Heartbeat_Trading

Gamestop- Idiosynchratic Systemic Risk

Long
BATS:GME   GameStop
The rise and fall of GameStop's stock in 2021 became a landmark event in financial history, captured in the recent film "Dumb Money." This saga, fueled by unprecedented social media buzz and retail investor sentiment, culminated in a historic short squeeze and raised critical questions about market access and regulatory oversight.

The Spark: A Sentiment-Driven Squeeze

GameStop, facing declining brick-and-mortar sales, became a target for short sellers who saw its business model as outdated. However, a surge of online optimism, primarily on platforms like Reddit and Twitter, ignited a buying frenzy among retail investors. This sentiment-driven buying pressure triggered a dramatic short squeeze, propelling the stock price to dizzying heights in January 2021.

The Fallout: Buy Buttons and Direct Registration

While the price eventually corrected, the social media fervor persisted. Concerns about trading restrictions implemented by certain brokers during the squeeze further fueled the fire. This led retail investors to embrace Direct Registration of Shares (DRS), a process that removes shares from the clutches of brokers and places them directly with the company. The goal: to limit the availability of shares for shorting and potentially trigger another squeeze.

DRS: A Unique Market Phenomenon

With over 74 million shares DRS'd as of the last earnings report, GameStop represents a unique case in market history. No other non-penny stock has witnessed such a large-scale withdrawal of shares from the open market by retail investors. This unprecedented scenario has created a volatile market dynamic with the potential for significant price movements.

Technical Analysis: Signs of a Potential Breakout

GameStop's price chart exhibits classic characteristics of a stock primed for a short squeeze breakout. Price consolidation since the 2021 squeeze, falling volume and volatility, and rising short interest are all potential indicators of pent-up pressure.

The Socioeconomic and Elliott Wave Perspective

Analyzing market movements through a socioeconomic and Elliott Wave lens, we recognize the crucial role of collective sentiment and mood in driving stock prices. GameStop's price trajectory aligns with a clear 5-wave Elliott Wave pattern, suggesting a potential return to all-time highs and beyond.

Potential for Government Intervention

The exponential counterparty risks associated with a potential GameStop squeeze raise concerns about systemic market instability. Government intervention, in some form, cannot be ruled out to mitigate the potential fallout of unrecoverable margin calls on significant market players.

The Sequel Awaits: A Story Unfolding

As time unfolds, the GameStop saga continues to evolve, captivating both financial experts and retail investors alike. Whether a sequel to the "Dumb Money" film materializes remains to be seen, but one thing is certain: the story of GameStop is far from over, with its potential consequences for the market attracting keen attention worldwide
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We will let the chart speak for itself

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Price is at the ideal trigger level for a possible short squeeze

Targets identified

Lets see what happens

Hope Kenny G. is ready (shout out to the Superstonkers)

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Quick potential trade to earn 10%

Not financial advice

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Target Reached.

Expecting a pullback and then another move higher..let see how things progress

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Should see GME make another high..lets see

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Ok looking for a pullback. lets see

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Shes got legsssss (in my ZZ Top voice)!!!

GME has major legs right now and is definitely using them.

I think its safe to say that its officially squeezing as we predicted

How high this goes- who knows

Expecting a huge gap down on Monday and then from there let the shenanigans begin

Putting a couple of targets on the chart but the best thing to do really is watch key levels (e.g. previous highs), pivots and volume

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Ok got the gap down we were looking for..now we are watching for price to make new highs

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Still looking higher.

Price appears to want to test the next support but selling volume is fading so thinking price heads higher by EOD...lets see

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Appears we are very close to bottoming.

Next expected target as of now...we are not psychics btw

This is about probabilities and momentum..watch for new highs and new lows and react accordingly

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Momentum picking up

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As we said...lets see

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Ok nailed it again. Next target and support identified. Lets see how this plays out

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Tracking price like a hawk

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Annnddd..we nailed it again to end the day..next support and targets in scope..

Lets see how this progresses

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Ok price hit our support region..if it holds we are heading higher

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Price touched previous support..this region should hold and we should head higher

Lets see

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Ok a move higher should be happening soon..

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We are still looking higher.

FYI- a sustained brake of support levels is what would make us look lower..stay tuned

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price action is definitely corrective in nature since the run up...

Thinking we may tracing out a triangle and if this is correct expect a sizeable runup and then a break back down before we continue higher...

Lets see

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As expected so far...

