Then it began falling off again, as did volume.
Now, ask yourself…why would this be the case? Because none of the price increase at the end of the day was organic purchasing, this was the ITM calls being covered.
At this point I’m sure you’re ready to stop reading and call me a shill, but I encourage you to carry on so we may understand what comes next. This may not fit your narrative, and that’s ok. A squeeze is possible, it might just be time to think that it won’t be happening quite the way you imagined.Before we move on to what comes next, let’s play with a few more numbers and talk about this idea of holding.
For some reason, people still believe that holding your shares is preventing HF’s from covering. I cannot express how untrue this sentiment is. Holding is a valid play, but it absolutely should not be an attempt from keeping your shares from being bought by shorts. A 5 second look at any chart could show you there is more than enough sell volume for shorts to get their shares elsewhere if you are not willing to part with them.
Let’s take the largest post on r/gme as an example.
The top post of all time received 59,600 upvotes. According to the comments most people are actually holding only about 1-10 shares each. But for the sake of the argument let’s get ridiculous and say every one of those upvotes has someone who owns 100 shares of GME. Let’s also assume every single one of these shares have been restricted from being borrowed to really screw these guys.
That’s a total of 5,960,000 shares that are being tucked away so HF’s can’t get their grubby little paws on them. On Friday alone, 91,960,000 shares were exchanged. So even in the most ridiculous of circumstances there were plenty of other sellers for shorts to purchase their shares back from.
Holding is certainly a valid play, but there are two things holding certainly does not do:
- It does not increase the price of a stock
- It does not prevent HF’s from covering
If you are holding solely because of these two reasons, then you are playing this wrong. There are three reasons to actually hold:
- You absolutely do not want to sell at a loss and you believe the short squeeze is imminent, so you are patiently waiting for it to occur.
- You are already positioned extremely well like DFV who has a cost basis of 26.7896
- You are long on the company and the squeeze is just icing on the cake, you can shut off your computer for a year with no concern and come back to know that you are profitable.
If you don’t believe me, then please examine the evidence.
When you purchase a stock the price goes up, when you sell a stock the price goes down. So what happened when RH restricted trading? The price plummeted. Why? Because holding and selling were the only options.
Let’s play another absurd game and pretend that 100% of shareholders held when trading was restricted. The price would have gone completely sideways, it would not have gone up or down.
But let’s be realistic, that will never happen. Even if retail traders decided to hold, institutions certainly are not running around screaming that they are diamond handed apes who would rather go bankrupt before giving their shares up. No, no. They are going to take their profits and they will do so at your expense. You call them allies which they are not, they are here for profits as we all are and they will gladly sell with 100% gains while everyone else is waiting for 10,000% gains.
I want to pause for a moment in this DD and take a moment to point something out. Even though I’m not trying to convince anyone to sell, I have been called all sorts of names as though I’m evil for offering my opinion and analysis of the situation. But let’s be absolutely clear. You are the ones peer pressuring people into holding. You are the ones trying to convince people of your narrative. You are the ones who will be responsible when someone takes their life if this does not go the way you hope.
If you have made it this far, congratulations, I would love to have a discussion regarding the “hold” play and how people could argue this is a viable tactic for any of the reasons not outlined above.My Thesis
My thesis remains the same, the shorts want a short squeeze. Yes, this sounds absolutely absurd but they are already making a fortune off of this. They need to as most of them lost a lot of money on the first round. They are reporting their losses publicly…but they have not disclosed their gains.
I think they are intentionally opening unfavorable short positions in order to trigger a squeeze. They open and immediately begin to cover creating the much needed buying pressure that triggers FOMO and market purchasing as well. This allows the price to soar and they absolutely do not intervene.
Once it reaches a massive sell wall or what they think is the peak, they begin shorting on the way down, opening new, extremely favorable positions. The gains from these new positions offset their losses from the unfavorable ones…by a lot.
Institutional traders are not stupid, they see this is happening and also capitalize on it adding to the buying pressure at the beginning of a squeeze. They ride it up and they are part of the massive sell walls. As I mentioned before they are more than happy with their 100% gains in a day and have no intent on diamond handing this into the Earth.
So institutions ride it up, sell at the top, where shorts begin opening new positions on the way back down. They then short just enough positions at the bottom so that this could be triggered yet again. Rinse and repeat.
I think the idea of the Interstellar Yo-Yo was very close to being accurate except it was missing one key component, “Snidely” in the story is intentionally doing this.
A circumstance like GME will never happen again, when this is all over there will be new regulations in place that don’t allow these kinds of things to happen. Institutions and HF’s would be out of their mind to not profit on this for as long as they can.
So my thesis is suggesting that there will not be one massive short squeeze but instead a series of squeezes before this thing finally runs out of gas or is regulated into the ground.
Let’s think about that for a moment.
