| Author | Source |
|---|---|
| u/BeanDaddyMac |
First thing’s fist: I don’t know what the hell I’m doing. I’m just an ape throwing my own feces at the wall and calling it DD. I’m not saying that to be cheeky, I’m saying that because I’m probably wrong about a lot in this post and would appreciate being corrected. I ain’t no goddamn financial advisor. Ain’t no goddamn financial advice. I just think the goddamn stock is nice.
Second of all, I am not trying to predict a date. However, as many other fine simians before me have already elucidated, it’s very likely that GME will rise and falls several times leading up to the MOAS like so many ominous rumbling farts preceding an epic shart. Just as it is with a sloppy wet one, there are usually preceding clues that make you mentally take stock of your supply of clean underwear (I don’t know why there’s already so many shit analogies in this post, I really don’t). One of the most commonly used metrics used to predict a bearish or bullish turn is the MACD.
A different kind of soft serve
It stands for Moving Average Convergence Divergence (there’s a tongue twister for ya). The MACD is calculated using the difference between two exponential moving averages of a stock, usually over 26 days and 12 days. The MACD can be be either positive (more bullish) or negative (more bearish) but is most often tracked against the 9 day exponential moving average (EMA9) of the MACD itself in order to predict bullish or bearish sentiment. If it moves above its EMA9, it signals upward momentum and a recent or pending reversal. This is also known as the sought after golden cross. Day traders, of which GME has none glares for dramatic effect, use the MACD on the 15min, 30min, and 1hr charts to try and predict swings. To better prepare for impending sharp bounces or falls in our favorite stonk, I looked at macro trends in the 4hr and 1 day MACD preceding known squeezes. There are a few trends I’ve noticed.
The MACD will often already be above the EMA9 leading up to a bounce. This makes sense because it’s measuring growing momentum. However, this isn’t always the case.
The MACD in volatile stocks will often dip below the EMA9 after the stock has already dropped following a bounce.
The 4hr charts usually show a golden cross before a sudden uptick
The 1 day chart’s golden cross usually lags a little behind but is a better indicator of steady momentum and sentiment vs. volatile swings
Let’s take a look at these crosses in action using some established examples. First, we got PLTR. Palantir only recently went public in late 2020 and started out strong. On the 1 day chart, you can see the MACD sliding under the EMA9 for the first time on 12/11/20 followed by an extended period of trading mostly sideways.
PLTR 1 Day Chart
Over a month later, it crossed positive again on 01/21/21 just as the gamma squeeze started. However, you can see the trend lines slowly coalescing just before that point, hinting at an impending upswing in momentum.
PLTR 1 Day Chart
The golden cross appears much earlier on the 4hr chart.
PLTR 4HR Chart
The negative MACD crossing during its double peak only happened after it fell on both drops.
PLTR 1 Day Chart
PLTR 1 Day Chart
Another well known recent event is SNDL’s squeeze. On the 1 day chart, you can see the golden cross occur just as the stock starts its meteoric climb. Unfortunately, its crash came abruptly and the negative crossing only happened after its descent. The gap between the MACD and EMA9 oscillated but most important to note is how narrow their gap was in the days preceding the upswing. And again, the golden cross comes about a day earlier on the 4hr chart compared to the 1 day and the negative crossing occurs after the drop.
SNDL 1 Day Chart
SNDL 4HR Chart
Finally, let’s look at the golden boy himself, TSLA. This is a great one to use because the squeeze lasted for so long and consisted of several mini squeezes leading up to its eventual peak. The MACD and EMA9 oscillated back and forth very tightly up until 12/13/19 when it crossed over days before a massive upswing. The cross appeared earlier on the 4hr chart on 12/09/19. The stock then crashed but interestingly not before the negative cross reared its head to signal downward momentum.
TSLA 1 Day Chart
TSLA 4HR Chart (this was tough to find for some reason)
You can see this pattern repeat again and again
The 4HR chart caught the next upswing in August earlier by 2 days. The most recent spike with a golden cross was caught at the start on both 1 day and 4hr charts on 11/17/20
So…wtf does this have to GME? Well rev up dem tits, boys, we’re goin tendie huntin!
The squeeze that could have been had its golden cross MUCH sooner than the peak but did happen to occur on the 1 day chart right in the middle of a bump on 01/13/21. The crossover occurred a day earlier on the 4hr chart.
GME 1 Day Chart
GME 4HR Chart
The Second Coming coincided with another cross but well after it began on the 1 day chart on 02/25/21. What about the 4hr? It shows up four trading days earlier on 02/19/21
GME 1 Day Chart
GME 4HR Chart
And that brings us to today. On the 1 day chart, the MACD is still underwater with a spread of -5.09. You can see the channel narrowing. For comparison, the spread on the 1 day chart was -3.58 on 02/24/19 the day before it crossed.
GME 1 Day Chart
What about the 4hr chart, you ask? We already crossed over. FIVE TRADING DAYS AGO
GME 4HR Chart
The MACD and EMA9 are currently oscillating. We slipped back under the EMA9 on the 4hr chart yesterday but only just barely. The spread is -0.09 so it may as well be zero. Look at the narrowing of the two trend lines. See how they come together and have been twisting back and forth since 03/30? That’s a fuse being spun together. Are you ass cheeks clenched yet? Well clench harder. Let’s look at MACD and EMA9 spread for the 1 day chart starting from 01/13/21.
As you can see, the spread has remained negative for 11 days in a row. The previous spread remained negative for 13 days in a row before the stock jumped from $44 to close at $91 the following day. The stock had also just hit a 28 day low volume of 7.57 million the day before it jumped. The previous low occurred on 01/12 with a volume of 7.06 million the day before the MACD-EMA9 spread turned positive on the day chart. Yesterday’s volume was 6.08 million, a 29 day low.
TL;DR
Fuse lit. Wait for boom boom. Buy. Hodl. Clench dem cheeks. 🚀 🚀 🚀
edit: typoss