Papafox's Daily TSLA Trading Charts

[SpiceWare]

That would also suggest that the people manning the short seller trading desks have worse work-life balance than the long shops.

Seems likely

 

[EVNow]

Perhaps the most likely outcome is a UK general election.

And Corbyn as PM. Would be interesting to watch how the markets react to a left wing government, we haven't had in the west for a long, long time.

 

[neroden]

My guess: The institutional buyers are back in the office, taking advantage of the low prices on offer after last week's predominantly short-driven trading.

That would also suggest that the people manning the short seller trading desks have worse work-life balance than the long shops. I'm ok with that.

There is evidence of this, yes. See the photo of Mark Spiegel, or read one of the articles about Andrew Left.

 

[neroden]

And Corbyn as PM. Would be interesting to watch how the markets react to a left wing government, we haven't had in the west for a long, long time.

I would expect short-term panic and then a long term boom as they realize that Atlee / FDR policies actually, y'know, work.

 

[Papafox]

Today TSLA climbed over $20 and recovered more than 2/3rds of last week's losses. Bravo. Today's gains were anything but inevitable, though.I truly believe the shorts were ready to take advantage of any weakness and if the macros were down today they would have hit hard with a big mandatory morning dip. Seeing that the shorts STILL were tagged with over 61% of the selling on a day with super-strength, I can only imagine what they had in mind if the macros were red and heading down. As for the buying, TSLA still carried a black-Friday pricetag into the non-holiday week, and once the stock started rising, the buying continued all day as the climb signaled that buyers could once again buy in without catching falling knives.

Today's gains illustrate the problems shorts face when they accelerate the decline in a poor-macro holiday week. It doesn't take much time to unwind their efforts once we get a good macro day and longs take advantage of the good prices. There's very little fear in the longs right now, other than concerns about the macros, and once the macros brighten up, TSLA can quickly regain lost ground.

I'm pleased that I picked up some Friday calls before close. My thoughts were that Monday could go either way, but after 4Q ER, TSLA should be considerably higher and so I believe I was investing and not gambling by picking up some J20 calls. Glad I did. I had sold a portion of my trading calls when we were in the 350s to have some cash on hand if there was a "nonsense dip". I saw last week's dip as a macro dip that was greatly exaggerated into a nonsense dip and bought back in. I'll likely hold these trading calls through the 4Q ER and then sell the trading calls near a local high but hold my core position for "the big one". Part of the reason why I do a small amount of buying on dips and selling near possible local highs is to give myself something positive to do when the SP takes a truly unjustified turn downward. My trading funds are less than 10% of my core position. Since I trade mostly from an IRA, there's no tax penalty for some shorter-term trades.

The NASDAQ opened considerably higher today. Notice how little dip TSLA showed during the 12:15pm - 12:45pm dip of the NASDAQ. The relentless climb of the NASDAQ made a short sell-off in the afternoon impossible. Notice on the TSLA chart how we saw an attempt at a descent into close around 3:30pm today, but the market brutally rejected that notion.

Shorts did 61.53% of TSLA selling today, a particularly high number on such a solid climb day because usually shorts sit out the serious manipulations on a day where it appears they're going to get crushed if they try to stop the steamroller. Their aim today likely would have been to push TSLA below the lower bb and suggest that the stock price was breaking down in order to try to create some fear. It didn't work. Instead, TSLA returned to the 340s, which has been its happy place recently. Considering the likely quantity of short manipulations today and the constant climb of TSLA, short manipulators likely lost lots of money today.

Looking at the tech chart, notice the climb from below the lower bollinger band to above the mid bb. Strong! The upper bb is at 358.22 now and will provide some resistance if the SP runs higher so quickly that the upper bb can't rise and get out of its way first. Meanwhile, at the bottom right corner of the chart, you can see the blue 50 day moving average looking like it is just a few days from crossing the red 200 day moving average for the golden cross. That'll make the technical traders happy and give TSLA a little boost.

The question now is whether TSLA will resume the old pattern of climbing higher than the previous two climbs of the past month. If so, we would eclipse the 366 touched recently but not held.

Conditions:
* Dow up 354 (1.46%)
* NASDAQ up 143 (2.06%)
* TSLA 346.00, up 20.17 (6.19%)
* TSLA volume 8.0M shares
* Oil 51.21, down 0.42 (0.81%)

 

[anthonyj]

Wow, 61% of selling done by shorts? Does this suggest that shorts are basically selling to the shorts that are covering? That’s hilarious

 

[AudubonB]

...here we go again....

