As some of you spotted out very well. the previous analysis/comparison didn't use the same timeframes - sorry for that, wasn't intentional.
In this case we compared the 2 short squeezes on the same timeframe - Daily time frame. Why? Because bigger time frames don't have the same date. -» GME is quite "fresh/new" versus Volkswagen so we have to use the best time frame that shows not too much noise but gives us the best info.
As we can see, prices always tells us what might happen. Yes the 2 short squeezes are different but fundamentally very similar -» a short squeeze happens in the same way but the corrections itself occur differently. GME shows 2 bigger short squeezes and VW actually one since the first bull candle could be seen as the run up towards the spike.
My theory is the following on the GME short squeeze:
1. Run up -» before the run up anyone who catch the trend is safe, you made the least riskiest investment. 2. Everyone get's hyped up and thus pushing up prices and creating the first squeeze. 3. The first bearish candle indicates that everyone who made nice gains is collecting profits & maybe Wall street closed some of their short positions. 4. The hype is still there and more people come in -» these are the late to the party ones creating another squeeze. 5. Second bearish candle -» anyone who made for the second time nice gains, sell their positions + anyone who panicked + Wall street closing short positions. 6. Hype and mass hysteria is fading away and price is seeking it's fundamental price -» all who bought the top is trapped.
It's very sad to see this because even when attacking Wall Street and beating them on their own game, many traders lost. Why? WBS, Reddit, Roaring Kitty especially used the same exact tactics to beat Wall street and making nice gains by using the retailers to pump up the price. Why? DFK's last statement showed 22million in total profit of which he cashed out 13 million -» he made his millions, there's no loss for this guy.
You see the point? Others already gained, and the rest is to be seen.
Thank you and I'm looking forward to read and reply to your comments!
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I hope the text isn't overlapping, for some reason this happens while it's completely ok on the chart itself.
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A positive case study:
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Hi everyone,
First of all thank you for all the comments!
Just to be sure: the entire idea shows the fundamentals/structure of a squeeze. Each and every squeeze has different reasons and stimulus behind it: I'm thus not claiming that both are the same in that sense. The Why is different in both cases.
Structural speaking yes -» same for bubbles, they have the same structure but why they happened is different.
Thank you!
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Hi everyone,
Update on what DFV actually cashed out - I wasn't aware of this when posting this one.
Here is the actual update - he cashed out 9 million between 26&27/01 by closing 300 call options.
You can find more details here:
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To make it clear: I believe in a free market and this should be ensured - so yeah I condemn RH and other shady businesses. It's quite a grey zone on some topics: for instance - every time a hedge fund gets a bail out, the tax payer pays for it -» so maybe we need to get rid of bail outs.
The whole things is bizarre and reason why I'm posting this is to make people aware to study and check their info - that's all, no one needs to follow my opinion, I'm just a random guy.
@valesch, it's a coin flip. So 50/50 or to be fair 70/30 it fails. But on the other hand its lose 100% vs. "to the moon" %
In times of gamification of the stock market I say: HOLD AND BUY THAT DIP!
Are you considering the buy limits that were implemented?
I agree that it doesn't look good, but can this affect something maybe?
What do you say about the similarities between GME and AMC? They are striking!
From my perspective, they are so alike that I still have reason to think the big hedge funds still are trying to push the price to limit losses. I've only heard one source saying they've closed it all out. All others that I've read have been saying that they only covered around 8% last week.
Considering the rise of the internet and communication technology allowing the whole world in on this trade, can this be something bigger than we think? The amount of people only buying and holding are still large. If the hedge funds still have a lot of shorts something can be around the corner.
The one problem I can see with the shorts that the hedge funds are having (if they have), is that those shorts might not have an expiration date... that is troubling.
This is all speculation and all these factors might be worth considering in all this. It's interesting never the less.
Btw, I'm not in on GME or AMC. Only following all of it because it is an extremely exciting time. Perhaps we are witnessing a change in how future trades between how "wealthy" and "poor" might shift.
Yes very exiting times that's why I'm following this too.
Very interesting what you say and maybe I'll make a comparison between AMC and GME.
The current technology and covid has indeed an impact on the overall stock market: easier to connect and with more people staying home they have "more time" to discover the financial world.
There's still a slim possibility for a squeeze in my opinion but it depends on multiple factors.
Short position don't have an expiration date - we both can open one and there's no date there. It could be that on some level (when trading with many millions) you have to pay for it, like interest.
Put options: yes they expire regardless of the situation.
Wall Street even pumped the stock up, I mean they compete between one and another - and then at higher prices could have gone short again.
Facts still have to come out - and a new framework is needed.
yes that could have made a dent in the overall momentum but many brokers, especially the commission free ones weren't even in the position to ensure liquidity via the money makers and the clearing houses.
At least that's how their system work, don't know if any other facts need to come out.
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@Zweal, The only time it dipped HARD down was because of RH trading limits. Sucked, but it was fun while it lasted
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@gmhutchison7, many brokers couldn't keep up but it was very very shady - "freedom of market"