Papafox's Daily TSLA Trading Charts

[Papafox]

TSLA chart above

QQQ chart above

Please excuse the brevity of this post, I'm fighting some food poisoning and it's no picnic. Was unable to review all TMC posts today.

Notice how QQQ resulted in climbs and dips that were somewhat consistent with TSLA's. I think TSLA was actually impacting the broader market as analysts and the media digested the earnings call.

Tesla's 4Q ER results were termed as a beat by the media, but the market at times had difficulty at times translating the results. I think the key issue was $700 million of one-time charges that affected the earnings per share. Given that they were one time events, and given that Elon's 2018 awards are now pretty much completed, 2022 should be a very profitable year. Q1 ought to be stronger (though margins could be affected by Berlin and Texas GFs openings.
High points:
* Tesla guided for "comfortably above 50%" growth in 2022 and Zach even said that Tesla could expand 50% in 2022 with Fremont and Shanghai alone
* Austin will be producing Model Y with 4680 cells and a structural battery pack. Translations? 4680 cells are becoming real now and Austin Model Ys should be better and less expensive than those produced elsewhere.
* Elon showed strong conviction about FSD coming to fruition this year. Analysts likely will continue to downplay such announcements until the finished product is approved and released
* Elon surprised many by stating that the Teslabot is a high priority and that we could see working versions this year

Overall, Q4's ER was solid and points to a very profitable 2022, but because of one-time charges it wasn't the blowout that could turn the market around.

After the fed spoke, the market anticipated a 0.25% increase in short term rates as inevitable in the next month and a half to two months. Thus you see the yields on 10 yr. treasury bonds responding immediately.

Max pain is currently 1000 and with that noticeable increase of calls over puts at that strike you can see why. Other big spikes in calls happen at 1050 and 1100, so you can expect that market makers to try closing on Friday below the nearest big call moun

TSLA was finally above the lower bollinger band on Wednesday

Conditions:
* Dow down 130 (0.38%)
* NASDAQ up 3 (0.02%)
* SPY down 1 (0.25%)
* TSLA 937.41, up 19.01 (2.07%)
* TSLA volume 32.2M shares
* Oil 87.24
* IV 81.5, 100%
* Max Pain 1000
* Percent of TSLA selling tagged to shorts: 47%

 

[Papafox]

TSLA chart above

QQQ chart above

Health report: I'm fully over the food poisoning but now suffering fatigue after catching up on two full days of TMC main investor thread posts.

As mentioned on Wednesday, the Earnings Report contained $700 million of one-time charges which turned the report from a "shock and awe" experience many of us were hoping for into a decent but not amazing beat. The conference call let us Tesla battle-tested investors who understood the technology know that things were heading in the right direction. Below, I quote @Sancho from this post in the main TMC investor's thread:

1. We plan on making greater than 50% more cars this year.
2. We don’t anticipate any supply issues (batteries or chips) preventing us from achieving that
3. We can keep the sticker price where it is and sell every car we make this year
4. Our margins will continue to improve throughout the year.
5. This will be a big year for our energy business too.
6. FSD is the biggest free option attached to a share of stock in the history of the world. A significant piece of that value may get unlocked this year.
Bullish AF. Everything else is noise.

Unfortunately, much of Wall Street doesn't understand Tesla well enough to appreciate the nuances. These people need to be spoken to in a different language. Gary Black did a good job of showing Dave Lee how Wall Street would have viewed the Q4 Conference Call in this video of Dave Lee's. Highly recommended. In a nutshell, here's what Gary was saying:
* Wall Street PMs (portfolio managers) are looking for numbers to insert into spreadsheets. When Elon said no $25,000 car for foreseeable future, some PMs will remove the expected income from that vehicle in their 2024 or 2025 income computations.
* Gary was ok with his 2022 calculations for TSLA profits, but he could see where some PMs would have difficulties figuring out 2023, 24 and 25 profits.
* PMs don't have numbers to pop into a spreadsheet for Robotaxis or Tesla Robots. Full Self Driving and Tesla Robots are not worthy of consideration on a spreadsheet in the minds of most PMs. When Elon responded to Toni Sacconaghi about how Tesla will hit 3 million vehicles in 2024, Elon responded with talk about how FSD will make existing vehicles 5 times more useful. He should have instead included that demand for current models is so strong that Tesla could reach this level with just these models plus a small number of cybertrucks. Too bad Elon didn't have @The Accountant on the call, because in this post he had worked out the numbers and they don't include a $25,000 Tesla.

Gary Black has retained his $1600 price target for TSLA. In this note, Adam Jonas of Morgan Stanley is maintaining his $1300 target after the Earnings Report, as well. It's the PMs who don't understand Tesla who get worried when they can't drop numbers in their spreadsheets that yield positive results.

Emmet Peppers puts it simply here and Elon agrees:

If we only had a time machine for doing the conference call a second time.

Keep in mind that we saw slight of hand in the Microsoft earnings report when their beat was followed by an immediate 5% drop. Fortunately, that dip got unwound during the conference call, but with investors filled with fear wondering what the Fed is going to do next with interest rate hikes, nefarious actors are going to try taking advantage of that fear. Manipulations are much easier in this environment.