If your original PT on GME was $1000, you are already almost there.
The first squeeze took the price from ~$12 to ~$500, ~$488 increase.
The second squeeze took the price from ~$40 to $200, ~$160 increase.
So, already GME has increased around $648. You are now only a $352 increase away from your $1000 PT.
Is a massive short squeeze still possible?
Yes. However, so much of the DD floating around is all talking about possibility but we as investors don’t care about that. We care about probability.
So what is the probability of a massive short squeeze? Well, there would need to be a significant catalyst like we had on the first go around such as Cohen joining the board. I think there are still several catalysts which I outline in GME Short Squeeze What Comes Next Part 3. There could very well be new catalysts that I have not mentioned since that post, such as Cohen getting appointed CEO as I have learned many believe based on his Tweet.
Let’s talk numbers.
There are two very important numbers that need to be broken for a massive squeeze to be possible.
$170 – This is the upper limit of the downward channel and if this is broken not only does it indicate a trend reversal and potential massive bounce, but there is little to no resistance to take us to the next important number.
$200 – This is a MASSIVE sell wall. Why? Well, I think this is where a significant amount of shorts are positioned. Probably not right at $200, they probably shorted ~$205 but absolutely do not want anyone to break through that wall.
If this sell wall falls, it could prove to be an incredibly massive squeeze however it would need to rise a decent amount beyond the $200 wall and maintain that price point to force shorts under for a long enough time period.
If this happens, it will begin a domino effect of the well positioned shorts chasing them all the way up to the shorts who entered over $400. At this point, FOMO + shorts covering could certainly drive the price well over $1000.
But what is the probability that this will happen?
Without a catalyst or an enormous amount of volume.
Let’s consider the first squeeze and volume for reference.
Jan 22nd: This was the highest volume at 197,157,900, the high was 76.76 and the low was 42.32
Absolutely insane volume, but it didn’t move the price all that much (I mean at least in comparison to other days)
Jan 25th: Volume **177,874,000 H:**159.18 L: 61.13
Jan 26th: Volume **178,588,000 H:**150.00 L: 80.20
Jan 27th: Volume 93,396,700 H: 380.00 L: 249.00
Jan 28th: Volume 58,815,800 H: 483.00 L: 112.25
Jan 29th: Volume 50,259,200 H: 413.98 L: 250.00
See the pattern?
25th: 177M volume to nearly triple the price (160%)
26th: Even more volume to only double the price (87%)
27th: Half the volume for a 52% increase
The volume decrease is directly proportionate the the price increasing/decreasing, with the exception of beyond the 28th as trading was restricted. These first two days were crucial to triggering the squeeze.
The 28th and beyond trading was restricted, but if everyone could only sell or hold, why wouldn’t the price immediately fall? How could there still be support? This was shorts covering. Between just those two days there was ~109,000,000 shares exchanged where nearly everyone could only sell. A perfect time for shorts to cover.
But I thought when shorts cover the price is suppose to go up?
Absolutely…if trading wasn’t restricted. Because virtually everyone could only sell, this means that almost all of the shares that were exchanged during these days was purchased by shorts and sold by panic sellers escaping the trading restriction FUD.
So, as strange as it seems, I think the price going up was some shorts covering but for the most part, I think they covered while the price was falling. I know this seems counter-intuitive, but regardless of the amount of shares that needed to be covered, the amount of selling was able to drive the price down while they covered. Again, think about how there possibly could have been any sort of support while trading was restricted, someone was buying massive amounts of shares as the price fell…and it wasn’t us.
So, Hooman, if you think they covered already then why do you think a squeeze is still possible?
Because of my thesis, entirely new shorts opened entirely new positions. Perhaps some of the old HF’s also did to try to recoup some losses. Last week we almost forced this to happen all over again, but a TON of new shorts opened positions and the sell wall at $200 prevented us from tipping that very important, very first domino. This isn’t the same landscape we were in where shorts were poorly positioned at very low numbers and we were able to catch them with their pants down, this is a different situation entirely.
That situation is still squeezable. The question is…how?
Volume. Volume. Volume.
Sheer and pure buying power.
We would need those first two very important days to happen again and push us past that $200 sell wall AND hold us there in order to force the well positioned shorts to close. We were so damn close but couldn’t quite break it. This is precisely why my predictions for Friday were so accurate.
A catalyst, a whale, large global sentiment again, FOMO; there are A LOT of different ways this is possible, but as I mentioned before; we as investors deal with probable.
In one of my original posts, long before this became a meme stonk, I literally used the word imminent in the title, that’s how sure I was that the data and catalysts were aligned to create this perfect storm. If you now notice, all of my titles are What Comes Next? That is because this is the honest truth: literally no one knows. Why? Because third part intervention is now required for this to be possible and global sentiment and FOMO has worn off, more than that a lot of people have been burned and all the people who are still willing to play this stock are already bagholding and no longer have the capital to help with momentum.
