GME Analysis for January 29, 2021

2:40 p.m. New York time

What’s happening now? GME continues to conform to Elliott wave analysis, having completed two waves of what will prove to be a three-wave pattern if the decline is a correction within a larger uptrend, or a five-wave pattern if the decline is the beginning of a downtrend.

What does it mean? The price began its 3rd wave down early in the trading session. If the decline is a correction, then the wave is wave C. Once it’s complete, then the next move should be up to new highs. If the decline is a new downtrend, then the wave is wave 3. One it is complete, then the path down will be a long one, and the price might never again see its January 28 peak.

[GME at 2:38 a.m., 10-minute bars]

Learning and other resources. Elliott Wave International has long been the leading analytical house based on Elliott wave theory. They make available a number of free educational materials and other resources, in addition to their for-pay subscriptions.

I recommend two books, both by people associated with EWI.

First, Elliott Wave Principle by Robert Prechter and A.J. Frost is the book that, along with Prechter’s analyses, that created the revival of Elliott wave theory. I first read it in 1984, and it has had a profound influenced on my thinking about markets ever since.

Second, I’ve found Visual Guide to Elliott Wave Trading by Wayne Gorman and Jeffrey Kennedy, both of EWI, to be a useful book that relates Elliott wave theory to practical trading. The authors are hands-on Elliotticians, and for an active trader, that’s exactly what’s needed — less theory and more how-to. The first chapter of the book gives a very nice thumbnail run down of what Elliott wave theory is all about.

Terminology. Here are some links to information about some of the technical jargon I use.

By Tim Bovee, Portland, Oregon, January 29, 2021


Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.

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