$GME DMI ADX; WHATS IT MEAN?! — Jackie Le' Tits — Video Wiki
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Full transcript (5,562 words) — every glorious word
0:01so on the bottom of the screen all right I've turned off the dmis of the adx DMI indicator and just for right now we're going to focus on just the section that is called or referred to as the adx okay now the adx part of this indicator okay this one singular line that you see going up and down and shifting colors okay this particular indicator that I've created shifts colors when it go goes above or below certain levels okay when it goes above 25 on the indicator the line shifts to a uh uh a nice deep shade of blue when it breaks below 25 but stays above 20 it turns this nice shade of orange and when it breaks below 20 it turns this really nice uh bright kind of Whitey blue shade okay now what you need to know about all of that and how that functions okay is on the DMI adx indicator all right this is a0 to 100 indicator okay it can go above 100 and uh there are I don't think I've ever seen a time in history where it goes below zero so this is essentially just a 0 to 100 indicator okay the same way that the RSI is all right and with this 0 to 100 indicator each one of these numbers represents basically uh I'll say kind of like a layer that you are looking to achieve all right and so when you see the adx all right you can see when it shifts to this nice uh white blue colored shade here right that's when the adx goes below 20 when this particular indicator goes below 20 what it is trying to tell you is that there is zero strength of trend okay that's what this indicator measures is the strength of the trend or the strength of the trending move that is currently in progress okay so when we see this indicator dip below 20 it tells us two things number one there's zero strength of trend that is currently taking place and number two and one of the most important parts that you guys should remember okay number two is that this shows us that the volatility and the velocity of the moves currently taking place are also really low okay so now that we kind of have an understanding of the low
2:43side of the indicator okay what does it mean on the high side when the adx breaks above 25 It generally signals that there is a large strength to the trend or the trending move that is currently in progress so in these moments where you see it way up here or way up here or way up here what it is telling you is that the strength of that particular trending move taking place is really [ __ ] powerful okay so let's just say for example okay now we haven't even looked at Price action but this is what we're going to do okay we're going to look at what happened to GameStop here from the end of March 2019 until the beginning of November 2019 okay because this shows a large strength to the trending move that was taking place from here to here right so if we open this up and we look at what was happening to GameStop at that very particular point in time folks look at the strength of the downtrending move that took place from right here right to the end when it finally broke below 20 again look at the strength of this move that happened GameStop went down 70% in 140 days incredible incredible strength of trend right so that's all you really need to understand about this indicator okay and the higher and higher and higher the adx Rises the higher and higher and more volatile and more velocity will be behind that particular move of that trend in range that is currently taking place okay now I could throw in the dmis and that will make things a little bit easier to understand but we're not going to do that yet because I just want you guys to focus on this particular indicator okay just the adx for now Okay the reason that I want you to focus on just the adx is very simple okay so check this out all right check this out so if I zoom in to our current bit of price action okay so we'll go up here we'll zoom in a bit all right so here's price action right and then here's our indicator and if we zoom in on our indicator okay I want you guys to take a mental note of something all right the adx broke below 20 on
5:16August 13th of this year okay this is when the adx broke below 20 in August of this year all right now since that time we have had a couple of little moves that have occurred in the middle of this range but nothing of significance right absolutely nothing of significance has taken place now not only has nothing of significance taking place but your adx now has been buried under 20 for several weeks right if we measure from that candle to the close of of Friday that is now 52 days or 37 trading days that the adx has spent below 20 now you're going to ask me Jackie why is that important you're going to say Jackie why is that important now there have only been a handful of times okay there have only been a handful of times on gme's chart where the adx has not only spent significant amounts of time underneath 20 but it also broke this trend line that I've drawn here at approximately 14 okay on the adx on our numbers on the side there have been very few moments where the stock has both spent significant time underneath 20 and then also broken below the 14 threshold that I've marked off on this particular little uh horizontal line here okay one of which you guys will remember very vividly right one of which you guys will remember very very vividly which was our 9 weeks of Hell the last time that the adx DMI indicator spent multiple weeks underneath 20 was back on January 25th of this year and it stayed underneath until April 3rd 69 days or 47 trading days where the adx spent underneath 20 also going below that 14 threshold now once it started to break out right the size of the moves that preceded it were pretty significant and explosive 23% down in about 3 weeks but then you guys obviously know the gigantic and unbelievable move that happened afterwards right so there's example number one right where we saw the adx spend significant time underneath 20 and that significant time underneath 20 while Al also reaching that 14 threshold led to two significant explosions in price both to the downside and to the upside okay now the next time prior to that was back over here okay where the adx breaks below 20 here on uh
