Papafox's Daily TSLA Trading Charts

[Papafox]

TSLA chart above

QQQ chart above

On Friday the market makers would really have loved to see TSLA descend to 420 and give them their 3rd big win week in a row. It didn't happen. Part of the reason was that the NASDAQ was a solid climber throughout the day, as expressed in the QQQ chart above. You have to give the pirates points for trying, however. Look at those two massive Mandatory Morning Dips that were apparently based off tiny and momentary dips in the NASDAQ. Ditto with afternoon QQQ dips, as well.

I had speculated that with Pierre Farragu upping his price target, changing from hold to buy, and signalling that he didn't think waiting for a dip before the 3Q ER was a reasonable expectation any more, and then on Thursday hearing the date of the 3Q ER is a relatively soon Oct 21, I thought that some of the big dog investors who wanted into TSLA prior to the ER would start buying and volume would pick up enough for the manipulators to encounter problems.

Actually, the opposite happened. Volume was a tiny 28.3 million shares. When you look at some of the clear manipulations during the day that would depend upon short-selling, the number of legitimate long sales would be noticeably smaller than even that 28M shares. What happened is that the current TSLA shareholders became all the more determined to HODL on a day when the NASDAQ gave little opportunity for successful pushdowns of the stock price. Thus, with nobody wanting to sell at these prices and with no macro action that would allow the manipulations to gain any traction, TSLA climbed today. Bravo!

Coronavirus Update

As we progress into a cooler time of the year there's reason to see an upturn in COVID 19 new cases in the United States.

You can see from the top chart there's been a bit of an uptrend lately, but probably nothing to spook the market yet, particularly with the daily deaths still in a slight downtrend (they lag the new cases by a few weeks).

This past week, the POTUS stated how quickly the Regeneron monoclonal antibody infusion managed to improve his symptoms. Both Regeneron and Eli Lilly have large quantities of monoclonal antibodies ready for distribution once the FDA awards emergency authority to distribute. Eli Lilly's single antibody product wasn't as powerful as Regeneron's product and Eli Lilly went back to the lab, created a cocktail with two antibodies in it, and their new product appears to be robust. The appearance of effective, safe monoclonal antibodies could be a game changer and something that could boost the market, but we may see the FDA trying to avoid granting authority before the election so as to appear unswayed by political pressure from the current administration. If that occurs, we will still see a potential bump in the market when these products gain emergency authority at a later date.

My personal opinion is that the bar for therapeutics such as monoclonal antibodies can be much lower than the bar for vaccines, because those with COVID 19 are in a substantially higher risk situation than a healthy person taking a vaccine. If the risk of taking the monoclonal antibody is substantially outweighed by the benefit, the FDA should move forward with emergency authority.

Looking at the tech chart, notice that the lower bollinger band has climbed to nearly reach the 50 day moving average at about 390. This combination of two reliable sources of support adds up to a really excellent support mechanism at the moment, if needed. Zooming out, notice that consolidation periods of up to a month have been pretty common during this massive climb. Since September we've seen two notable dips: the first was the fall from 502 after TSLA announced a $5 billion cap raise at about the same time that TSLA got snubbed by the S&P500 committee. The 2nd dip was the battery day dip. Take out some of the short-term volatility and TSLA has been trading in the low-to-mid 400s for over a month now and only 8 trading days remain before the 3Q ER. Tick, tick, tick.

For the week, TSLA closed at 433.95, up 18.86 from last Friday's 415.09. It's been a good week with the stock price hovering above the mid bollinger band and that mid bollinger band curving upward. Have a great weekend!

Conditions:
* Dow up 161 (0.57%)
* NASDAQ up 159 (1.39%)
* TSLA 433.95, up 8.03 (1.89%)
* TSLA volume 28.3M shares
* Oil 40.60
* Percent of TSLA selling tagged to shorts: 37%

 

[Papafox]

TSLA chart above

QQQ chart above

I bet many of you could give today's blow by blow summary of TSLA trading today, so let me run through it quickly and see how closely our impressions match. As with many Monday mornings, TSLA opened in a buying frenzy, with the stock price quickly exceeding 445. Alas a small dip in QQQ led to an opportunity for big hedge funds to engineer the day's first bobsled run (through short-selling and then covering lower). Note: all bobsled runs today are shown with black lines.

At 11am there was a slight lessening of QQQ's climb rate for a few minutes, which justified bobsled run #2.

About 1:30pm the manipulations kept TSLA's gains down to about 2.2% while QQQ's were 3.6% and climbing. At that moment, the TSLA investors called "bullsugar!" and started bidding TSLA up, seeing that it was ridiculous for the price to be lagging this far behind the NASDAQ's. TMC member @viridi said in this post, "As TSLA approached $444.00, a very large sell order was put in at $444 (20,000 plus shares) and then pulled (twice now). Traders trying to maximize profits do not put in this kind of order. This happened after TSLA was pushed below $444 a few minutes ago."

At about 2:30pm, QQQ reached the peak of its climb and started a slow descent. This macro peak led to a major bobsled run for TSLA as the stock gave up a good portion of the day's gains. Assuming that hedge funds were adding steroids to the bobsled run heading into close, you'd expect them to be doing some major covering of their shorting at the 4:00pm minute, and with volume of 1.1 million shares in that minute, it looks like there was plenty of opportunity for covering.

My guess is that you could have guessed many of these moves yourself, since we see them routinely. The end result was that TSLA gained less than the NASDAQ or QQQ today because of the manipulations. Normally NASDAQ and QQQ are reasonably close together, but today QQQ outperformed the NASDAQ 3.09% to 2.56%.

In news:
* Tesla received a bond upgrade from Standard and Poor's (B+ to BB-)
* Bullish analyst Pierre Ferragu during interview with Rob Maurer said that Tesla will be more valuable than Apple, Microsoft, and Google "Without any doubt".
* Cathie Wood predicts that TSLA annual rate of return over the next 5 years will be about 45%, according to this post

The max pain chart gives us some idea of what hedge funds and market makers want to avoid between now and Friday. The number of calls at 430 and 440 are significant, with a growing number at 450 and an enormous number at 500.

Looking at the tech chart, you can see the general uptrend of the past couple weeks trading but most of the climbing is associated with gap ups at open. The very short white candles and the black candles show weakness during trading hours, which I believe is a direct reflection of the level of manipulations underway.

Anyway, the high propensity for the macros to be positive on Mondays continues.

Conditions:
* Dow up 251 (0.88%)
* NASDAQ up 296 (2.56%)
* TSLA 442.30, up 8.30 (1.91%)
* TSLA volume 38.8M shares
* Oil 39.46
* Percent of TSLA selling tagged to shorts: 38%

 

[Papafox]

TSLA chart above

QQQ chart above

Tuesday was one of those inexplicable days when TSLA showed more strength than expected. Perhaps part of the answer was how well the Mandatory Morning Dip was dispatched. Perhaps the answer is that as of Tuesday night, only 6 trading days remain before the Q3 ER. Perhaps the hedge funds gave the manipulations a rest today, hoping for a bigger push downward on Wednesday. After all, TSLA has already enjoyed 5 green days in a row and 6 in a row is a rarity.