 

[EVNow]

Wow, 61% of selling done by shorts? Does this suggest that shorts are basically selling to the shorts that are covering? That’s hilarious

Dumber shorts selling to dumb shorts. Never gets old.

 

[Papafox]

Wow, 61% of selling done by shorts? Does this suggest that shorts are basically selling to the shorts that are covering? That’s hilarious

Here's the shortish answer. When FINRA data says 61% of selling was by shorts, it means that 61% of selling transactions were given a tag of "short" on the ticker. The problem is that brokerage houses often group several sales into one entry and if any of them are considered short sales, the whole batch is tagged short. So... there is always some exaggeration of the number. We don't know the real percentage, but we do know when the stated percent of selling by shorts is in the mid 50s or above, there appears to be lots of manipulations by shorts, such as mandatory morning dip, capping, descent into close, etc. These manipulations can occur on days when there is zero net shorting vs. covering by shorts because on the one hand, some shorts are covering while others are opening new positions, but more likely the majority of short selling on such days involves selling in big quantities at critical times, covering somewhat slower to close that short position, and then repeating the process at critical times so that the net effect is one of pushing the stock price downward.

 

[Analyst007]

Here's the shortish answer. When FINRA data says 61% of selling was by shorts, it means that 61% of selling transactions were given a tag of "short" on the ticker. The problem is that brokerage houses often group several sales into one entry and if any of them are considered short sales, the whole batch is tagged short. So... there is always some exaggeration of the number. We don't know the real percentage, but we do know when the stated percent of selling by shorts is in the mid 50s or above, there appears to be lots of manipulations by shorts, such as mandatory morning dip, capping, descent into close, etc. These manipulations can occur on days when there is zero net shorting vs. covering by shorts because on the one hand, some shorts are covering while others are opening new positions, but more likely the majority of short selling on such days involves selling in big quantities at critical times, covering somewhat slower to close that short position, and then repeating the process at critical times so that the net effect is one of pushing the stock price downward.

Due to exactly this fact, I do not give any value to this figure. It does not make any sense to compare figures that are not calculated on a consistent basis.

I would appreciate if we could have a variable called "total share volume shorted". That'd mean, how many shares of the 10m traded for 1 single trading day were sold short and how many were sold by people owning the stock.

Does such a variable not exist?

 

[adiggs]

Due to exactly this fact, I do not give any value to this figure. It does not make any sense to compare figures that are not calculated on a consistent basis.

I would appreciate if we could have a variable called "total share volume shorted". That'd mean, how many shares of the 10m traded for 1 single trading day were sold short and how many were sold by people owning the stock.

Does such a variable not exist?

The short answer, no.

Of course, it does exist. But the short sales market is (IMHO) deliberately opaque and time lagged.

We do get a 2x/month statement of the net shares short that is itself on a 2 week lag. So at the end of November, we'll get a report on the number of net shares short from the middle of November. That's a readily available public number.

The closest thing to real time short interest data we've seen comes from S3 Partners, and gets posted here as links to tweets by Ihor Dusaniwsky (Director of Predictive Analytics at S3). I believe they're using end of day transaction level data (that they themselves get via subscription) from a subset of the market (some exchanges are included, some aren't), and using that to stitch together a net short interest change on a day by day basis.

However, even that data, while better than nothing, still undergoes pretty large adjustments at time when the 2x/month short interest is published - I believe we've seen adjustments as large as 2M shares for the TSLA tracking (out of ~30M).


Back to my original claim in the 2nd paragraph, clearly the data exists. That it is this hard to actually have access to it tells me that it's intentional on the part of the markets / exchanges. The market makers / exchanges want the volume that the short sellers bring to the market, and the short sellers want (need?) the curtain as what they're doing won't work well enough to draw people to do it if it happens in the light of day.

(Again, to be clear, this is my opinion and attempt to construct a reasonable description and motivation for something that really doesn't make good sense to me. And it's another reason why a 2 year investment horizon for me is rabidly short term).