8:15July 5th of 2023 and it does not get back above it for another month so this one is not uh as long I'll say it's not as much time as what we're seeing now and what we saw back in the 9 weeks of hell but folks once again when that adx was doing absolutely nothing it was preceded by significant moves both down and up now they don't look like much but if you pay attention the significance of the move that happened to the downside right 40% down that was 40% down from when that adx finally broke out showing strength of trend and that strength of trend led to a 40% move down from when that stopped happening so once again another significant explosion on GameStop okay now this is where the fun is going to begin right this is where the fun is going to begin because there are only two other times that we can reference all right where the time frames align with what we are seeing right now and what we also see on the adx for how long it spends underneath also dipping below that 14 threshold okay there are only three other times that I'm going to reference for you guys and then you guys will start to kind of put two and two together here as to why I am anticipating that gme is going to make an a a massive explosion okay so the Next Period of time was back here okay September 12th 2022 this came off of the back of the horns pattern sending us down 52% and when we sent down 52% then you can see that price stabilized and in that stabilization of price it stayed underneath the 20 threshold basically every single day with the exception of about two of them right here right also dipping below that 14 threshold now folks once again when this thing finally decided to start breaking out in significant fashion I want you to pay attention to the size of the moves that were made on GameStop both to the downside right a 26% move down which was then preceded by a multi-week 61% run to the upside that is a significant move once again being proceeded by the adx spending multiple weeks underneath 20 and also reaching the threshold of going underneath 14 okay so once
11:08again we saw a 26% move down followed by a 61% move up that is significant that is volatile the last time that this happened excluding The Squeeze or excluding the sneeze sorry right the last time prior to that and which is the most exciting in my opinion is back here okay April 7th of 2021 April 7th of 2021 until May 27th of 2021 now you guys have actually seen me reference this area of price action several times before when we have been looking at GameStop and comparing the price action one of the things that we had actually been looking at was the fact that these structures right this significant ific move up the selloff that makes the U and then the secondary U shape right we looked at this and we said hey what the [ __ ] that [ __ ] looks almost the exact same where it makes the sharp move makes the bigger U sells off into the large rounding U and then that leads to this huge explosion and what's interesting is if you look at the adx and the and the DMI indicator at the same time look at what happened you broke below 20 here price stabilized it a range for several weeks and then once the adx started to break look at the size of the moves that happened on gme just from the breakout of the adx that was 57% and if you actually take it from the low of that move to the peak that was 160% move to the upside on GameStop so you guys can kind of start to understand right you guys can kind of start to understand why I am looking at the DMI and the adx indicator right now and I'm going holy [ __ ] everybody better watch out because this thing has now spent several weeks uh near nearing two months now of staying underneath 20 and well below that the 14 threshold right and every single time that that has happened pairing it with the technical analysis that we have at hand there have been ways to take advantage of really significant moves happening on GameStop right both to the downside and to the upside so we're going to look at one more we're going to look at one more here okay we're going to look at one
13:49more and then I'm going to explain how I am going to approach GameStop going forward okay so now check this out all right look at what happened before GameStop had its short sneeze right look at what happened before GameStop had its short sneeze GameStop's adx drops below 20 when it drops below 20 not only does it drop below 20 it spends several weeks underneath 20 several weeks right 92 days three months 64 trading sessions of GameStop essentially sitting in this range but when Gamestop started to break out and that adx started to rise after spending several weeks underneath the threshold that we've talked about folks I I I don't have to be the first one to tell you that this was significant now am I telling you that there is going to be a squeeze on GameStop well we already know that that's eventually going to happen and I can't guarantee you anything about what's happening with the current trending range of price action but I'm going to do something now we're going to turn on the dmis now okay now with this indicator you guys can see there's a yellow and a red line the red line is the DMI negative that speaks to bearish price action the DMI