In any event, TSLA showed some general correlation to the NASDAQ but at times did its own thing and gave minimal response to some NASDAQ movements. Volume was a thin 34.5M shares.

Of interest:
* @gabeincal has posted an excellent drone flyover of Tesla's Fremont facilities:

In news:
* Tesla announces Model S price cut

Looking at the tech chart, you can see that the white candles remain short and mixed with black candles (positive for the day but close was lower than open), we're still in a trend of retail investors bidding the stock price up by open and then manipulations holding it back during market trading hours. One important distinction today is that TSLA closed more than halfway up from the mid-bollinger band to the upper bollinger band. We're in a good neighborhood at present.

All in all, I'm holding my position to benefit from a likely upward trend into the Q3 ER, and I plan to hold through the ER as well.

Starting today, I'll be including TSLA IV from Market Chameleon in the conditions numbers

Conditions:
* Dow down 158 (0.55%)
* NASDAQ down 12 (0.10%)
* TSLA 446.65, up 4.35 (0.98%)
* TSLA volume 34.5M shares
* Oil 40.11
* Percent of TSLA selling tagged to shorts: 39%
* IV 76.2

 

[Papafox]

TSLA chart above

QQQ chart above

As we last left off, Tuesday's TSLA trading showed unexpected strength as we approached close. We saw the commonly executed pushdown right before open, mandatory morning dip, and nice recovery from that dip. TSLA gyrated with the NASDAQ, but by mid-afternoon TSLA shrugged off the macro's woes and just started climbing.

Tuesday afternoon's strength continued into Wednesday's trading, big time. Right after open, TSLA climbed and never looked back. You can see the macro's dips and gyrations exerted minor effects upon TSLA, but it was clear that TSLA had broken free of the macros on Wednesday as was going to climb. Volume increased somewhat to 48 million shares, but this is not very high volume for showing such strength. I suggest that current TSLA investors are not particularly willing to sell prior to the Q3 ER, and so with 48 million shares to be purchased the price had to run higher. We're only 5 trading days away from the ER.

Ask yourself this question: If TSLA on Thursday started heading downward and looked like it could dip below 450, would you sell? I sure wouldn't, as I see the ER and the next 10 years of TSLA looking too attractive to play such a dip, and this psychology might be the key to the strength that TSLA is experiencing as we move closer to ER day. After recent glowing predictions by Cathie Wood and Pierre Ferruga, Ron Barron appeared on CNBC and predicted that TSLA is on its way to becoming a $2 trillion company. Do the math in each case and you're looking at the possibility of 50% appreciation per year for the next decade. Once bearish Goldman just upped its price target from 400 to 450 today.

When Lucid underpriced their planned vehicle just below the Model S price, Elon responded today with this Tweet. It really was a masterful way to get the media to announce for free that Tesla has just cut the price on Model S. My guess is that this week's price cuts make the Model S before the 2021 redesign look attractive enough to pull buyers forward to the current vehicle. I suppose S and X (which just received a 6% range increase) will sell in decent numbers in Q4.

Looking at the tech chart, you can see that the intraday trading included a bounce off the upper bollinger band. That upper bb is showing a few pennies below 465 and should rise somewhat on Thursday.

Conditions:
* Dow down 166 (0.58%)
* NASDAQ down 95 (0.80%)
* TSLA 461.30, up 14.65 (3.28%)
* TSLA volume 48.1M shares
* Oil 41.11
* Percent of TSLA selling tagged to shorts: 40%
* IV 79.2

 

[Papafox]

TSLA chart above

QQQ chart above

When I checked TSLA's chart on Thursday I was a bit confused until I realized what end of the week it was, then everything made sense. Macros opening low gave the manipulators lots to work with and they did indeed take advantage of the situation. During the morning's big dip around 10:45-10:50am, TSLA was down 2X QQQ's percentage dip. That's a bit excessive, given Wednesday's strength, but it's not too abnormal. Alas, as the macros recovered, it is always easier to slow a stock's recovery than to push it down, which is exactly the fate that befell TSLA. At close, QQQ was down only about 0.6% while TSLA was down about 2.7%, for a 4.5X multiple. Obviously, someone wants to make money on sold options come Friday, and the capping to keep TSLA from recovering with the macros was quite evident.

Even though the Max Pain is 400 for Friday, take a look at that clear dividing line between 450 and 460. What has happened is that someone has been loading up on puts to such an extent that most every strike price at 450 and below has puts exceeding calls going into Friday's trading. It goes without saying that market makers and hedge funds will want to protect the many calls at 460 and above that expire on Friday, but compare the puts to those on Monday's max pain chart, and you can see that someone is betting lots of money that TSLA will fall on Friday, a day that is a mere 3 trading days away from the 3Q ER. Looks like a robust manipulation event is being planned.

After a month and a half with percent of TSLA selling by shorts residing around 38%, the number jumped way up to 48% on Thursday. Is this a clear sign that shenanigans is afoot? But of course.

Looking at the tech chart, the uptrend of the past two weeks is evident. All bets off for Friday, but then sanity should return next week. One handicap today had working for it was that it was preceded by 6 green trading days. I can't remember the last time I saw 7 green days in a row.

What to do about the manipulations? There's a regular participant in the main investor's thread who describes talk of manipulation as "whining". I think "whining" would entail helpless feelings of this being unfair. Instead, I think most of us who follow the trends in manipulations look at it quite differently. Short term manipulations, particularly those focused on Friday options expirations, are more noise than substance in the grand scheme of TSLA's appreciation, and so the first reaction I have is "I'm not going to be fooled into selling on this bullsugar weakness."

My second reaction is "how can I profit from this price movement?" I suggest there are players who would love to see TSLA dip on Friday so that some big dog investors who still aren't in yet can get a discount. So, with the likely record-breaking 3Q ER only a few trading days away and short-term manipulations to depress the stock price afoot, I'm likely to pick up trading shares on Friday and hold through the ER. Usually I buy my Friday trading shares around 2pm, but I might have to pick them up earlier this Friday if there's competition for the discount shares. OTOH, I'm surprised by the vast quantity of puts in the low 400s, and I will be watching to see the trend before making my move. If successful, I will be wining and dining to celebrate the win. That's a far cry from "whining".

