Has The GameStop Sell-Off Started?

The longer that GameStop Corp. GME trades sideways with declining average daily volume, the greater the odds that the bears drive it lower.

When stocks rally, the volume is typically higher than average. This is a result of new buyers entering the market. These buyers decided to buy. It’s their choice. No one is forcing them to do so.

But sometimes sellers are forced to sell. They could need the money to pay bills or to meet a margin call. This means that in a neutral market, there may not be any buyers, but there will always be sellers.

When stocks are trading with light volume, like GameStop is, they're vulnerable. This is because there isn’t enough volume, or buyers, to absorb all of the sellers’ shares. This forces the stock into a downtrend.

GameStop is trading lower Tuesday and over the next few weeks, there’s a good chance it moves even lower.