positive speaks to bullish price action when the DMI positive is super high up and the adx has risen above 20 that generally signals that there is a large move on the bullish side that's what we saw back here right that's why you saw a continuation of that move that's why when everybody was panicking Jackie and the tits gang work because shout out this indicator strength of trend DMI positive ultra high staying ultra high Rippy Rippy thanks for the free money now what's interesting about what's taking place right now okay now let me preface this by saying that it's still very early your adx is incredibly low it's arguably reaching lows that it has not seen in a full calendar year and the last time that it happened your DMI negative was above the positive when the adx started to explode and when that adx started to explode with the DMI negative above it that obviously led to significant moves to the downside in the same regard when you had the adx exploding and you're DMI negative was way up here
16:57that is suggestive that the Bears have control and if you zoom in on this bit of price action you'll see look oops sorry Bears had control but when the DMI positive flipped and the adx continued to remain elevated that led to significant explosion on GameStop significant explosions and what's happening right now okay is your DMI positive is staying above the negative your positive is staying above the negative now I'm telling you it's early because the adx is still way the [ __ ] down here when it's way down here it is not telling us that there's a massive move taking place right now it's preparing you for the massive move that's coming and if you continue to pay attention to those dmis once that adx starts to turn and rise in the same way it did right here right that adx starts to turn and Rise here and your DMI negative started to explode so right here was roughly when people would start looking at establishing a potential short position based on the dmis and the adx because they see it turning up after multiple weeks down with the DMI negative exploding as high as it is and that ultimately right if somebody had done that and taken a short position from that they would have done very well right 21% down so this is why I'm saying with this particular indicator now that it's all the way down here okay now we're paying really close attention to it because we know that there's an explosive move being prepared on GameStop and with that DMI positive staying above the negative as long long as that positive DMI continues to stay above if that adx starts to rise and starts to show strength you will begin to see positive strong momentum on GameStop and then here's the kickers right here's the kickers because you add all of your other technical analysis alongside your your thesis right and one of the most important things to to make a mental note of right now right one of the most important things to make a mental note of right now okay is that if that adx starts to turn and rise with the Positive DMI staying above you could potentially have a macd cross that may occur right near the center line underneath it while the RSI May potentially
19:58burst through the center burst through the EMA and lead to a [ __ ] explosive explosive move from Gamestop that's on the bullish side now on the bearish side right on the bearish side if you fail to get a significant and meaningful breakout through the macd and the RSI rejects the EMA and rejects the center line and then that DMI crosses the DMI negative crosses the DMI positive and starts to rise as the adx starts to rise you can anticipate that there is going to be a sharp swing to the downside now people will hear me say that and they'll say oh my God I'm so worried that what if it goes down what what what if it goes down what if it goes down well guys you have the ability to make money on GameStop both going up and going down now I know not all of you can trade options and I can appreciate that so if if you can't you know maybe you'll you'll miss some of the action because unfortunately there isn't a short ETF that I'm aware of of just GameStop okay but listen to me carefully I'm let me let me make sure I say this loud and clear for everybody in the back all right make sure I I make sure I say this loud and clear for everybody in the back all right I am not bearish on GameStop I am not a gay bear on GameStop I am a Trader who has the ability to take advantage of large moves regardless of what direction they occur in I am a long-term shareholder of GameStop I buy shares I don't sell them I buy options I sell them I make money to buy more shares okay now that I've said that I want you to understand something because I know the GameStop is going to make a large and explosive move I do not care about the okay that's maybe the wrong thing to say it's not that I don't care about what direction the stock moves in but from a trading and emotional perspective I don't care because I know that there are ways to take advantage of GameStop going both up and down and using that to my advantage to then add further to my GameStop position right so in my opinion and how I'm