Conditions:
* Dow down 20 (0.07%)
* NASDAQ down 55 (0.47%)
* TSLA 448.88, down 12.42 (2.69%)
* TSLA volume 35.7M shares
* Oil 40.55
* Percent of TSLA selling tagged to shorts: 48%
* IV 79.5%

 

[Papafox]

TSLA chart above

QQQ chart above

Up until 3pm, Friday trading was just about what you'd expect. TSLA had enough of a negative bias to its trading so that the price would close near 450 and make the market makers very happy for yet another week. Alas, macros, particularly the NASDAQ, dipped quickly in the final hour of trading, pulling TSLA closer to 440 for the close. Was such a big dip appropriate for TSLA? Some quick math shows QQQ dipped 1.1% in the final hour while TSLA dipped 2.2%. A 2X multiplier on a quick dip is not so out of the ordinary for TSLA.

What are the implications for trading during the coming week? I bought some TSLA trading shares in early afternoon, thinking that would be the day's low. When the big dip into close came, I doubled down and bought more. Since I use either shares or leaps for my short-term trading, I seldom lose. I simply hold a lower cash position than optimal until TSLA finally recovers. I realize this is too expensive an approach for most investors to realize suitable gains, but after the past year of TSLA gains I'm taking the safer bets and not working nearly so hard on my trades.

Let's look at what could be negative and positive catalysts for macros during the coming week.

Coronavirus Update

The upper chart, the new cases chart in the U.S. shows a noticeable uptick in cases. It's possible that some negative sentiment could develop in the next week if the numbers continue climbing. Apparently the U.S. is behind Europe in the development of a third wave. Diluting some of the concern is a daily deaths chart (bottom) which shows the 2nd wave was not nearly as lethal in the U.S. as the first. One possible explanation could be that the U.S. is doing a better job of protecting our vulnerable population. Another explanation is that treatments have improved. Whatever the case, the deaths of the 2nd wave peaked a couple weeks after the new cases peak. The third wave has been rising for about 3 weeks so far but we haven't seen the uptick in deaths yet. Until the daily deaths chart starts rising, the market may stay relatively calm.

Possible Postive Catalysts this week

Gary Black points out that the Monday of ER week has been very positive in Q1 and Q2 of this year. Should we expect something so positive this Monday for Q3? I would guess that the potential for a positive Monday is indeed there (which is part of the reason I placed a bet on Friday) but a 10% jump strikes me as too much to hope for with TSLA much closer to fairly priced this quarter compared to the two earlier quarters this year.

Stimulus Success?
Expectations are low for a successful stimulus bill this week, so an agreement on a stimulus bill would be a big surprise and a big catalyst. The game that's been ongoing between the two parties so far is akin to a game of pin the tail on the politician, in which one politician is "it" and carries the highest perceived responsibility for the failure to reach a stimulus agreement. Whoever is "it" has the most to lose if no stimulus agreement is reached, and so you will see that side extend an effort (or at least an apparent effort) to offer a solution so that the onus of being the blocker is transferred to a politician in the other party. Don't hold your breath for a solution, but don't count it out entirely, either. Incumbent lawmakers will all look bad going back to their states for reelection if no agreement is reached.

3Q ER
Of course the biggest boost to Tesla during the coming week would be an ER with results that outstrip expectations. That's entirely possible. Fingers crossed.

Looking at the tech chart, over the past two weeks the mid bollinger band has slowly been drifting higher and the stock price is presently between the mid and upper bollinger bands. A surprisingly strong ER could exceed the upper bb but we'd likely see a combination of rising upper bb and moderating stock price could bring the price within the band after two days. If news during the ER is perceived as disappointing, then we have the mid-bollinger band, the blue 50 day moving average, and the lower bollinger band to provide various levels of safety netting beneath us.

TSLA closed on Friday at 439.67, up 5.72 from last Friday's 433.95. Hoping you all had a great weekend. Looking forward to the week ahead.

Conditions:
* Dow up 112.1 (0.39%)
* NASDAQ down 42 (0.36%)
* TSLA 439.67, down 9.21 (2.05%)
* TSLA volume 32.8M shares
* Oil 40.88
* Percent of TSLA selling tagged to shorts: 39%
* IV 77.8

 

[Papafox]

TSLA chart above

QQQ chart above

Up until market open, things were going as planned, with TSLA exceeding 447 and the NASDAQ up nicely, too. Alas, as the realities of the day unfolded and chances for a stimulus bill began to look remote, the market and TSLA faded. TSLA showed more strength than QQQ for most of the day, and multiple whack-a-moles were likely needed to keep enthusiasm from building. Just like on Friday, however, a late day dip pulled both TSLA and the NASDAQ down. Notice that both recovered noticeably during after-hours trading. Let's see if the pattern repeats on Tuesday.

News for Tesla:
* Shanghai will be shipping Model 3s to Europe this quarter
* Wedbush raised its TSLA price target to 500 today

Overall, TSLA continues to execute well. Berlin and Austin continue to move forward at excellent speed. Slowly, the market is adjusting to TSLA's new valuable after the amazing 2019/2020 rally. Don't let the short term noise distract you from the long-term growth ahead.

Looking at the tech chart, TSLA approached the mid bollinger band but remained above. The mid-bb has managed to fend off dips throughout October so far.

If you look at the IV number (which indicates volatility) in the data below, you'll see that over the past few days it has been decreasing. As IV decreases, options become less expensive. Hmmm.

Conditions:
* Dow down 411 (1.44%)
* NASDAQ down 193 (1.65%)
* TSLA 430.83, down 8.84 (2.01%)
* TSLA volume 36.3M shares
* Oil 40.48
* Percent of TSLA selling tagged to shorts: 37%
* IV 74.7

 

[Papafox]

TSLA chart above

QQQ chart above

Although there were casual connections between TSLA and NASDAQ trading today, the similarities were low. We did see QQQ dip in the afternoon (final hour) for the third trading session in a row, and that dip was reflected in TSLA trading, too.

Despite positive macros and positive pre-market trading, TSLA suffered from a successfully executed Mandatory Morning Dip that was capped for hours and ultimately resulted in a 2% drop. For the past three trading sessions (despite significant differences in macro behavior), TSLA has dipped 2.05%, 2.01%, and 2.06% in the past three trading sessions. Coincidence? I think not. Who, then, is doing the pushdowns, and what is their objective? Consider three possibilities:

* Some institutional owner wishes to trim back their TSLA holdings prior to the ER. Sounds reasonable, right? If this was so, however, would they sell like a banshee out of hell at market open and spend the rest of the day selling at significantly lowered prices? I think not.

* Some big dog investors want to get into TSLA before the ER and are manipulating the price down so that they can acquire at the best possible price. If this was so, why is volume so anemic? I suggest we'd see more volume and better price performance if some big dog investor was accumulating.

and finally,
* Market makers and hedge funds who have sold options expiring this Friday are worried about a big pop after the ER and they're pre-sinking the stock price so as to keep it below a desired price point after the price pop, if it happens. Let's look at the maximum pain chart to see if this scenario makes sense...

