| Author | Source |
|---|---|
| u/head4headsup |
GME Micro (5 minute Candles) - 5/28 EOD; Primary (i) completes (local top), Primary (ii) begins retrace with bottom calculated
Obligatory Intro…
This is an analysis of GME stock price movements using Elliott Wave Theory. To learn the basics of Elliott Wave (EW, please visit) r/ElliottWaveTrading. I also recommend the book Elliott Wave Principle by Frost & Prechter (link in that sub. While Elliott Wave is great at predicting price targets in the most probable coming scenarios, it does not make timing projections. Wave development can occur over long periods of time or in just a few candles of the chart (as witnessed in JAN and MAR for GME. EW can be useful for the investor in many ways, especially if seeking to buy, and looking for the next most probable dip (discount) in the share price; it can provide clarity in moments of chaos to aid the observer in understanding likely next moves within a trend or countertrend, avoiding blindness/guessing (among many other uses). It may build stoicism and be easier to avoid paper hands if the dip you encounter was expected. Knowing something may be coming, and what it may look like, is often less distracting that being blindsided.))
REMEMBER THIS… I AM NOT SAYING SELL, I AM NOT SAYING BUY. I AM NOT SAYING DAY-TRADE THIS. I am simply offering my opinion of market movements of GME. Go back up there ^ and read the Obligatory Intro. Please. Then come back down here.
Reading My Charts:
There are a few differing sources for the correct way to label the degree of waves. Some require circles, some double parenthesis. I have settled on this for my waves, and it will be handy to reference this if my charts are to make any sense.
Supercycle (Major): (I) - (V) may take months or years to complete.
Wave (I) took nearly 20 years. Wave (II) may have only taken a month.
Cycle: I-V may take weeks or months to complete
Primary: (i)-(v) take days or weeks to complete
Minor: (1)-(5) may take hours or days to complete
Minuette: i-v may take hours to complete
Micro: 1-5 may take minutes to hours to complete
Miniscule: ((i))-((v)) may take minutes to hours to complete
Weekend Update - Big Picture (aka How Did We Get Here)
EDIT: 10:24pm 5/28 - See "UPDATE" below in A Tribe Called Quest... possible upside before heading back down in C of (ii).
EDIT: Thank you for the gold kind stranger.
Primary Wave (i) appears to be in the books. It started three weeks ago when Cycle Wave II finally completed (as I thought it had a few times before... but continued wave violations and breaks of support forced me to revisit whether that long consolidation was over).
The only way to confirm a corrective wave like Cycle Wave II has finished is for a.) a new impulse to begin with a five-wave move up (wave 1); AND b.) for a retrace (wave 2) of that impulse that does not violate the beginning of wave 1 in that impulse; AND c.) a continuation in that impulse in the third wave preferred for confirmation, that exceeds the height of wave 1.
I actually thought the early May bump and drop was Minor waves (1) and (2) of Primary wave (i). But wave (2) just went too far down. Not enough to invalidate, but just too low for me to believe this was actually a (1)-(2) setup in an impulse subwave of Cycle III. Something was off. The ensuing impulse of Wave (3) began with a Minuette wave i that extended way too far up for it to be a i of (3). Possible, since third waves are known for their dramatics and flair... but still... something looked off. Wave i of (3) usually targets the .382 of the larger degree (1)-(2) just set. This wave i blew way past the .382, the .500, the .618, all the way to the .764. No way. Was it possible that the (1)-(2) of early May was just more fricken consolidation of the Cycle Wave II? Ugg... yuck.
BUT WAIT! THAT WOULD BE AWESOME!!!
[](https://preview.redd.it/hl1bsnipx5271.jpg?width=1532&format=pjpg&auto=webp&s=3c47a5fe31216fb007274489fe8eed44a0f8134b)
I see what you did there! GME Leading Diagonal in Cycle Wave III reset Mid-May
So I revisited the major waves. Once I considered that new impulse off the $136 low was actually a new start to Primary (i) to lead off Cycle III, then I had something. After a major wave like Cycle II, the expectation that (i) would reach the .382 up near $250 was great, but those early minor subwaves have no larger degree waves to draw targets from... they are simply subwaves of Primary (i) that will set their own Fibonacci targets as they develop. How Delicious!!
So here I am with this new impulse to tease me (finally after seemingly ENDLESS consolidation).
If so, Cycle III would need to subdivide in five Primary waves: (i)-(v), each likely taking weeks;
- which would each need to subdivide in five Minor waves (1)-(5), each likely taking hour or days;
- which would each need to subdivide in five Minuette waves i-v, each taking hours;
- each subdividing in five Micro waves 1-5, each taking minutes to hours.
