GME is about to fuk u with its negative beta.

Greetings to the most intelligent people on the planet!

I've been playing with GME and the other charts recently, and it all accumulated into a massive piece of delicious TA, which I didn't really plan to post to WSB originally - because I felt like some of the honorable WSB residents might be a little tired from that particular stonk. However, after seening [this](https://www.reddit.com/r/wallstreetbets/comments/pppfro/tmc_spotted_the_cock_and_balls_upside_down_head/) and [this](https://www.reddit.com/r/wallstreetbets/comments/pph9f0/as_you_can_see_tmc_is_forming_a_classic_nut_sack/) beautiful examples of intellectual superiority, I just couldn't resist sharing my hard work with you, dear WSB!(If you, dear reader, are the one who is fed up with GME, then I would recommend you stop reading now and follow the two links above to appreciate HQ TA on other stonks).

For those, who stayed - enjoy the read!

It all started from my “L'Oreal shampoo commercial”-like hair bet post, where, in its third chapter, I was theorizing about GME's negative beta (particularly in light of the late January events, when the buy button was disabled) and the current general market setup - how it might influence subsequent GME moves. So, I decided to dive deeper into those correlations and deviations between the price movements of GME and other major assets, using January sneeze as the starting point. This led me to a fascinating, tits-jacking discovery that points at the upcoming inevitable volatile price action!

Buckle up for the TA journey of your life, let’s ~~dive~~ fly in!

Oh, almost forgot to quote Jack Black:

>“This is not the financial advice, no. > >This is just a tribute. > >Couldn't remember becoming a financial advisor, no. > >This is a tribute, oh, to the greatest stonk in the world, alright!”

​

First things first, it’s a good idea therefore to revisit **late Jan events**, which in my opinion was the moment of revelation and a preview of inevitable storm, when:

​

# I. The North Remembers:

​

​


* GME shares added more than 500% in less than two days, showing off its negative beta in all glory, * making VIX volatility index explode more than 60% in a single day, * and injuring SP badly (sharp decline of about 4% in 21 hours).

​

At this point, the thesis should sound something like GME🆙VIX🆙=SP🆘, and vice versa. It will be developed further in the next chapters.

​

Also, quoting my bet post here:

​

>Pepperidge apes should remember that during one of the Gamestop congressional hearings Vlad 'the Stock Implaler' Tenev mentioned something about late January events falling into five-sigma category, which scientifically speaking corresponds to a p-value, or probability, of 3x10-7, or about 1 in 3.5 million. He also used such a hackneyed expression as a 'black swan' event. > >... > >Categorizing January craze as five sigma is debatable to say the least, because Gamestop shares started to skyrocket and multiply in price long before late January, and it doesn't take a lot of wrinkles to understand that the volatility should likely increase further, requiring additional collateral and somewhat decent risk management. However, I'm not going to discuss Vlad's choice of sacrificing Robbinhood users (disabling buy button) in order to protect the solvency of Robbinhood customers (Citadel and co), because that has been done enough times already, and the North remembers. Rather, Robbinhood example and Vlad's interpretation are provided here as a vivid illustration of the fact which we all feel deep inside: there is just too much risk in the market, it is being too much fucking over-leveraged so that even a fucking retail stock broker may easily get margin-called in a matter of hours. It is especially hilarious, considering the fact that unsophisticated actions of buying and holding a particular stock is enough to fuck the system, making the entire house of cards fall apart. The problem is that when you dive deeper, 2008 seem to be a blessing.

​

Furthermore, I should recommend you reading u/peruvian_bull Endgame series, and/or u/Criand the Bigger Short in order to develop the understanding of the fundamental processes taking place under the hood of the financial markets. To sum up the core idea: the financial system is over-levereged, way more than it was in 2008, and coupled with the industry poor risk assessment standards, it is heading to the next, coming soon, financial crisis. And, in my opinion, what you can see on the charts above, was a sneak peak of the house of cards collapsing. Disabling the buy button was the only option for the big moni guys to stop (or rather to postpone) the system failing miserably. By bringing this dirty trick into play they were able to ~~buy~~ steal some time, which was necessary for deploying emergency measures and urgent market mechanisms (such as new DTCC/NSCC rules) - which, in turn, are aimed at mitigating the inevitable financial hail**shit**storm, ready to hit the fans.

There is a plenty of outstanding fundamentals DD on that topic (start from clicking profiles in the paragraph above). As for me, I am the TA type of a wrincle-brained ape, so...

Let me speak from my ~~heart~~ charts.