Excluding the enormous quantity of "sugarputs" at $20, the 1000 lb. gorilla on Friday is that Eifel tower of nearly 15,000 calls with strike 500. Max pain is 440 this evening, and you can see that at 440 and below, you're in Putland, whereas 450 and above is call land. I suggest that a descent to 420 today gives wiggle room for TSLA to run higher $80 on Thursday and Friday before it becomes too threatening to those $500 calls that will expire. Thus, even though 420 is well below max pain of 440, it is a good price on a week when the ER results could send TSLA noticeably higher. I place my bet on scenario #3.

If market makers would indeed pre-sink the stock price in anticipation of a big climb, perhaps there is an example of this happening. Actually, there very well might be. Check out the tech chart below for Q3 2019's ER. TSLA had been climbing nearly nonstop from 230ish to 265ish up until about a week before the Q3 19 ER. Look at what happened, though. We saw a pushdown to 253 by the day of the ER. For grins, look at the effort of the market makers on the day after the Q3 ER to cap at 300. Too bad for them that plan ran amuck the following trading day. Also for grins, check out this headline by Charlie Grant of the Wall Street Journal.

(Grant's thesis was that since Tesla sales are falling, this brief rally after the Q3 19 ER won't have any legs)

The beta rollout of the new Full Self Driving happens tonight. Is this a big deal? Yes! The autopilot team has rewritten the code so that the view from the cameras creates a top-down view of the Tesla's environment and thereby enables far better navigation, especially on tasks such as turning through intersections. Once glowing reports of the FSD capabilities surface, purchases of the FSD option will increase and this will influence revenues and especially profits. Also, the added capabilities of autopilot will allow Tesla in Q4 to move some of the cash brought in on FSD sales over to the income statement and thereby increase Q4 profits.

Looking toward the Q3 20 ER, @The Accountant has just made several posts with updated numbers for the Q3 ER here on TMC. Numbers include:
Record GAAP earnings of $371m ($0.35 EPS- diluted)
Record non-GAAP earnings of $820m ($0.78 EPS- diluted)

Rob Maurer has also put out his Q3 20 ER numbers. He's expecting higher expenses from Elon's awards and so his GAAP profit numbers are less. GAAP Income: $274 ($0.29 EPS), non-GAAP Income: $729 ($0.77 EPS)

The bottom line is that if the numbers come closer to Rob's, there's a chance that by cherry-picking the hostile media could find ways to spin the results as a miss. OTOH, if the numbers are closer to the Accountant's there should be positive media reports following the ER numbers. Fingers crossed.

Looking at the tech chart, you can see the steady 2% dip per day cadence in preparation for the 3Q ER has brought TSLA below the mid-bollinger band. The blue 50 day moving average is at 411 and should be the next support mechanism. Looking at the bottom of the tech chart you can see the volume and such low numbers really do make manipulations easier.

Conditions:
* Dow up 113 (0.40%)
* NASDAQ up 38 (0.33%)
* TSLA 421.94, down 8.89 (2.06%)
* TSLA volume 30.9M shares
* Oil 41.46
* Percent of TSLA selling tagged to shorts: 35%
* IV 74.6

 

[Papafox]

TSLA chart above

QQQ chart above

On Wednesday Tesla's Q3 20 earnings report brought the expected record revenues and profits. Non-GAAP earnings were $874 million with GAAP earnings $331 earnings. These worked out to be $0.76 and $0.27 earnings per share, respectively. Both @The Accountant and Rob Maurer did great jobs predicting profits this quarter. Rob came closer on the GAAP income, which was impacted by two trounces of Elon stock awards coming due in the same quarter. Such a performance was only possible with massive stock price appreciation this year, so don't worry about such hefty adjustments being made in most future quarters. Free cash flow was a massive $1.4 billion.

As we expected, with GAAP income/share in the $0.27 range, Tesla's critics had at least something to sneer at, suggesting that regulatory credits were needed to give TSLA a GAAP profit. That distinction will disappear in Q4, and if the aimed for181K deliveries (to achieve 500K yearly deliveries) do take place, Q4 will be an absolute blockbuster.

My personal reaction was one of satisfaction seeing Tesla continuing to pull away from any competition going forward. Add in Battery Day revelations and the picture crystalizes. Automotive gross margins of 27.7% are fantastic, and the company even achieved 23.5% automotive gross margins on a GAAP-basis (no regulatory credits). Zach pointed out that the gross margin improvements were due to continued efficiency improvements in manufacturing, not due to FSD revenues. We're going to see substantial autopilot revenues in Q4 if the beta release of the new generation of FSD software sees a wide release prior to year end. Add in the substantial growth coming in 2021 and this is a company I strongly wish to remain invested in.

Stepping back and looking at the past several trading sessions, it looks like the recent daily 2% walk-downs by the market makers of the stock price actually achieved their goal (at least so far this week). TSLA is a stock which is hard to price, and I think the manipulators figured we'd see a relative move in the price today rather than a move to some absolute figure. A climb to 437 was about a $15 climb from closing price, but it's still below last week's prices, even though today's ER really was stellar.

I suspect we likely saw mischief in the stock price during today's after-hours trading. Futures are down right now for Thursday, but with macro cooperation I wouldn't assume that TSLA will remain so malleable to the option-sellers' wishes. With Q3's excellent performance and the outlook for substantially stronger Q4 performance, the stock price will start climbing prior to the Q4 P&D report and ER.

After an 800% rise during the 2019/20 rally, TSLA is a stock that many observers expected to take a substantial pull-back at some point, and there are lots of retail and big dog investors who have been waiting for that dip. The problem is that Q3's results were truly excellent and Q4's are going to be substantially better. With low volumes, the option-sellers are currently managing the stock price for their convenience. At some point the waiting on the sidelines and the low volume will give way to buying and price appreciation. Maybe we have to get to the other side of the election uncertainty. At some point, though, it's going to happen. Tick, tick, tick.

Conditions:
* Dow down 98 (0.35%)
* NASDAQ down 32 (0.28%)
* TSLA 422.64, up 0.70 (0.17%)
* TSLA volume 32.4M shares
* Oil 39.78
* Percent of TSLA selling tagged to shorts: 42%
* IV 73.6

 

[Papafox]

TSLA chart above

QQQ chart above

This will be an abbreviated post as today I'm very time constrained.
Does anyone else think it's a bit odd that after Tesla released it's best earnings report of all time the stock is up less than 1% on a positive macro day?

Volume has been low in the last few weeks because current investors for the most part believe in Tesla's long-term future and aren't interested in selling, while buyers have been told that TSLA is a good stock but wait for an inevitable big dip before buying. Thus, the buyers are waiting and investors are not selling, for the most part, which is an invitation for the option sellers to tweek the stock to suit their needs, which is what's happening.

As I stated yesterday, the results from Q4 are likely to be so much improved from anything we've ever seen before with TSLA that in time the stock will go up. For now, responding to the macros and enduring Friday option expirations manipulations is the temporary norm.