But, that first impulse in Minor Wave (1) of Primary wave (i) was overlapping, so I was a tad bit wary... these overlapping waves are usually a continuation of corrective action (which is enough to make me vomit since so many overlaps had trashed my charts of hopeful impulses all of April... corrective waves are wicked, exotic, erratic... just a plain pain. They quickly dash hopes of the beloved impulse time and time again. Yes. April was just as painful for me as an Elliottician as it was for all of us GME holders.) But this was a full five waves, despite overlapping... I really needed a wave 2 retrace to confirm the impulse, which would let me at least consider the overlapping waves i-v of wave (1) of (i) as a Leading Diagonal (or LD; those can only appear in First Waves).
*A String of Pearls (EW Successes - Fib targets hit proximity or surpassed) -*
Once that Micro Wave (1) and (2) were in place, it looked like (3) was underway with a i-ii in place on Monday 5/24. My targets for more upside once iii was underway were:
> Wave 3 of iii of (3) - $212.73 at the 1.236 fibs. It reached this and struck Phi (The Golden Ratio) at the 1.618, clearing it by 4 cents landing at $217.07. This also found confluence of the 1.0 larger degree i common for a "3-of-3", clearing by 25 cents.
>
> Wave 4 of iii retrace targeted the 1.0 at $205.71. It came up shallow, but in a sufficient range and wave count at $206.25, within 54 cents
>
> Wave iii targeted at least $213.11, reached that and extended to $217.11
>
> Wave (3) would normally target the 1.382 fib, reached that and surpassed, nearly reaching Phi/1.618 at $249.37, settling just short at $248.4 before turning down in Wave (4)
>
> Wave (4) retrace - $226.29 target; $227.08 actual (within 79 cents).
>
> Wave iv of (5) - $250.15 target; actual $251.23 (within $1.08)
>
> Wave (5)/(i) - v of (5) targeted $270.10 at the 1.618; (5) targeted - $269.47 at the 2.0; (i) targeted the $254.63 at the .382 (surpassed in the subwaves) ~~~ Actual: $268.00 (within $2.10 of Minuette wave target; $1.47 of Minor wave target; surpassed Cycle wave target by $13.37.... this is why I stated earlier that Larger degree wave targets are overridden by the more accurate subwave targets as they develop).~~~
Thursday night, I noted in my post that Primary wave (i) was about to complete, and immediately following that would be a turn in price, a retrace in a wave (ii) pullback equal to .5 to .618 fibs of the entire size of wave (i), targeting $187.59-$203.35, developing in a three-wave structure labeled ABC, where A and C are down, B is up between them. This was not well received, but it is strict Elliott Wave adherence nonetheless.
FRIDAY! -
*"All ya had to do was give Humpty a chance, and now I'm gonna do my dance." ~ Digital Underground*
Yes, I consider Friday another EW success, as I saw the rise needed to complete wave 5/v/(5)/(i), and IMMEDIATELY saw a sharp reversal. This is what I believed my Elliott Wave count told us was coming, (and yes I was literally called a shill for having the audacity to post my analysis. I guess they never read my other myriad posts and just assumed this was a one-off FUD attempt. <Sigh>).
Wave (ii) started out as a gentle a-b dip/bounce and was followed by a dramatic c wave down to *potentially* complete A, which found support where wave 2 of iii of (5) of the previous impulse sits. Wave B retraced a very modest .382 before heading down in wave C, which typically develops as a five-wave move and has a few different EW targets for me to consider. C put in waves i and ii. With Wave A and B *potentially* in place I can now calculate more accurate targets for where I believe Wave (ii) will bottom. <crosses fingers>
Wave C/(ii) Targets - A Tribe Called Quest -
Corrective wave can be tricky, but we have a few guideposts to serve us in finding the target for Wave (ii)... IF A and B are already in:
- Deep - As a retrace of (i) (remember, this often a mere confluence guide, and how ABC develops is a more accurate calculation)
- Wave (ii) targets a standard .618 to shallow .500 retrace of (i): $186.79 to $202.30
- This finds confluence with Wave 5 of C targeting the 1.764 to 1.618 extension of Wave 1 from 2 between $193.52 and $198.04 respectively. I think this is the most probable target range.
- Shallow - Wave C of (ii) can often be equal to the size of A, and projected down from the top of B. If C=A, then (ii) targets $217.20
Seeing this Primary Wave (ii) develop so fast after wave (i) took three weeks makes me wonder if there are more 'consolidation shenanigans' coming. Keep in the back of your mind that this symbol has an uncanny fetish for lingering corrective action. I see a wave 4 of iii and a wave iv of C coming up. Hopefully they resolve soon, along with the rest of Wave (ii) so we can see the unicorn in the clearing ahead...