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As expected...just watching support levels for now

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Moving as expected.

Still looking higher

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Price hit support..still looking higher

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Testing previous support

This level should hold..lets see

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We really need price to breakout over 17.19

If not there is potentially for another move lower (white zigzag line) before we continue higher...

Lets see

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This could break either way..

We still need to get about 17.19 - 17.39 area

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We really need to get over that 17.19 - 17.39 region

Until then we are looking down before we start looking up again

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Near term targets

Still need to break over 17.39

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Lets see if we can push over 17.39

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Zooming out a bit..lets see

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If GME is going to squeeze then now would be an ideal time

See our other post on SPX and XLF for details but the broader market is in a perilous position

GME shorts are going to have some tough decisions to make coming up as soon as tomorrow (early next week if SPX/XLF price consolidates)

Chart shows the levels that we think will have explosive price movements

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Nothings changed- yet

As with any stock we need to make higher highs for the push to continue

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We said on 05/09 that GME Shorts would have some tough decisions to make come early this week...well here we are

Price during the pre-market session is directly within the target we called out last week...

Expecting to open higher and then head lower before resuming the trip to greater price levels..

Obviously if this does squeeze we will not be posting as much because we have to manage our positions

Good luck to everyone!

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Well price went right to where we thought

We havent seen a real pullback yet which i think we will still see..

Thinking price fills that gap and then heads higher...

Lets see!

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If we can push thru the yellow box we should be off and running again

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Zooming out as I think this view is helpful

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The typical daily lunch time price consolidation we are seeing is a good thing.

Better than price breaking down lower

Anticipate price will start to get some legs again after 1:30pm est
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Ok here we go....

Lets see

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As expected...

Rest of the week should be fun lol

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Lots of fun in the pre-market lol

Watch out using market orders (buy or sell) in this environment- the next available price might be further away than you think.

Chart shows key levels we are watching..pay close attention volume!

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And..Here..We..Go
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Oh how we love trading halts..

If we can hold this level then we should move higher

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Although we hate them pullbacks are healthy and frankly needed

As usual just watching support and resistance

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The $70ish area is what we are watching next with a move to $90-$100 shortly after

Lets see!

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Having fun yet?

Pre-market tomorrow will tell us a lot about how tomorrow is going to go.

But overall we are expecting FIREWORKS... with a side of HALTS

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Morning!

Expect to see the boatload of shares that became available to borrow put to use early this morning

The cost-to-borrow rate (sheesh!) tells the story on the problem shorts have right now

Chart above is still valid

As usual we are just watching for breaks of support and resistance

Good luck!
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If price breaks down further then looking at the next support

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Specific Target

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Ok should head higher from here..

Lets see...

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As expected..lets see if we can grow some legs and begin moving

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Patience...you have been waiting since Jan 2021...do what it takes to be rewarded for it...

Price should move fairly quickly thru the yellow box..we just need to break that level

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Ok get ready...

Expecting some good movement (until they halt it) from here on out

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Progressing nicely

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Still looking much higher but thinking the 44 level will be our next resistance area

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Levels should hold up here..

Still targeting the 44 level next

Lets see!

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Nothings changed with above

With the broader market teetering (lets see how many get burned by this blowoff move up smh) we should see some major volatility throughout the end of the week as Shorts juggle GME and whatever happens in the market..

Exciting times!
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Morning!

Lets see where we open today.

You know the strategy- watch for breaks of highs and lows , support / resistance and volume

Patience is the key here as always
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Not seeing an indication this level wont hold

Still looking higher

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One more drop lower and then we should start the move higher

lets see

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I dont want it too but i still think we see one more low down to the support box before this takes off

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Our patience will be soon rewarded

little lower into the support box and we should begin a trek higher

Lets see

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Market dumping which is contributing to this move lower

But as usual just watching the support areas

Still looking higher

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Should move higher from here

IMHO the $30 calls that are expiring tomorrow is why price is at these levels

They are trying to keep the price as close to that strike price as possible lol.

The problem with stock manipulation though is that you cant out manipulate sentiment

Their only hope is hope is their tactics destroy sentiment..something tells me they are under estimating the level of sentiment within GME stock holders

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Ok this is what we were waiting for...

Now lets see if we can get some follow through

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Once we get over 31.22 things should start moving again

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The market falling is weighing GME down...