22:54looking to approach this again not as Financial advice right this is from a professional Traders perspective and educational content only I am looking at this as a perspective that if I know for a fact that there is a monstrous [ __ ] move coming because I've seen it every other time that it's happened using that particular indicator then I should be spread not literally I should spread my trading thesis on GameStop through a host of different type of options for some folks you'll you you you're going to you're going to sell covered calls right because that's what you're comfortable with and that's what you like doing right for some folks it's buying puts and for some folks it's buying calls whatever your prerogative is right because I know the GameStop is going to make an explosive move and because I also know the GameStops implied volatility is relatively low all things considered I know that options contracts are relatively cheap they're a little elevated but all things considered they're relatively cheap and so if I know that there's a large move coming right and when I say large move I'm not talking about1 or2 dolls I'm talking at least on the upside I'm talking about probably a minimum of 7 to10 and then on the downside you're talking about a minimum of probably four to5 so explosive moves in terms of the percentage right 20% down and you're talking about 40% up right that's really significant so if I know that would it not be intelligent for me to look at the idea of being spread through some longer dated options that allow me to both stay away from the implied volatility should it continue to drop before that big move and wouldn't it also make sense that regardless of what direction that move happens isn't there a way to take advantage of that because I already know two things one options are cheap two IV is low so just is an example right if I bought a put and then I also bought a call right and again this is I'm just spitballing right let's say for example I bought a $25 call expiring in January and then I bought an $18 put also expiring in January and I said well I'm making a bet the gam stop is either going to move 20%
25:43down before the end of the year or it's going to go 40% up before the end of the year and then regardless of what happens whether it explodes to the upside or whether it dies to the downside side the implied volatility is going to start to rise exponentially and we know that because the adx is so low that the next move that happens is going to be a strong strength of trend and so that strength of trend is going to CL cause the implied volatility to start to Rocket and as that implied volatility starts to Rocket those contracts that you bought cheap and out of the money are now suddenly both in the money and also highly volatile meaning that the options that you bought 3 months ago are now suddenly worth 1,000% because both the implied volatility start to Skyrocket and the price mooned or dumped and so regardless of the loss that you may occur on the other side of the trade the win on the side of the trade that you ultimately end up getting should be so explosive and expansive that not only should it make up for the losses on the one side of the trade but it should also make you very happy in terms of the potential gains that should be made on the the positive side of things right you you see what I'm saying and because I know that the adx is telling me all of this that everything is so cheap and so low and that there's a big move coming it makes a lot of sense that if I was looking to establish some sort of options position I don't need to spend both loads of money I just need to Target specific strike prices that might be slightly out of the money with a lot of time to go and I'm willing to bet right I'm willing to BET right because that's what trading is right you're taking a gamble right and I'm willing to bet that this adx is not going to spend another [ __ ] 90 days right I'm willing to bet that it's not going to spend another 90 days at this low because if you start talking about that that would be GameStop's longest period of time in the history of the stock ever that the adx stayed
27:52that low I'm willing to bet against that happening and I'm willing to bet that there is going to be an explosive move that takes place before that period of time now if I didn't like the idea of a spread right if I didn't like the idea of a spread and I thought that I could time a top or a bottom one of the things that I would probably be waiting for is unusual whales because every single time that we have seen GameStop make an explosive move whether it's been down or whether it's been up unusual Wales has always had a mega influx of multi-million dollar orders just start boom boom boom boom and when those orders start to come in the price doesn't immediately start to adjust to it because somebody is accumulating a position to then make the stock do what they were hoping to have it do right so this is why I say if I if I didn't want to do a spread right if I if maybe if I didn't have the ability to buy puts right and I didn't want to be short on GameStop at all then I would just sit there and I would say okay well if I want to test my luck then I got to hope that the next large batch of orders that I start to see is bullish giving me reason to believe that the explosion could be bullish and then you would lean on the bull side right because of what you're kind of seeing here but we've kind of outlined you know ultimately the thesis that we anticipate to see at this stage right and then we throw in kind of everything else right we throw in a little bit of everything else right so we've got like our Ballinger bands and our moving averages right and with our Ballinger bands and moving averages GameStop share price is right at the center of the daily Ballinger bands as they continue to squeeze once again your daily 200 continues to rise through that Pink Box Zone that we've marked off which we know is incredibly important and still has yet to be tested since the Golden Cross right and so we know that there's all these layers of support down here so if price got down here again put in bullish Divergence