Looking at the tech chart since TSLA popped above 500 in early September, you can see two dips but for the past month we've experienced gyrations within the low to mid 400s. This is not a bad thing because after an 800% rally, it'll take time for the market to grow comfortable with the new reality and stop saying "wait for the dip before buying". Tesla's Q3 results and the prospects of a stunning Q4 should result in more price target upgrades and pave the way for additional appreciation.

Notice in the Conditions below how IV has fallen noticeably, after the ER. This is normal behavior for IV as the implied volatility is now lower since big moves one direction or another are far less likely than on ER day. Options will be less expensive with the lower IV.

Conditions:
* Dow up 153(0.54%)
* NASDAQ up 21 (0.19%)
* TSLA 425.79, up 3.15 (0.75%)
* TSLA volume 40.0M shares
* Oil 40.44
* Percent of TSLA selling tagged to shorts: 42%
* IV 62.0

 

[Papafox]

TSLA chart above

QQQ chart above

With only 33 million shares trading on Friday, the situation of the past two week continues. Current TSLA investors don't want to sell and not many new investors want in at the moment. TSLA is a volatile stock, so perhaps future investors sitting on the fence are waiting for the uncertainties of the election to pass before jumping in. As many have said before me, TSLA should do well long term no matter who the next POTUS is.

Looking at TSLA's Friday chart, you can see that the stock took a dip of over 4% about an hour after open in a well-executed Mandatory Morning Dip on options expiration Friday. The stock recovered for the remainder of the day, but still closed down. In contrast, QQQ never dipped more than 1% on Friday and closed in the green. Same old Friday shenanigans.

Big news of the week was the release of Full Self Driving Beta. If you haven't been checking out the videos on Twitter, please do so. This is a big deal in terms of value of this company in the coming years. By now you know the drill: Q3 ER was strong and solid, FSD beta release shows the technology is maturing quickly and will become real. Stock price goes nowhere. It's just a matter of time for the right catalyst to come along to send the stock price upward again, as long as Tesla's progress continues this strongly. During weeks like this, you need to take the view of @StealthP3D , Dave Lee on investing, and Chamath Palihapitia that the way to riches is to choose the right companies and give them time to generate the returns you understand are possible. Don't sweat the bumps in the road.

Coronavirus Update
Europe continues to see increasing numbers of new cases as the colder weather brings about enhanced conditions for the transmission of flu, and the United States is experiencing the same trend now, as seen below. The third wave new cases numbers are elevated enough to possibly affect the market this week. HODL continues to be my strategy of choice.

The flip side of the coronavirus situation is that U.S. is doing a much better job at keeping deaths down than during the first two waves. Deaths lag new cases by a couple weeks, though. Positive news on FDA offering emergency authority for therapeutics or vaccines would of course send the market higher. My guess is that we won't see any breakthroughs with FDA approvals before the elections, due to efforts to avoid any political fallout from such a move. Personally, I think the FDA needs to be more focused on saving lives by making effective therapeutics available when the risk vs. benefit clearly favors benefit, and less focused on covering its ass. Keep a high standard for vaccine approvals, but therapeutics need to be made available ASAP. Ditto for inexpensive self-tests (as long as limitations are clearly stated). My question to the FDA would be simple, "If Regeneron is safe enough for the POTUS to take, why are you preventing the rest of us from being allowed to take it if we are in a risk category and diagnosed with COVID 19?"

A more likely market catalyst this week would be a deal on the stimulus package.

Looking at the tech chart, you can see that Friday's dip stopped short of the lower bollinger band and (as so often happens) closed above the 50 day moving average. Notice the upper and lower bollinger bands squeezing in as TSLA trades within a relatively narrow range. Remember that such low volatility is quite profitable for the option sellers when people are still willing to buy options well out of the money.

For the week, TSLA closed at 420.63, down 19.04 from last Friday's 439.67. In terms of Tesla's progress, it was an incredible week, with the greatest Earnings Report results (by far) of all time and the Beta release of Full Self Driving. Hoping you had a great weekend.

Conditions:
* Dow down 28 (0.10%)
* NASDAQ up 42 (0.37%)
* TSLA 420.63, down 5.16 (1.21%)
* TSLA volume 33.7M shares
* Oil 39.26
* Percent of TSLA selling tagged to shorts: 39%
* IV 58.8

 

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TSLA chart above

Monday was yet another amazingly low volume day, with only 28M shares traded. Unlike Friday, however, TSLA showed substantially more strength on Monday than the macros. TSLA closed near even while the NASDAQ closed down 1.64%. I suspect a good part of the relative strength of Tesla's was due to the release of the 10Q Monday morning. Take a look at how well TSLA climbed from the pre-market lows up into the green in early morning trading. Around 11am efforts were made to suppress the climb. You can tell that manipulations were involved by the twin deep icicles that appeared as efforts to sink TSLA were bought up by investors.

QQQ chart above

Looking at the Max pain chart (max pain was at 420 on Monday evening), you can see that from 425 and down, the Puts solidly overwhelm the calls, but from 430 and above, Calls rule. Is it surprising that TSLA has closed around 420 for our past two sessions? I think not, as market makers are enjoying a lucrative series of weeks with low volume and ease in manipulations which keeps TSLA closing on Fridays very near to the ideal number.

Tesla's 10Q is out and Rob Maurer has done a fine job highlighting the most important parts of the report.
Tesla 10-Q Shows Capital Expenditure Plans, Musk Compensation Details

Meanwhile, Gene Munster had these positive comments regarding the 10Q

All in all, Tesla continues to execute well. The Full Self Driving videos appearing on Twitter continue to amaze those of us who are familiar with the old versions of the software. Here's a video in a Tweet by Kim Paquette that shows a super-difficult challenge that was handled well by FSD Beta.

We're seeing substantial improvements in Tesla's products that will impact the bottom line in due course. Those of us with Teslas who can understand the magnitude of the advances will have an investing advantage over most other investors in the long term.

Looking at the tech chart, TSLA really repeated Friday's trade, descending close to the lower bollinger band during intraday trading and yet managing to close just above the 50 day moving average. With positive macros, I wouldn't be surprised to see TSLA climb above the mid-bollinger band this week but perhaps be pushed to the max pain number for Friday's close. At some point, the good news that keeps coming from Tesla will drive the stock price higher. I'm loaded up for that day but don't wish to guess the timing, given the low volume, the successful manipulations to max pain we've been seeing, and the volatility of macros.

Conditions:
* Dow down 650 (2.29%)
* NASDAQ down 189 (1.64%)
* TSLA 420.28, down 0.35 (0.08%)
* TSLA volume 27.9M shares
* Oil 38.86
* Percent of TSLA selling tagged to shorts: 38%
* IV 60.6

 

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TSLA chart above

QQQ chart above

Tuesday was one of the lowest volume days for TSLA in a year, at only 22.9 million shares traded. The day's closing price was very near the 425 sweet spot that I think market makers would like to see on Friday's close. In my mind, it's a HODL week. Should you be selling options with this much manipulated stability underway? The problem with that approach is that there's always a catalyst waiting out there to be uncovered. IV is low so premiums to option sellers are low at the moment. If the S&P 499 committee suddenly announced that Tesla would be added to the index, any sold calls could bite the seller hard.