Notice the white trend line...price should head towards it

Lets see

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Like we said..market dumping is weighing

Lets see if we can hold the support below

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Here is the reality:

This is 100% being manipulated to stay below the $30 Calls that are expiring tomorrow

Trades are being diverted off exchange to relieve buying pressure.

If you look at volume with a Volume Delta indicator there are an excessive amount of candles on lower time frames that show NO BUY VOLUME..do you really believe that on stock with this type of volume?

Nothing about this price structure says that this move up is done

The reason we keep saying that we are looking higher is because the structure AND VOLUME tells us to look higher

That blatant manipulation has a cap on price pressure up now...but it wont and cant last..WHY- because you cant out manipulate sentiment!

You can only hope your manipulation kills sentiment...and they cant

Now as you see we have Wave targets on the chart.

And before you roll your eyes at Elliott Wave, do understand that it is EXACTLY what we are using to call these targets

We are calling it now:

Price will reach Wave 5 by Thursday..maybe Friday depending on the structure tomorrow

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Ok this sucks but looking at the options chain $20 Calls are going to be a major problem for Shorts as well...

Pretty sure there will try to push it down to that level.

What sucks is the $20 level is technically where price structure is pointing us

That would put us making it to wave 5 between Wed and Thursday..NO PROMISES because this is so manipulated but from a big picture Elliott Wave perspective this price structure is typical

Typical in the sense that price is adhering to Elliott Wave guidelines and bouncing between the levels and targets that we expect

This is why keep saying they CANT OUT MANIPULATE SENTIMENT

Shorts can ONLY win if they destroy the sentiment around the stock..

STAY PATIENT AND STAY POSITIVE
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Morning!

Chart above is the guide for the near term

Lets see what happens
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Ok price moved down into the target area as expected

Price has held the $20 area as expected

Should see some movement up now

Lets see...

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Heck of a week!

As you see price is headed towards the target

Wont bore you with near term Wave counts and all that stuff...lets all focus on targets.

Next week and every week leading up to Earnings should be volatile..

This week was your training (or maybe your refresher if you were present for the first squeeze)...youre gonna need it

Buckle Up..about to be a wild ride


OK here is what I think most want to know...how high can we go...this is how we see it

Wave Theory hasnt let us down yet on this so whether you think this is nonsense or not its working for us..

Doesnt mean it will happen but the count and chart tell us its possible.... AS LONG AS WE DO OUR PART TO KEEP SENTIMENT POSITIVE

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Look Up!

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Still looking higher aka price should hold and continue higher

PATIENCE!

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Patience starting to be rewarded

The rest of this week should be fun..

Looking MUCH HIGHER

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Word(s) of the day: Patience and Up

Watching the $30-$35 area as there is a lot of resistance at that level.

Thinking we head there and then consolidate before moving higher

Lets see
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Forgot to show that price ended directly in the target box that we identified last Fri..

Thats a good thing...shows price is tracking to expectation

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Good buying opportunity coming up

if break 21 then we will head down a little lower and should bottom around 20

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Updated target

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Still looking higher but cautiously watching for another low until we clear 22

lets see...

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Provided we get over 22 we should then fairly swiftly fill the gap

Lets see!

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Bad movie by the Shorts...LOOK UP

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And...cut!

Another day in the books...all in all..moving as expected

Once the market digests the Nvidia earnings GME should get moving..

Oh and as we said- bad move by the shorts lol

Their algos, although aggressive, always short price down at the wrong moments smh lol...nothing they are doing is breaking the price structure we are tracking..

Silly rabbits..tsk tsk

Ok lets do this again in the morning..see you in the A.M.

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Morning!

Looking higher today while keeping an eye on price holding key support levels.

We should be on our way to the 27 area

Lets see!

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As always bad timing by the shorts...LOOK UP

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And the casino is closed (for most)..

We are tracking this pullback that weve been in for the last week or so as a Triangle..

What does that mean? PRICE IS ABOUT TO EXPLODE...and SHORTS ARE ABOUT TO GET BURNED

Why do we say that?

Triangles ONLY appear in B waves (in an A-B-C corrective move) or Wave 4.

Triangles also are the final move in the wave in which they appear and precede the final move of the Wave of one larger degree..

www.elliottwave.com/...aveopedia/triangles/

Well we are tracking this huge pullback weve seen off the recent highs as a Wave 4 which means this move towards Wave 5 will be dramatic

Price tends to be very explosive after a triangle completes so with GME and the options activity weve seen the last couple of days we are expecting some EXPLOSIVE price movement over the next week

Lets see

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