This has gone from a sure thing, to a straight up gamble.
If I had to give it a probability, which I really don’t want to do I would have to say 50/50. There is nothing significant pointing to anything that could get us past $200, but it is still possible with catalysts and other factors.
What appears more likely is that this will be a series of squeezes up until it is regulated to death, people get bored, or a catalyst pops the MOASS’s.
But you can be certain of one thing: this will end.
It does NOT have to end with a MOASS, but it might. My guess is that if there is no significant catalyst that ignites the MOASS by April, then this will be on pause. The interesting thing is that the possibility of a MOASS might never go away, but as time passes the probability lessens.
The reason for my April guess is that is the end of all of my upcoming catalysts that could act as triggers. It is very possible that this thing cools down after that, shorts enter unfavorable positions, and then Cohen makes huge changes that starts this thing all over again a few months later.
That being said, I think the most probable outcome is a series of squeezes that quite frankly, we are just along the ride for. There is no where near enough retail buying power anymore to force anything to happen, we are at the whim of institutions and big players who are deciding what comes next. How are they getting away with this? You. So long as the world things that Redditor’s are the reason this is happening, they can continue playing.I’ve Been Asked By Many of You to Examine the DD posted by u/HeyItsPixeL
Disclaimer: Both myself and this author are completely guessing as is everyone else. You should be reading everyones take and drawing your own conclusions.
Overall Impression: Well done DD. There was a lot of work and effort put into this and the assumptions were data driven. I will say, there is a hint of biased mentality here using the data to fit the author’s narrative. From a more objective point of view, this simply could have been shorts shorting. From a less objective point of view, it could fit support my thesis of shorts wanting these microsqueezes. Let’t go as chronologically as possible.
“On February 23rd GME opened at $44.97. Within the first few seconds GME reached its Day High of $46,23. GME also reached its Day Low at 9:50AM. So within 20 minutes after the market opened, GME reached its high and its low for the whole day!”
“Conclusion: Someone got the price down by 10 % within a couple of minutes but the same someone got it instantly back up after that, making it seem, that their solely goal was to get GME on the SSR for the next day while trying to avoid a panic sell off by dropping the price too low. And that is really important now!”
My take: I actually find this quite compelling. Either this was an institution attempting to bait out shorts while preventing a panic sell, or it fits my theory that this was actually a short who wanted a short squeeze. Both ideas are equally nuts, but we live in crazy times.
“TL;DR: Hedgies vs. unknown Institutions (UI). UI set everything up for a gamma squeeze and need the price to close above $50. HF know and don’t want that to happen and keep shorting the shit out of GME to keep it below $50. Both sides waiting for the other one to do something. Battle will start shortly before the market closes. Just a theory, no advice, ape hoping for banana 🍌💎🤲”
My Take: I agree. Large institutions are in this and want a squeeze as much as we do. Either that or a whale buyer like Chamath. I also agree with the $50 assumption, as that was a clear battle ground. Where we disagree is I think that last week was in fact, the gamma squeeze. However, we did not have enough volume to continue off of the gamma squeeze and tip the next, more important domino at $200+.
“On February 25th, there was a short volume of AT LEAST 33,000,000 to 51,000,000 Shares (highest report). “
My Take: Well, first of all I really wish there was a link to this data. But let’s go with Fintel’s data that shows 33 million short volume on 02/25. If you look at the chart for 02/25 there are two very clear moments where this volume occurred. My guess would be these shorts are positioned between 140-180. This is one of the reasons I have been saying that the 135 resistance is a key point. If this domino can be tipped it will drive us up to the 170 and 200 point, but will we have the volume to break through those gates when we get there? I’m not sure. I mean, I hope so! But I’m not sure.
Anything about naked shorting or what the actual short interest is or where the shorts are actually hiding, I’m not even going to touch. Why? Because it doesn’t matter.
This goes back to my original point, everyone is running around trying to answer the wrong question and prove that the squeeze has not been squozen. But who cares? I think 5 minutes of research can show you there is still an immense amount of short interest in this stock. What we need to be asking is WILL the squeeze be squozen and if so HOW?
March 19th: Including the options chain, XRT data, FTD’s, etc. I think this date could in fact act as a catalyst. But that’s about it. To me I would just add this to my list of potential catalysts and not think much of it. There is a lot of good information backing this theory, but there is a whole lot more theory backing this theory. In my opinion, this date should just be added to list of potential catalysts that could either A: spark the MOASS or B: It could be the date of another microsqueeze.
“MY Conclusion: The squeeze is inevitable.”
My take: Absolutely not inevitable. Certainly possible.Monday Predictions
Again, this is not including any unforeseen catalysts that could kick this thing off. I can’t express that enough. That is why holding is gamble that could really go either way. If something happens whether we see it or not it could send this thing skyrocketing. My predictions for Monday are based on no new catalysts.