 

[Papafox]

This morning's TSLA trading was what I expected from the shorts yesterday, only the macros were too good and the TSLA price too much a bargain for them to pull it off. And so they tried today. You can see the distinct icicles of elevated short-selling in an effort to sink the stock price. The 10:40am dip was quite spectacular, but longs started buying the dip and by 2:00pm the shorts were playing a game of whack-the-mole in order to keep TSLA from climbing into the green and scaring the daylights out of other shorts. Thus, they expended enough ammo to keep TSLA in the red today. To help cover some of the manipulative selling today, shorts had an opportunity to reload during the final minute of market trading today when 163,000 shares traded hands. The volumebot.com chart reveals that the percentage of selling today by shorts was quite high again, nearly 60%, suggesting lots of attempted manipulations and with a stock price that was mostly rising from the 10:40am low, short manipulators had their second day in a row of losing money for their efforts. Couldn't happen to a nicer group of scalawags.

After a gain of more than 20 yesterday, today's loss of 2 is nothing to fret over.

Good news is starting to pop up:
* The DOW climbed today on hints from the Trump administration that discussions with China regarding trade are taking place on multiple levels
* GM's CEO suggested that the Trump administration look at more EV friendly regulations if it wanted to see more GM production in the U.S.
* A bipartisan group of legislators is promoting legislation that would enact a carbon tax on vehicle gasoline, but the legislation is revenue neutral and would include dividends to citizens, which would either reimburse them for some of the gas tax or could be used to operate EVs.

Overall, the problems GM has been having and its decision to pursue EVs and autonomous driving reinforce the reality that Tesla has been on the right track all along.

The NASDAQ closed about even with Friday's close, and TSLA trading was not particularly in sync with the NASDAQ's gyrations today

TSLA shorts were tagged with 59.66 of the selling today. With two days of possibly heavy losses to the short manipulators, I would expect we start to see the percent of selling by shorts begin to drop in the coming week, along with the obvious manipulations. All bets are off if some negative news comes out or the macros go nutty, however.

Conditions:
* Dow up 108 (0.44%)
* NASDAQ up 1 (0.01%)
* TSLA 343.92, down 2.08 (0.60%)
* TSLA volume 6.3M shares
* Oil 51.56, down 0.07 (0.14%)

 

[EVNow]

These manipulations can occur on days when there is zero net shorting vs. covering by shorts because on the one hand, some shorts are covering while others are opening new positions, but more likely the majority of short selling on such days involves selling in big quantities at critical times, covering somewhat slower to close that short position, and then repeating the process at critical times so that the net effect is one of pushing the stock price downward.

Yep. Today for eg., if there was no MMA in the morning, we'd have ended above $350 instead of $2 down.

 

[Papafox]

Due to exactly this fact, I do not give any value to this figure. It does not make any sense to compare figures that are not calculated on a consistent basis.

I would appreciate if we could have a variable called "total share volume shorted". That'd mean, how many shares of the 10m traded for 1 single trading day were sold short and how many were sold by people owning the stock.

Does such a variable not exist?

The figures are relative, not exact, but they are useful. In fact, I've gotten to the point where I can often guess about where the percentage of selling number will be by looking at the apparent manipulations of the day. With a few Teslaholic friends of mine I guessed 59% today and pretty much nailed it. I also have seen the trends in situations like this. When manipulators lose lots of money a few days in a row, they lose some incentive to keep shoveling money into the fire at such a hearty clip, and you typically see the percentage of selling by shorts numbers come down. The reason they come down is because of less manipulations, and this in turn creates a more friendly trading environment for long investors. There's value in considering various data points when making a trading decision, and I'm providing these points for those who wish to incorporate them. You're free to skip them, of course, if that's your preference.

 

[Papafox]

So, how do you keep TSLA from rising like a hot air baloon on a day when the NASDAQ rises nearly 3%? Answer, you manipulate the "sugar" out of it. Despite the stock being up nicely in pre-market trading, TSLA dropped into a short MMD right after open and then spent the whole morning in a game of whack-the-mole. At noon, The Fed chief announced more dovish expectations for interest rates and the broader markets soared. The tech stocks I followed closed up 4-6%. Might some bad news have accounted for TSLA's sub-par performance today? Well, unless there were 7 different instances of bad news that line up with the 7 dips, I don't think so. With shorts selling over 58% of TSLA today, and with volume still unusually low, longs continue to wait out this nonsense trading because they know better days lie ahead.