Waiting patiently for the elections to conclude and one candidate clearly prevail so that we can see the buyers return. In the meantime, low volumes mean lots of ability for the hedge funds and market makers to steer TSLA's price.

Looking at the tech chart, the closing price for the past three sessions has been staying just above the rising 50 day moving average. Notice at the bottom of the chart how low 22 million shares volume is compared with the already-low October volumes.

Conditions:
* Dow down 222 (0.80%)
* NASDAQ up 72 (0.64%)
* TSLA 424.68, up 4.40 (1.05%)
* TSLA volume 22.9M shares
* Oil 38.69
* Percent of TSLA selling tagged to shorts: 35%
* IV 58.0

 

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TSLA chart above

QQQ chart above

Long story short: Macros were way down today on coronavirus fears (no big surprise, other than the timing). With the NASDAQ down 3.73%, TSLA closed down 4.39%, for a multiple of 1.2X. Considering that Apple was down nearly 4% and NVIDIA down nearly 6%, TSLA's price behavior was pretty typical for a tech-like stock today.

Nonetheless, you can see some anomalies in TSLA's trading. The sharp icicle at 10am is way out of synch with QQQ and suggests an effort to artificially sink TSLA's stock price. Remember that not all hedge funds and market makers have the same exposure to options expiring on Friday. Some hedge funds may benefit from a noticeably lower than max pain close, and so you may see some efforts that are then cancelled out by other players. Notice after Tesla's 10am dip the stock was in recovery mode until nearly noon while QQQ was mostly descending during this time.

* Good news keeps coming forward. We've seen how the efficiency of Model 3 has continued to improve each year, with sizeable improvements for the current 2021 model. Here's an Electrek article that compares Tesla vehicle efficiency to the competition. Is the competition catching Tesla? It looks like Tesla is widening its lead.
* In the main investor forum, @JBRR posted a headline showing FCA is in a multi-year agreement with Tesla for carbon credit fee reductions. Looks like Tesla has more years of payments to come from FCA

Coronavirus
A recently completed trial of outpatients using Regeneron therapeutic suggests safety and a great ability to reduce viral load. Medical advances such as this are what will change the course of this winter's wave if regulatory bodies grant emergency authority for such therapeutics to be given as we await a vaccine.

Looking at the tech chart, you really couldn't expect the 50 day moving average to hold up TSLA during today's deep macro dip. Sugar happens. Fortunately, our friend the lower bollinger band was waiting in the wings to assist in providing a bottom for the day's stock price. Notice the incredibly small 24.8M volume for Wednesday. Investors are riding out the bumps of elections plus coronavirus while buyers remain on the sidelines, for the most part, waiting for the sky to clear.

Conditions:
* Dow down 943 (3.43%)
* NASDAQ down 426 (3.73%)
* TSLA 406.02, (4.39%)
* TSLA volume 24.8M shares
* Oil 37.43
* Percent of TSLA selling tagged to shorts: 38%
* IV 61.4

 

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TSLA chart above

QQQ chart above

The broader markets recovered some of Wednesday's losses with a nice rally today. U.S. GDP grew over 7% in Q3, which works out to be a 33% annual growth rate. That news prompted the rally. Unfortunately, with less than 22 million shares of TSLA traded during market hours, the stock was a prime candidate for manipulations. Looking at the TSLA chart above, you can see
that up until 11:34am in late morning trading, TSLA was outperforming QQQ. A small dip in the NASDAQ was just the excuse certain hedge funds needed and my guess is they began short-selling in order to walk the stock price down in a profitable enterprise in and of itself (sell high, buy lower). Sometimes, when the TSLA stock price is being walked down and capped and the NASDAQ continues to rise, we see TSLA break free of the cap and rise too, but with the remarkably low volume we've been seeing these past few weeks, such a break upwards by TSLA is controllable, and we even saw a walk-down in the final half hour of trading.

Looking at the max pain chart (shows 417 as TSLA max pain for Friday), everything 420 and below is dominated by puts and above that number is solid calls. Keep in mind, though, that not all players have the same exposures to the same sold options, and thus you can see some efforts to pull TSLA below the max pain number for Friday.

The good news is that there's an election next week and the potential buyers sitting on the sidelines are much more likely to jump back into the market once a winner is declared. The election also removes the political consequences of the FDA approving a therapeutic right before the election (and exerting some influence over it) and so the election clears the way for the FDA to (hopefully) do the right thing and give the country a new weapon in dealing with the coronavirus as we await a vaccine announcement.

Coronavirus Update
On Thursday, the U.S. reported over 88,000 new cases of the virus, a new record. I reproduce the chart below. Notice, however, that the deaths from COVID 19 have been much more controlled since the first wave.

Let's also look at Germany to get a feel for what is happening in Europe. Though the U.S. is on its third wave, Europe is just entering its second wave. You can see the very substantial upward slope, and multiple countries in Europe (including France) have announced lockdowns. As for deaths (which lag new cases by a couple weeks), Germany, like the U.S., is doing much better this time around.

For the sake of the world's citizens, I sincerely hope that any safe and effective therapeutics will be given emergency approval in the U.S. shortly after the election and that the best products can be licensed for broadest availability. If there's a delay in the vaccines, effective therapies should be made available asap to the largest number of people. Considering the large number of COVID 19 vaccines in development and the multiple vaccines in 3rd State testing, at some point this winter we will see an approval, which will spark a relief rally.

Big news in after hours trading is that Alphabet (Google) was up 7% in after-hours trading but both Apple and Amazon were trading lower on the results of their 3Q earnings reports. Between the COVID 19 news and weaker than expected results by some companies on Q3 earnings reports, futures are down substantially Thursday night. Snug up that seatbelt for the ride on Friday.

TSLA's climb was hampered today by low volume and therefore easy manipulations. Friday's trading may become a test for the lower bollinger band's strength as support.

Conditions:
* Dow up 139 (0.52%)
* NASDAQ up 181 (1.64%)
* TSLA 410.83, up 4.81 (1.18%)
* TSLA volume 21.9M shares
* Oil 36.30
* Percent of TSLA selling tagged to shorts: 40%
* IV 60.1

 

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TSLA chart above

QQQ chart above

In Thursday after-hours trading, a few important tech companies announced their 3Q Earnings Reports. One of them, Apple, shied away from offering guidance going forward (Covid) and disappointed enough so that the stock price dipped 5.6% Friday. What's fascinating is that TSLA dipped a similar amount on no news. I'm the first to call out manipulations, and with short percentage of selling up to 43% on Friday, more than 800,000 shares traded in the 4:00pm final minute, and no last minute rally of TSLA compared to QQQ, I'll state that manipulations were part of the reason for TSLA's big dip on Friday. I think another reason is simply that TSLA is way up for the year and some investors simply are nervous about what's going to happen to the market during election week, particularly since TSLA is such a volatile stock. TSLA volume grew to 42M on Friday, still low volume but higher than the norm these past couple of weeks.