Virtually, I am expecting a repeat of Friday that could end differently.
Open: I am expecting a sharp price increase at open, volume again will a key indicator as to which direction this is going to go.
I imagine we will struggle at 115 resistance but we can hopefully blow through that, the real test will come at 135 resistance.
If we reach 135 and blow through it, then this gets very interesting. I see the next resistance points at 150, 155, and then the really important ones of 170 and 200. I already explained that if we surpass these limits we are setting up nicely for a MOASS.
If we reach 135 but volume is too low (if you’re not sure how to gauge the volume keep an eye on how many times we retest it). If it takes more than two attempts, without a significant volume boost I can’t imagine us being able to handle the more difficult resistance points.
Shortly after Open: My guess right now is still before 10:00 (but it could go later in the day if I’m wrong about people covering on Friday) if we have not broken through those early resistance points, I think the slow bleed will begin.
My bottom PT is somewhere between 60-80.
Once we hit this mark, it gets difficult to predict. No one understands at all how the market fairly values this stock. The closest I would say would be 40-50 since thats where the greatest support we had was. It is entirely possible we see a bounce from the 60-80 price if shorts use this opportunity to cover, the market see’s it as a good point to enter and ride the wave, or if GME is now simply valued at this price due to the management changes that helped kickstart this second wave to begin with.
After that, it’s a blur. This truly is a day to day stock to analyze and sadly I cannot provide this kind of DD every single day. I don’t have work Monday so I’m considering live streaming this.So What’s Your Play Hooman?
Now, some of you will call me a shill_or_whatever but I simply have a different tactic. You might believe in the MOASS, but I’m not certain I think it’s probable. So I will be playing these mircosqueezes instead.
I mentioned in my last post, I have a really nasty wash sale. From what I understand, this is simply for tax purposes but my cost basis is still being increased by $100. IE if I purchase the stock for $80 my cost basis will be adjusted to $180. I’m still unclear on how this works, if someone could clarify in the comments section I would absolutely love to continue playing this stock. I will be spending the rest of today attempting to find this answer on my own time as well, so if I’m not responsive to the comments like I usually am, please understand I am attempting to prepare for this week.
So…as long as the wash sale isn’t an actual reflection of my real price, then I will buy as soon as the market opens. I will wait until we see how we handle resistance and if it looks like we have a shot at winning, I will buy more there to fight the good fight. If it looks like there is nowhere near enough volume and my purchase won’t make a difference, then that will be my indicator to sell.
This part is vital: If you are SELLING at the resistance points, you are hurting the cause. BUYING at these points is what will break through the wall. But if we make multiple attempts and cannot break through and it starts falling, then you might as well profit. You holding won’t change the fact that we couldn’t break resistance. I can’t stress this enough. If you simply sell when we hit resistance, you will be part of the reason the squeeze doesn’t happen. So either holding or buying will help push the price up at these targets, but if it is lost no matter what you do, then sell and prepare for another attempt.
Once it gets below 90 I will start scooping up shares again, averaging down with the price (I do this instead of going all in trying to predict the bottom).
From there I will wait to see if that second bounce does in fact happen again. If it does, I will sell at whatever I think the top is and then will re-enter just before close. Again, if there is enough volume and it appears there is a chance to break through then I will not sell, I will buy to try to push through that resistance.
Why would I re-enter just before close? Three reasons:
- I’m better positioned and back on board in case the MOASS does trigger
- I won’t have to buy at open if we see the same exact pattern on Tuesday.
- I am bullish on GME thanks to Cohen and would like to re-open my long position.
If the same pattern continues Tuesday, I will repeat this play until the pattern stops and I am sitting on A LOT more shares at a MUCH BETTER cost basis.
TL;DR: The squeeze has not been squoze, but it has become closer to 50/50 odds that it will occur. I think its more probable that a series of microsqueezes occur and I will play accordingly. Simply holding does not increase a price, buying does. My play will not only net me profits, but it will increase my buying power significantly. There is no TLDR to justify this post, if you don’t feel like reading then you aren’t playing with enough money to be concerned and none of this applies to you anyways. Just remember, this will all come to an end at some point and that end is not guaranteed with a squeeze. Happy trading!
Disclaimer: I am not a financial advisor, none of this is advice at all. It is my analysis of the situation that I have been following and my interpretation of the data at hand. The only direct advice I have for anyone is you should do what’s best for you. I am bullish on GME long term which makes this a lot less risky for me because if I end up with bags (as long as they aren’t too heavy) that’s perfectly fine with me. Anyone who tries to convince you I am a shill or bot is almost certainly an uneducated investor, I am not even a bear on this situation, but you should always examine the bear case, not blatantly ignore it in search of confirmation bias.