​

# II. Negative beta more beautiful than Catherine Zeta

​

Let's start from something that you must have heard about many times, but did you really dive into GME exceptional beta? So, what's that thing and why is it so negative? For the sake of saving my and your time, let me quote the almighty Inve**stop**edia:

​

>In investing, beta does not refer to fraternities, product testing, or old videocassettes. Beta is a measurement of market risk or volatility. That is, it indicates how much the price of a stock tends to fluctuate up and down compared to other stocks. > >The value of any stock index, such as the Standard & Poor's 500 Index, moves up and down constantly. At the end of the trading day, we conclude that "the markets" were up or down. An investor considering buying a particular stock may want to know whether that stock moves up and down just as sharply as stocks in general. It may be inclined to hold its value on a bad day or get stuck in a rut when most stocks are rising; whereas the beta is the number that measures a stock's volatility, the degree to which its price fluctuates in relation to the overall stock market. In other words, it gives a sense of the stock's risk compared to that of the greater market's. > >Beta is used also to compare a stock's market risk to that of other stocks. Analysts use the Greek letter 'ß' to represent beta.Beta is calculated using regression analysis. A beta of 1 indicates that the security's price tends to move with the market. A beta greater than 1 indicates that the security's price tends to be more volatile than the market. A beta of less than 1 means it tends to be less volatile than the market. > >**Negative beta**: A beta less than 0, which would indicate an inverse relation to the market, is possible but highly unlikely.

Essentially, negative beta asset is an asset that tends to move in the opposite direction from the general market. Famous precious metal is one of the good examples: gold and gold stocks have negative betas because they tend to do better when the stock market declines. That is exactly the reason why investors cherish this asset in the turbulent time of recessions, market crashes and corrections, or general uncertainty and volatility - historically gold tends to perform well during such periods, providing the 'safe heaven' to market participants and acting as a hedge. Noice, but this turbulent time we have something special on the horizon.

\*\*Le wild negative beta unicorn appears\*\*


Many of you must have seen -ß posts, but math and numbers are for geniuses, retards only understand crayons and visuals, so...

Ladies and gentleapes, with the great pleasure I present you the new negative beta king:


What you see on the chart above is a vivid illustration of GME's negative beta behavior, which commenced during/after the January sneeze. As for SP, the stable uptrend with the minor corrections is evident, while the asset is achieving ATHs on a regular basis. Looking at the GME now and connecting its highs with the median line, we may observe the opposite trend, as the line is descending. All in all, there is a big-ass convergence manifesting between the two assets, which most probably will result in the increased volatility and the explosive GME breakout / trend reversal for SP. Who will blink first?

​


Next, take a look at this chart. Don't worry about GME's Pisa offset here, as it is insignificant for the point I'm making (and I had some struggles overlaying the charts in this case). If the previous chart indicates a longer term negative correlation, the one above is like a zoom in: there is an obvious series of divergences and convergences highlighted yellow and blue respectively, which illustrate negative beta again, but on a smaller scale and with local trends. As you can see, as soon a GME bullrun commences and accelerates, SP dips, and vice versa. I hope, that the examples provided are persuasive, and that they helped you to reach the same conclusion as I did, namely: sstonk goes up when stonks go down, while when stonks go up, GME is suppressed = GME🆙SP🆘. Should that correlation continue manifesting itself (which I'm pretty damn confident it will), the exciting times are on the way.

Ok, so 🆙🆘 is a simple concept, but why is it important, you may ask.

Well, that's why:


SP has been forming a powerful bearish technical formation called the rising wedge, through the past year and a half. Currently it is narrowing down, and the point of breakout is not far away - typically it is to the downside for such a technical setup. Add GME with its negative beta to this equation - if you know, you know.


But wait, there’s more!


In one of my TA longwrites, the Big Short 2.0, I identified a beautiful, long term, juicy Elliott 1-2-3-4-5 impulse wave structure on SP, take a look! The investors are currently riding the top of the fifth wave, which is usually the most fun, euphoric and crazily risky. Everything in the nature works in cycles, and all the things that go up, must go down eventually! Considering the current bullrun being one of the (if not THE) most powerful and longest bullruns in history, you can imagine how nasty the retrace may look this time. Especially, when you take into account the fact that current financial markets are filled with shitty synthetic derivatives, excessive leverage of a bad quality, unthinkable level of risk, and... plain fucking crime. The financial world is craving for the correction (like Sahara for rainfall) and a proper bear market, as the deleveraging will make it healthier, and maybe, just maybe, it will bring price discovery back to life from the grave where it has been rolling for I don’t know how long.

Man, I wish there was a safe heaven asset that would protect me from the upcoming financial typhoon, the price of which would move the opposite way from the overdue nasty correction on all financial markets, which have been enjoying the most powerful bullrun in history for more than ten fucking years... Oh, wait!