Another contributing factor to Friday's macro dip was a number of European countries announcing lockdowns for November. The negative is that the global economy will experience a decline in November. For TSLA investors, the good news is that the lockdowns are in November and they will likely be far less detrimental than lockdowns in December. Hopefully the lockdowns can tame the COVID 19 new case rises we're seeing in Europe and the U.S. If some relaxation of the lockdowns are possible come December, then European deliveries of Tesla vehicles may be unaffected. Let's keep an eye on arrivals of vehicles at the Zeeburg port this November. If all goes well there, Tesla should come out of the lockdowns in good shape.

Can we expect a victor to be announced in the U.S. presidential race on Tuesday night? Such a situation would be met with a sigh of relief by the market, but with polls narrowing and many key states accepting mail-in ballots for days afterwards, it's entirely possible that the pain will be drawn out for additional days. There will be a satisfactory solution to the election, however, and the bounce-back from the worry will follow. We've ridden in this turbulent Tesla rodeo many times before, and as long as you don't get bucked off (sell low out of fear) the stock price recovers as long as Tesla is still growing quickly and selling everything it makes.

If you have dry powder to deploy, timing is critical. On the one hand, it's easy to see the current prices and assume it won't go much lower, only to be disappointed. On the other hand, once positive news propels the market higher, TSLA's recovery could be very swift. Remember that many big dog investors have been waiting for a dip to buy, and they're finally getting one. Some investors have reduced their holdings prior to election week, hoping to rebuy at a lower price. New buyers are waiting in the wings. Volumes the past three weeks have been unusually low as investors are unwilling to part with their shares. This tendency, when the stock starts climbing again, suggests investors will still be unwilling to sell without enough incentive, and so a quick climb is more likely once the storm clouds clear.

Since the stock price can gap up substantially on a good news day, spreading out your buying might be the best policy. The rest of us who are primarily HODL will do fine in the long run, too.

News for Tesla continues to be good with an excellent Q4 likely ahead.
* CFRA research has upgraded TSLA from buy to strong buy with a $550 12 month price target

Shorts were tagged with 43% of TSLA selling on Friday, a break upwards from the recent 38% norm

Looking at the tech chart, Friday's big dip brought TSLA below the lower bollinger band. It recovered somewhat in the afternoon, but not enough to reach the band.

TSLA closed at 388.04 on Friday, down 32.59 from 420.63 last Friday. Hoping you had a good weekend. Once this election is settled, better days lay ahead.

Conditions:
* Dow down 158 (0.59%)
* NASDAQ down 274 (2.45%)
* TSLA 388.04, down 22.79 (5.55%)
* TSLA volume 42.6M shares
* Oil 35.72
* Percent of TSLA selling tagged to shorts: 43%
* IV 65.1

 

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TSLA chart above

NASDAQ chart above

On Monday we saw the other side of the coin... what happens when macros start heading higher. Twenty-three minutes after market open TSLA was up 4.7% while QQQ was up only 1.3%. That's a multiplier of about 3.6X. Thus, the low volume of recent trading sessions makes TSLA vulnerable to oversized pushdowns when the market gets fretful, but when the going gets good, FOMO buying sets in and TSLA still has the capability to climb dramatically.

Unfortunately for TSLA, volume was light (29M shares) on Monday, and some big hedge fund could easily have been behind the rather quick reduction of the morning climb. Fear not, when the uncertainty of the elections and the COVID situation subsides and the market gets frisky again, volume of TSLA trading will return and the shenanigans we've seen in recent weeks will be overruled by market forces.

With TSLA demonstrating its ability to fly the trading day after its big dip, I wouldn't want to be a buyer or seller of short term options this week. Anything is still possible.

Looking at Ihor Dusaniwsky's latest chart, you can see that since mid-October TSLA has seen an increase in short interest. This increase corresponds with TSLA's dip from the 450ish price range. My guess is that once the market finds its sea legs after the election and TSLA gains altitude, the negative effect of increasing short interest will give way to the tailwind (for us longs) of decreasing short interest. Also, note the truly massive losses of the shorts so far in 2020: 25.4 billion dollars. This is an epic loss for the shorts and one not likely to be repeated elsewhere anytime soon.

When short term trading turns unpredictable, I like to focus on long term investing. Two very important developments should be noted:
* This Electrek article tells how Honda has just partnered with Tesla for a pooling of sales in Europe for the purpose of reducing Honda's emission fines. This agreement is on top of the FCA agreement and suggests that revenues from such pooling will only increase in the near future. We get a picture of improving sales of Teslas produced by the Berlin factory next year will be more affordable (without present import tarrifs), will sell better, and will enable more revenues from emissions partnering. It's all good.

* @The Accountant has put together a preliminary estimate of Q4 financials in the Near-future quarterly financial projections thread. With non-GAAP profits exceeding a billion dollars in the quarter, Wall Street is going to take notice, even with a conservative deliveries number of 170,000 vehicles. I reproduce his chart below for easy reference. With all the craziness of election week, considering the upcoming quarter's strength will give you needed perspective to understand where this company is going.

Looking at the tech chart, TSLA at one point today nearly regained all of Friday's losses. Nonetheless, the stock has bounced back above the lower bollinger band after only a single day below.

Conditions:
* Dow up 423 (1.60%)
* NASDAQ up 46 (0.42%)
* TSLA 400.51, up 12.47 (3.21%)
* TSLA volume 29.0M shares
* Oil 36.91
* Percent of TSLA selling tagged to shorts: 41%
* IV 65.1

 

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TSLA chart above

QQQ chart above

Give me an "F"!
Give me an "O"!
Give me an "M"!
Give me another "O"!
What's that spell? FOMO, what's that spell? FOMO, what's that spell? FOMO!
Welcome back to the crazy election week where TSLA gets manipulated down on light volume on some days and then climbs like a Falcon 9 the next day. I continue to believe that a large number of investors want in on TSLA and that the lead-in to the elections was going to be their best chance to buy this stock at a discount before it started running higher in preparations for Q4 results early in 2021. Alas, with macros up about 2% today TSLA didn't disappoint and closed up 6% after hours.

I think what we saw today is a prelude to post election results, if a suitably convincing presidential win can be awarded to either of the candidates. The market is ready to get this uncertainty behind it and move on. If the results are ambiguous, however, and neither side concedes, then the market will of course have a bad day or days. Fingers crossed for a clear winner.

Sooner or later, however, a winner will be decided upon, and TSLA has shown such a propensity to climb with good macros that in good time we will counteract any short term effects and move higher. I don't want to be on the sidelines, wishing I was in when the election uncertainty is finally removed.