And so trading began on Thursday. TSLA was up in pre-market trading, as it had been following the ER (once viewers realized there were one-time charges involved) and shortly after market open TSLA started to plunge (even though QQQ was way up). Remember that we had forces betting strongly for and against this ER in the options which close Friday. I suspect a hedge fund was hitting TSLA hard with short-selling to start the ball rolling downhill. A good bear attack should include FUD to explain why the stock price is dropping. Reuters addressed that hedge fund's needs (Reuters has a track record of "timely" negative article on Tesla). When I awoke I looked at TSLA's trading on my phone and then the first news item to catch my attention under Tesla was The Reuters article Tesla sinks after supply chain warning, hitting other EV makers. It is classic FUD in that it is technically not a lie but it gives an impression which is opposite from reality. Somehow Zach and Elon's comments that Tesla would "comfortably" exceed 50% growth in 2022 got left out of the Reuters article. CNBC then joined in with the usual negativity. The 10% drop threshold was exceeded, the SEC circuit breaker popped, and the alternate uptick rule for short-selling came into effect for the rest of the day and for Friday.

With over 48 million shares trading hands, the shorting can only go so far. What it did was to create a false market sentiment that the earnings report was actually bad and get non-believer portfolio managers and weak longs selling so as to reinforce the dip. When TSLA would hit a point of support, the shorting could be used to bust through the support.

I bought a DITM leap call option near close. I realize that TSLA can keep dropping as the macros keep dropping, but now that quality tech companies such as NVIDIA are on sale (27% off for NVIDIA), at some point investors go shopping for bargains and the dip bottoms out.

Resources:
* @MABMAB posted a transcript of the 4Q Earnings Call in this TMC post

The big spike in 10 yr. treasury yields Wednesday afternoon settled down from 1.85ish% to 1.8ish% at close on Thursday

Max pain on Thursday morning was 1000. I don't expect the stock price to go there, but looking at the put and call mountains in the chart above, you can see that 850 and 900 are major put mountains without hardly a call in sight. Thus it makes sense for the market makers to encourage TSLA to close at least a penny above 900 if the market starts the stock price heading in that direction. OTOH, someone put on one massive bear raid Thursday and really wants a low close. Friday's trading could be hedge fund against market makers.

It's a shame the dip is covering up the volume bar, which would be at 48.3M shares, a really high volume day. We've descended below the trading range of the previous 3 months and are close to the takeoff point for the October steep rally.

Conditions:
* Dow down 7 (0.02%)
* NASDAQ down 189 (1.40%)
* SPY down 2 (0.49%)
* TSLA 829.10, down 108.31 (11.55%)
* TSLA volume 48.3M shares
* Oil 87.33
* IV 74.5, 94%
* Max Pain 1000
* Percent of TSLA selling tagged to shorts: 47%

 

[Papafox]

TSLA chart above

QQQ chart above

Mercy, someone was working TSLA's stock on Friday, trying to keep the stock as low as possible. Since I thought a close about 900 would be a signal the market makers were getting involved in the push, and since TSLA headed in the opposite direction for much of the day, I believe the bad actors would be hedge funds and other shorts who were betting big for a dip on Q4 ER week. Miraculously, they pulled it off.

Let's start with the huge dip and resulting waterspout that you see descending from the trading clouds shortly after TSLA opened. Someone wanted to harvest the stop loss protections that unwary investors had set at 800, and they succeeded. Every year of so some bad actors will engineer an especially deep dip of TSLA to weed out any retail investors and portfolio managers who haven't ridden in this rodeo before. Friday was this past year's most exciting big dip. Fortunately, once the stock price recovers and other investors see the results, that technique can't be used for a while until a new batch of investors becomes vulnerable to the same trick.

TSLA recovered and climbed Friday morning to nearly 3.5% above the previous close. In contrast, QQQ climbed to about 2% above the previous close. While QQQ was mostly holding its own from 12:30pm until 2:00pm, TSLA began a gradual descent that coincided with reduced volumes (and thus was more likely a result of manipulations). QQQ took a dip starting at 2pm (Hmm, aren't these even numbers interesting) and bottomed out at 2:30pm. By then, TSLA was well in the red while QQQ recovered well in the green. From the 2:30pm low to close, QQQ climbed strongly and mostly steadily. In contrast, TSLA tried to climb with QQQ but was beaten down in a game of whack-the-mole from 3pm to 3:40pm. Finally, with the macros climbing so strongly, TSLA was able to break free of the whack-a-mole and ended up about 2% (to the NASDAQ's 2.5%).

One trend we see time and again is TSLA outperforming QQQ and the NASDAQ during the morning hours and then closing lower. My friends, it's all about manipulators preferring to do their pushdowns in the afternoon so as to minimize bounces and exert more influence due to the lower volumes of afternoon trading.