29:59tested the daily 200 showed reason that it was going to have support here and that adx started to go like this and GameStop started to go like this [ __ ] GameStop is going to [ __ ] rip the technical analysis to manipulated stocks that's just what dumb people say who are too [ __ ] afraid of putting in work we have used this successfully on GameStop so many [ __ ] times it's not coincidence and I don't get lucky all that often it's it's because that's what the technical analysis says you guys say that this is one of the most manipulated stocks in the stock market right if this is one of the most manipulated stocks in the stock market then there's probably a lot of beep boop beep boop going on right if there's a lot of beep boop beep boop that means that a lot of that beep boop beep boop is going to follow this beepo be Boop and if this beep boop beep boop says beep boop beep boop explody I'm going to [ __ ] buy calls and get rich but it doesn't have to be rocket science it doesn't have to be complicated or complex it's just technical analysis and yes it really does work but this right here folks this indicator paired with our other technical analysis is showing us the GameStop is setting up for something explosive and look at this today like this thing is setting up it is setting up for an explosive [ __ ] move it just is and if you have the patience and you have the skill or the ability to take advantage of this this is the best time on GameStop because guys here's here's my favorite part here's my favorite part right people have been complaining nonstop for the last three to four [ __ ] months now Ryan Cohen owes me I save his company me with my 13 [ __ ] shares I saved the company so he owes me what if what if Ryan and the company announced something out of nowhere and you had the wherewithal the vision the skill the talent the patience to have start started loading a GameStop position just prior to a news event that you didn't know was coming and then it explodes and you wake up one morning
33:07and the share price is up 160% and the calls that you bought are up thousands of percent and you've Chang your life and you're crying because you're so happy been there done that one of the most EXC exting things that ever happened in my [ __ ] life bro Bros I I'll do it again now the last piece of analysis that I will throw your guys's way here all right we have have a trend based Fibonacci golden pocket here folks we have a trend-based golden pocket time zone the GameStop is going to start going through on Thursday October 17th until October 28th now there have been plenty of moments in time where these Trend based golden Pockets have been incredible and I'd like to show you a few of those examples okay so example number one right take your trend-based FIB time zone right from the low of GameStop to the sneeze High to the next lowest low and look at what that golden pocket produced the very first time that you went through it chat 50% move that was from the original sneeze that was the trend based golden pocket right and then if we go over to this one right from the low to the high to the low look at the golden pocket that was produced in here as well right now this one obviously you guys can see was to the opposite side but once again oops once again look at the size of the moves that were made in the golden pocket okay so now you've kind of understood like these golden Pockets these trend-based golden Pockets boy those sure seem somewhat important right those sure those sure seem somewhat important right now I'm just drawing this here really quickly just to see and that was the same thing okay all right so we have a giant one right we have a giant one that we are going through here October 16th starting right end of day October 16th until October 28th now not only is that really exciting right not only is that really exciting but then if we also pull out the the just the regular FIB time zone pulled from the low of the sneeze event to the high you'll also notice that shortly after we go through that golden pocket FIB time zone you have the
36:04eighth FIB time zone of the regular one that occurs at the very beginning of December interestingly enough the very beginning of December last year was when we saw a 50% rise on the share price of GameStop so towards the end of this year we are going through multiple multiple FIB time zones not only are we going through multiple FIB time zones but we talked about that adx being at a record low putting these things into combination gives us reason to think that yeah GameStop probably not going to stay range Bound for the entirety of the rest of this [ __ ] year it's probably going to make a giant [ __ ] move now if you don't know this either right one of the things that we did when we caught the original move with GameStop at the $10 lows is interestingly enough there was actually a giant Fibonacci time zone that either happened right before or just shortly after gme started to Boom so look at that right look at that just before the cat came back a Fibonacci time zone pulled all the way from the low to the high of the original sneeze that FIB time zone somehow magically aligned days before the cat came back and sent the stock to [ __ ] Pluto and so now we have another really significant and important one happening at the beginning of December and at the middle of this month folks stay excited stay focused stay patient but if you have the ability to take advantage of these moves both up and down I am telling you now GameStop is going to start getting crazy and Lord forbid one random announcement one random move one random thing sends GameStop to the [ __ ] Moon and you started establishing a position just before that event happens folks that is the lifechanging trade that people search their lives for and all it takes is one because you know this stock and you know that at any given point in time on this particular stock Anything Goes are you ready to take advantage of this move coming