What's interesting about TSLA is its relatively level trading compared to QQQ. On the one hand, you could say that someone was capping TSLA today (which might be possible, given the low volume), but I think a better explanation is that once TSLA reached 420, it had achieved one of its "happy places" where it has tended to proceed in the past couple of months when things are uncertain. I actually expected it to top out around 420 but it drifted another $4 higher, possibly because of the tractor beam exerted by the 50 day moving average and the mid-bollinger band.

Looking at the tech chart, you have to love where TSLA ended the day: slightly above the 50 day moving average and slightly below the mid bollinger band. Coincidence? I think not.

Conditions:
* Dow up 555 (2.06%)
* NASDAQ up 203 (1.85%)
* TSLA 423.90, up 23.39 (5.84%)
* TSLA volume 33.7M shares
* Oil 38.32
* Percent of TSLA selling tagged to shorts: 39%
* IV 63.6

 

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TSLA chart above

QQQ chart above

Macros soared on Wednesday, happy with a likely Biden win for president and likely Republican maintaining of a slim majority in the Senate. Wall Street likes a split Washington because neither party will be able to institute radical change. For example, the tax raises that Biden talked about probably wouldn't make it through the Senate, and Wall Street is fine with such an arrangement.

As for Tesla, a Biden presidency and a Republican dominated Senate might be a particularly attractive combination. Biden very well could get the cap on EV incentives removed so that both GM and Tesla buyers could once again qualify for the $7500 tax credit. All that's needed is for GOP senators to tag the EV bill onto a reasonably small bill they want so that Biden will sign. It's called politics. OTOH, a multi-trillion dollar green new economy likely won't be in the works. Massive expansion of EV charging stations would of course encourage more EVs, but Tesla would lose some competitive advantage in such a scenario. Enough emphasis will likely be placed on clean energy that Tesla should be able to sell all its products for quite some time, and slowing the growth of taxes (by Republican Senate) could help the overall economy.

Neither presidential candidate has hit 270 electoral votes yet. I suspect that situation will change at noon Eastern time on Thursday as Nevada updates its vote count. Apparently the uncounted ballots are from Clark County (home of Las Vegas), which is Nevada's strongest Democratic county. Nevada's 6 electoral votes should give Biden the needed 270. Meanwhile, Trump is challenging results, especially in Wisconsin, and a recount there is inevitable. Despite the lengthened time frame until a clean win, Wall Street will start to assume a Biden win is inevitable. My guess is that we'd need to see the outcome seriously threatened before Wall Street would shudder.

The big question on Wednesday evening is why did TSLA perform so far below the macros? I really enjoy watching smart observers try to explain the results without any thought of manipulations. Rob Maurer, whom I greatly respect, tried to do so today on this site. He suggests that Democrats failing to win a majority in the Senate was the reason why Tesla's investors were not buying today, but I suggest the answer is quite a bit simpler: just take a look at the max pain chart below. TSLA is a volatile stock that is trading at low, low volumes in recent weeks, making it vulnerable for manipulations. The stock has such a high percentage of options associated with it, compared to other stocks, that once the stock price starts moving in one direction, delta-hedging by option sellers creates further momentum for the stock price to keep moving in that direction. With a ton of call options sitting out there with 450-strike prices and expiring on Friday, the market makers and hedge funds had an incentive to keep TSLA from running higher with the macros.

Why was the game of whack the mole played out on Wednesday and not on Tuesday? I think the answer is ambiguity in the election results (neither presidential candidate had yet hit 270) and the manipulators used this ambiguity in the election results to justify TSLA's erratic behavior.

Look at the Tesla chart and you'll see a suitable level of price increase in pre-market trading, followed by the common pushdown right before open, followed by an also-common climb right after open, followed by a quick mandatory morning dip designed as trader-repellent. If that MMD had been quickly dispatched and TSLA resumed a brisk climb, that would likely be the end of a successful manipulation, but the pirates squelched TSLA's climb quickly once it reached the green and the rest of the day was spent in a game of whack the mole. Notice that TSLA didn't want to descend much below the friendly price of 420 and kept popping back up above 420.

Manipulators using short-selling as a tool in keeping TSLA underperforming the macros would leave some type of fingerprints, wouldn't it? Behold 1.3 million shares traded during the 4:00pm minute as a means of covering the day-shorting.

Looking at the max pain chart, options with 415-strike and above are dominated by calls while below 415 puts rule. Thus, market makers and hedge funds have a serious incentive to try and keep TSLA below 420 for Friday's close. Puts at 415 almost equal the calls, so there's minimal incentive for a push much below 420.

TSLA's extended game of whack the mole allowed the stock to rise above the 50 day moving average and mid bollinger band many times but the close was a mere 98 cents above Tesla's happy price of $420.

Conditions:
* Dow up 368 (1.34%)
* NASDAQ up 430 (3.85%)
* TSLA 420.98, down 2.92 (0.69%)
* TSLA volume 32.1M shares
* Oil 38.41
* Percent of TSLA selling tagged to shorts: 41%
* IV 58.5

 

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TSLA chart above

QQQ chart above

The biggest story in Thursday's TSLA trading was not so much what happened as what didn't happen. We saw the NASDAQ running higher today and TSLA trading at nearly a 2X multiplier at times. Nothing too earthshaking there. The pushdown just before market open is now typical, as is the mandatory morning dip shortly after open. With the MMD so anemic today, TSLA responded with a serious rally and peaked 34 minutes after open. Then came the profitable walkdown of that rally, which is also typical.

What wasn't expected today was TSLA's strength in the afternoon hours, more than mirroring a slow climb of QQQ. Normally on a Thursday afternoon you will see the pushdown continue to nearly market close, but it didn't happen today. Hmm. With these low volumes, you would expect the market makers and hedge funds to push the stock price down to about 420 on Friday's close. It could still happen if macros show some weakness. We live in interesting times.

In terms of election violence, we had some of the usual suspects creating trouble in New York City and Portland, but the market has been happily surprised so far. My guess is that the Trump court cases that will challenge results in certain states will take weeks, at least, and the slow process of challenging the election results will allow for tensions to slowly diffuse.

The previous report of Nevada making a major update to vote results at 9am on Thursday turned out to be much ado about nothing. Nearly 200,000 ballots remain to be counted in the state.

News:
* Electrek reports that truck leasing company Pride Group has placed an order for 150 Tesla Semi-trucks and has options for 500 more. This is the largest order yet for the semi-truck.

Looking at the tech chart, the volume remains unusually low but TSLA has returned to its perch between the mid and upper bollinger bands.

Conditions:
* Dow up 543 (1.95%)
* NASDAQ up 300 (2.59%)
* TSLA 438.09, up 17.11 (4.06%)
* TSLA volume 27.6M shares
* Oil 38.13
* Percent of TSLA selling tagged to shorts: 39%
* IV 57.5