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UNDERSTANDING THE SELL WALL: A technical stock market strategy that can help with Sports Cards

I’m going to jump into a juicy topic…one that I’m very passionate about. Please bear with me as I try to help you understand how the stock market and even the cryptocurrency market can help you with Sports Cards!

 


WHAT IS A SELL WALL?

Picture a SELL WALL like this….

To begin, let me shed some light on a very important term….the SELL WALL. What’s a sell wall? Can it help me determine if a specific card can breakout? Definitely. Looking at the sports card market with the tools from the stock market can certainly help you. One of the easiest concepts is the sell wall. But along with that, I will describe here some technical terms I learned when I was heavily invested in stocks and cryptocurrency. These helped me make my calls which gave me a huge profit in a manageable margin. Ultimately, I am certain that this might help you level up your sports cards investing.

The sell wall is the amount of sell orders of a given stock or cryptocurrency. A sell order is defined as the listed price a seller is willing to sell the given stock or currency. Now that we got that out of the way, we can talk about how we can potentially identify breakouts in sports cards. Breakouts are basically the possibility of a spike in the price which will have a new support level. This support level, in layman’s terms, is the accepted price of the stock which can easily be absorbed by the market’s demand. A bullish breakout will be an uptrend. On the other hand, a bearish breakout will be a downtrend. Further, a bearish trend is caused by the market’s inability to absorb the listed price which causes resistance. Resistance is defined as the price point at which the rise in the price of a certain asset is being prevented by the number of sellers who wish to sell at that price.

THE SPORTS CARD PARALLEL

All of these terms are to help lay the groundwork of what we may be able to leverage in the sports cards markets. In our current world selling an item which uses eBay give us acccess to a transparent platform, wherein you can see the sold price and amount of items being sold or currently sold. Ty has been giving us reports and analytics around this for years…and has plenty of deeper insights on the Patreon Premium site. But the majority of the sports card market is basically a degree of the stock market. Understanding the fundamentals can certainly up your game in the sports card investing industry.

In eBay, you can see consistently what are the sold price of a specific product. To easily understand how we can use the sell wall we need to give a hypothetical example. Let’s say there are currently six pages of Zion Williamson Panini Silver Prizm in pelicans uniform. The price ranges $400 to $10,000 depending on the condition. These prices are listed price therefore it is the sell wall. Now, in order for the price becomes the market price. A buyer must purchase the item based on the seller’s listed price. So, what makes the price go up? When the demand of the price is willing to pay more of the listed price. That means there will be a level of support that the market is willing to easily absorb a specific price.

BULLISH BREAKOUT?

The questions then becomes, how can we determine if a current card is going to have a bullish breakout. There are three elements that I actually use to make it easy. First, I look at how thin the sell wall is for that specific card. This means that there are only a few listings of that specific card. Having a small amount of cards in the market will be more easily absorbed by the market than six pages long worth of listings of the same card.  Second, I look at how far the gap in the price of the same card with another listing. If there are only two listings that price a card at $10 and the next higher priced listing is at $50, once the $10 cards are absorbed the price will increase towards the next priced listing. It does not necessarily entail a jump into the next one, but if the demand dictates such, the price will follow. Third, I look at how transaction volumes of that specific card occurs. Is it often that someone buys out that specific card at a specific price? Is there a lot of transactions going on or market demand for that? How often does another similar conditioned card get listed once something sold?

Once we get the answer to this question we can determine how strong the support level exists for that specific card. If the strength is beyond the normal, it can breakout and be able to break the resistance price. Hence, the card will be valued at a higher price.

 I can still remember during the pre-season of 2019 major league baseball that there were only three listed PSA 10’s 2017 Bowman 1st Autograph of Ronald Acuña. They were listed around $1,100 to $1,500. Honestly, I was quite surprised because when I compared his listing with other players, he really was rare. My conjectures are as follows: (1) people love his game and preparing to sell during baseball season, (2) people are buying out and keeping it for the long term gain, (3) $1,500 is the resistance price, and (4) auctions always sell near the lowest listed price.

Time passed by and the season started and people bought all of the listed items up to $3000 (including a BGS 10). As of the time of writing, there are only two listings of that card. Lowest priced listing of that card has an asking price of $2,200. The other listing was a package of two PSA 10 of that card which has an asking price of $5,500. A sold ungraded card of his recently sold at $1,297.

 


Here are some of those ACUNA’s on eBay now:


Now, let’s look at an opposite scenario that happened, the hype surrounding Vladimir Guerrero Jr. was just amazing. He is an overwhelmingly good prospect which is truly similar to his dad. His PSA 10 2016 Bowman Chrome 1st Base Autograph were selling more than $1,000. But due to the lack of support of that price point, the market price deteriorated to $800 value. Certainly, the expectations for him was just too high to match his skills in the field. However, there was just too thick of a sell wall and ultimately to liquidate, the sellers settled to a lower price to prevent further loss. You may call this as a panic sell by small time investors so that they can reuse the capital more efficiently. Thus resulted in what we currently see now in his ebay listings. The last sold price of the same card that sold card is now just at $828.

What can we learn from this?

Certainly, performance/stats heavily influence the price but there are MANY situations where breakouts occur if the sell wall is thin. The resistance price level is able to be absorbed by the demands of the market. Moreover, support level was easily strengthened due to the lack of availability of the card. Understanding eBay and/or the overall sports card market…is a lot like understanding the stock market. The more we learn the more we will have an upper hand… or “edge” as Ty calls it. I like having an edge. What do you think?

Leave a comment below or email me at paolo@breakerculture.com for any topic suggestions.

“Paolo is a philosophy major, veteran and a sports cards enthusiast. His dreams are that, one day, he’ll be a published writer and to have better reasons in making excuses to his wife when buying a card.”

 


Here are some of the CRAZIEST 2019 Baseball Cards on eBay:

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Erik
Erik
8 months ago

‘The trend is your friend’; keep an eye on trending prices. There has recently been super high volume on Zion Prizm cards as he has made his return. When that volume drops; the price might also drop as a ‘blowoff Top’ (stock market chart term). It will eventually settle at a lower price; that might be a better time to buy.