My best guess is that the really hard-core anti-Tesla shorts are concentrating on keeping TSLA below 360 as long as possible. Tesla must announce its intentions regarding the March notes (cash payoff vs. default combo) by December 1 or the notes are handled in the default fashion. The hard-core shorts still want to see Tesla with as little cash as possible, even though the numbers strongly suggest Tesla will generate billions of dollars of free cash flow in 2019 and available cash is not an issue with Tesla.

Just how is Q4 looking? Troy came out with a guess at Q4 production and delivery numbers today, and they look good with Model 3 getting over 60K units produced, S & X at over 25K produced and total deliveries of all vehicles close to 90K. Troy's estimates for Model 3 are admittedly conservative and don't add much for the coming rate increases. Other credible sources are suggesting even higher production and delivery numbers. Even though there will be costs associated with tariffs in Q4, the Model 3 should see continued significant cost reductions, due to improved production methods and higher volume. Various estimates of Model 3 ASPs suggest not too big a change from last quarter. Bottom line is that Tesla is on track for a positive Q4 and that will positively affect the SP.

In contrasts, shorts are looking at charts such as this one above from Bloomberg that show production not far above 4K/wk and about to run over a cliff. Part of the reason for the shorts continuing to make bad decisions is bad data in. That includes articles in SA, reports from the major media, and projections such as the one above.

So... we're just in the doldrums as shorts try to push the price down or at least keep it from running into the stratosphere while Tesla continues to expand production, deliveries, and generate a bright future. No wonder volume is so low. Longs are sitting put with their TSLA holdings, waiting for the next wave of good news to roll in.

The NASDAQ chart shows the significant jump up when word of the Fed's comments came out at noon. Comparing TSLA to the NASDAQ chart is a great way to understand just how much manipulations shorty was up to today with TSLA.

TSLA shorts did 58.58% of the selling today, the 5th trading session in a row near 60%. If you believe shorts aren't manipulating like crazy right now, I have a large red bridge between Marin County and San Francisco I'd like to sell you.

On the tech chart, you can see that TSLA continues to rise on its current leg of the slow-climb. The 50 DMA is only a couple dollars away from crossing the 200 DMA now.

Conditions:
* Dow up 618 (2.50%)
* NASDAQ up 209 (2.95%)
* TSLA 347.87, up 3.95 (1.15%)
* TSLA volume 4.1M shares
* Oil 50.52, up 0.23 (0.46%)

 

[Artful Dodger]

Tesla must announce its intentions regarding the March notes (cash payoff vs. default combo) by December 1 or the notes are handled in the default fashion.

Thanks for this most informative post, as always! Since Dec 1st is at Saturday, does that mean Tesla can wait until Mon, Dec 3rd to announce it's intentions for the Mar 2019 notes?

Thanks, and Cheers!

 

[Waiting4M3]

Thanks for this most informative post, as always! Since Dec 1st is at Saturday, does that mean Tesla can wait until Mon, Dec 3rd to announce it's intentions for the Mar 2019 notes?

Thanks, and Cheers!

Tesla has to announce by Dec 1st. It has nothing to do with Dec 1 not being a business day. From this filing

"We will inform holders of the settlement method we elect for any conversions occurring on or after December 1, 2018 no later than December 1, 2018"

 

[gwright]

Tesla has to announce by Dec 1st. It has nothing to do with Dec 1 not being a business day. From this filing

"We will inform holders of the settlement method we elect for any conversions occurring on or after December 1, 2018 no later than December 1, 2018"

That actually seems to be an important announcement that may shed light on Q4 performance to date - and pretty much must happen today or tomorrow. If TSLA elects to settle in cash (suggesting continued strong operations), does that signal momentum for the stock price to the market?

 

[Toolsmack]

I was wondering what the effect on an announcement to settle in cash will have on the mentality of any shorts who think that they must keep the share price below 360 to force Tesla to pay cash they don’t have and force bankruptcy.

If announced to pay in cash do they double down thinking the cash crunch is coming in Q1/Q2 or do they panic knowing their thesis is not correct. Of course it could be a mix of both of these outcomes

 

[Artful Dodger]

Tesla has to announce by Dec 1st. It has nothing to do with Dec 1 not being a business day. From this filing

"We will inform holders of the settlement method we elect for any conversions occurring on or after December 1, 2018 no later than December 1, 2018"

Thank-you. Your post just earned a permalink in my "Best of TMC" folder.

Cheers!