Long squeeze

Below was the note I sent to my chat groups about the GME saga:

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Right now we're seeing an epic short squeeze ongoing. But very soon that may start any moment, we'll see an equally epic "long squeeze" to start, which will be just as brutal. How can it be? Here is the theory behind it (I copied it from someone else' writing).

"Think about a crowded theatre. At the moment, everyone is going into the theatre (buying), and no one is selling. However, when they begin to try and sell their positions, no one will be there to buy from them.

Such is the equivalent of yelling "fire." The smart ones will get out early. The rest will find themselves scrambling towards a very narrow exit. Once the price starts falling, the sellers will swamp the buyers driving the price lower. In Gamestops case, given the company's value is around $10, where it was trading before the mania, the decline will be both brutal and fast."

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I don't know if the "long squeeze" has already started but the past two days of harsh selloff indeed smells like it. See the waterfall of GME after the haircut of the past two days:

I genuinely hope no Reddit kids will get hurt by this long squeeze but it may be just wishful thinking. Likely there will be many who will badly hurt by the emotional FOMO, which in general will never end well. At least I wholeheartedly wish there will be no tragedy at the end but just a lesson learned from the frenzy high chasers! 

For anyone who has unfortunately got in at its peak area or his/her family members who did so, here is my advice:

Purely from the TA perspective, there is a chance (no guarantee) that GME may try to mount another attempt of rally in the next day or two but if this happens, it will probably won't go above its major overhead resistance around $150ish. So taking any rebound as a luck to unload your long position to cut your loss. Seriously, don't try to hold it up wishing some magic will happen to save you. More than likely, those holding it up will get killed with the fund wiped out mostly if not all!   😢

PS:

I have registered as 深山老林 at SafeChat (SC) (You need to download the SafeChat app first) and have set up a new SC chat group. I'm gradually shifting our major social media interactions to SC instead of WC. If you'd like to join my group, sign up a free SC account easily and search for me and connect me as friends.  For friends sharing  similar conservatism views, let's come together to form a better chatting group that won't be constantly disturbed and harassed by the insane radical censorship!