UPDATE: 10:21pm 5/31 - It is possible that A was not done yet. With only three waves down in C so far, it is possible that this is a deeper A being set. If so, hand having traveled $46 down already since the Friday top, then a retrace in B from here could take price back up to $252ish before heading down in C. If so, that will require recalculations for the projected bottom of (ii).
After that? - UPSIDE... yes, as noted above, once Wave (ii) completes, we finally get the dramatic, fabled, oft revered "3rd of a 3rd"... in this case Primary Wave (iii) of Cycle Wave III. Here is a taste of where I think we are and where we are headed.
[](https://preview.redd.it/d99gn17dy5271.jpg?width=716&format=pjpg&auto=webp&s=ca668310aeaa79b3a9f02733cce88d519de8f845)
GME Hourly Candles with Upside Targets (unconfirmed until Primary (ii) completes
Recall that when upcoming waves are projected from the larger degree 1-2, they are guideposts of what to expect, but the more accurate projections come from the calculations of the subwaves as they develop in that wave degree. Once wave (ii) completes, and we have confirmation with a new impulse in wave (1) of (iii), then I can more accurately calculate projections of where (iii) [and then naturally (iv) and (iv) also depending on their subwaves] will complete. Remember - targets may extend if prior subwaves develop with extensions.
[](https://preview.redd.it/icough4jy5271.png?width=1382&format=png&auto=webp&s=591c82d50780cb6eec9ffb044478f78bd6527bcc)
Elliott Wave Standard Impulse structure
This is again just one theory of technical analysis (and the most accurate I've seen). It is prudent to expect this to play out, even if we all hope for this to get thrown out the window once we moon and circuit breakers start trippin' etc. Until moon, I am left with leveraging my understanding of human psychology en masse and how it is reflected in price in the markets. Expect it... plan on it... Elliott Wave said it may be possible.... Diamond Hands are earned, not given!
I am so excited for this. Of course if the circuit breakers trip and I get a MOASS instead, I'm sure I'll be just fine.
~~~~ end of update ~~~~~~
Really Big Picture: How Did We Get Here?
- I believe Major Waves (I) and (II) are in place (January High and February Low, respectively)
- I believe we are in major wave (III), with Major waves I and II in place (March high and April low, respectively)
- I believe we are in wave III, with wave (ii) underway
- I believe we are in wave C of (ii). C completes (ii)
Longer Term Targets Still Intact (not invalidated) -
- (iii) of III UPDATED - at the 1.000 extension of I from II = $445.59; $422.36-$453.37 as 1.746-2.0 of (ii)
- III of (III) - at the 1.000 extension of (I) from (II) = $520.12
- (III) - at the 1.764 extension of same degree waves (I) from (II) = $850.23
- All of these subject to recalculation as subwaves develop. Subwave target calculations override projections from fibs of larger waves completed, but finding confluence at those fibs is great confirmation.
*I realize the MOASS could just blow these labels up and force me to use the double parenthesis-bold-capital Roman numeral* *((I))* *etc for a degree beyond the current (I)-(V). I hope we get that chance. It will be glorious to bust out that gigantic crayon. Word. What is very likely is that once artificial means are employed to satisfy a short squeeze (e.g. circuit breakers; DTCC forced purchases to resolve a defaulting member) then EW targets cease to be effective, and will come back into play once selling of shares occurs on the backside of the squeeze.*
**Housekeeping Reminder -** Label placements should not be inferred as 'timing' projections. EW does not espouse 'when', just likely 'where' price targets are hit before turning back up or down. Labels are placed on the chart for general ease of visualizing how the wave may develop at price points. There are some great analysts that post Bayesian Timing targets, but I have not seen any doing so for GME yet.
~~~~~
TL;DR - Primary Wave (i) complete as projected, with immediate reversal in Primary Wave (ii), as projected. Wave (ii) should retrace to the .618 distance of covered from $136 to $250. Wave (ii) target between $187-$203... waves A and B already in and wave C underway. Just a little more corrective/consolidation so we can see the monster Wave (iii) of III. This is Elliott Wave... impulse wave need these retraces to coil up sentiment for the big spring up.
~~~~ end TL;DR ~~~~
In Ape - The bananas up there were delicious, but just an appetizer for where going next. A swing lower to rest above a recent strong branch before really vaulting up into much higher branches.
H4HU - EWApe/HODLer/💎👐🏼/I Like The Stock! I am long GME. I have never sold short.
To learn the basics of Elliott Wave, please visit r/ElliottWaveTrading.
PLEASE NOTE:
This is not financial advice, I am not a registered broker and this is for entertainment purposes only.
Past performance does not equal future returns, and all equity investments entail risk.
The views expressed are the views of the author, and opinions expressed in the text belong solely to the author.
The views expressed are solely the author’s approach to investing in this specific equity.