Let me say it again for the twentieth time: please do not be lured into short-term wagers. This isn't an honest casino we're playing in and the more money that bets in a particular week, the more likely we are to see massive efforts to take those bets through dishonest dealings. Sometimes we see TSLA head uphill for weeks on end during a massive rally which the bad actors can't seem to control (but we've also seen massive interventions by the market makers during at least one of these massive rallies), so again I repeat my warning. Investing with a long time horizon (years) has shown itself to be a much more reliable method for building wealth.

Friday's macros revealed a glimmer of hope that buyers are shopping for bargains after this big macro pushdown, and a bottom for the macro meltdown may be already in. Fingers crossed. Of course Ukraine hostilities could disrupt the trend.

With the exception of Wednesday afternoon we've seen gentle movements of 10 yr. treasury bond yields this past week

For the coming week, the max pain is currently 950. Although puts typically outnumber calls, at the moment we see a put to call ratio of only 0.70/1. With more calls being purchased than puts, we should see some pressure on market makers to delta-hedge buy. Unfortunately, the hedge funds that engineered last week's dip will have the help of the market makers this week, should TSLA threaten to rise above 950.

The expected return of max pain on Monday to more normal numbers (after the previous week's leaps expiration dip) did in fact occur as expected. Unfortunately, the decrease in the stock price throughout the week dragged max pain down with it.

Coronavirus Update

The UK continues its significant decrease in cases this week

Moreso than any previous week, the U.S. has demonstrated it is well past peak of omicron surge and moving down the backside now. This development should balance out any short-term headlines regarding Covid deaths.

What we want to see as soon as possible is for TSLA to get above the mid bollinger band again so that it is not pulling the bands down with time.

For the week, TSLA closed at 846.35, down 97.55 from the previous Friday's 943.90. The hedge funds won the battle this week, but as long as you weren't holding weekly options you haven't really lost anything. Once fear defuses regarding interest rates and the market starts bargain hunting in the tech sector, TSLA will be positioned for a nice comeback. Additionally, understanding the implications of this past ER will take time for some investors. Those of us who have not been invested in SpaceX (but wanted to be) now have the opportunity to be on the ground floor of Elon's AI push (through FSD and robots). The good news is that R&D to make such progress is a very small part of a company with the breadth of Tesla now. There's little risk but truly phenomenal upside. That reality will start to set in with time, but certainly when Full Self Driving nears maturity. I have been a beta-tester for FSD and am favorably impressed with recent progress. In particular, I see how FSD handles threats of pedestrians and bicycles near the driving space and is reacting like an intelligent driver would. Hoping you put this week's trading in the rearview mirror and press ahead to enjoy a fine weekend. The future for Tesla is bright.

Conditions:
* Dow up 565 (1.65%)
* NASDAQ up 418 (3.13* SPY up 11 (2.48%)
* TSLA 846.35, up 17.25 (2.08%)
* TSLA volume 44.3M shares
* Oil 86.82
* IV 65.8, 77%
* Max Pain 950
* Percent of TSLA selling tagged to shorts: 40%

 

[Papafox]

TSLA chart above

QQQ chart above

Congratulations, longs, a climb of over 10% today for TSLA should help cement the bottom of this dip and aid in TSLA undoing more of January's overdone dip.

So, what's the reason for such a strong climb on Monday?
* First off, let's forget this CNBC story by Lora Kolodny that the Credite Suisse upgrade to "outperform" with a 1025 price target was the reason for the rally. Utterly ridiculous.
* Next, Let's compare the Dow gains of 1.17% to NASDAQ gains of 3.41%. Hmm, looks like reverse flow in the previous sector redistribution away from tech growth stocks
* Consider these NASDAQ gains: TSLA 10.7%, ARKK 9.5%, NVDA 7.2%, AMZN 3.9%, AAPL 2.6%. It looks like the backflow in sector redistribution concentrated on companies such as TSLA that had been hit hardest by money flowing out of tech to value. Companies like Amazon and Apple received the earliest reprieve from the big hits, Nvidia was somewhere in the middle, and companies like ARKK and TSLA had been hit hardest (and thus benefitted the most today). A reverse flow of the sector redistribution is exactly what I was hoping to see because it paves the way for the market to calm down a bit now and be more rational.

Taking a look at the TSLA daily chart, the one anomaly that really sticks out is the leveling of TSLA in the final 15 minutes of market trading. Every other stock in the NASDAQ that I looked at was climbing during this time period with the index. Folks, unless there was Tesla-specific news that I wasn't aware of, we've been hit again by a Wall Street pick pocket. Considering this is the best they could do to slow down the TSLA bulldozer pushing upward on such a strong day, it's not that terrible for us.

10 year treasury bond yields falling below 1.8% on Monday after the initial opening spurt was a positive for the market

Max pain decreased to 920 on Monday morning as call buying caused all strikes at 900 or above to be dominated by calls. With 10,000+ calls at 1000, the market makers aren't going to readily want to see TSLA climb above that number this week. In the meantime, expect some resistance at 950 as well.

It's still a long climb to reach 1000, but if TSLA can climb through this likely-well-defended price the mid bb at 1010 and the 50 day moving average at 1031 aren't too much higher.

Conditions:
* Dow up 406 (1.17%)
* NASDAQ up 469 (3.41%)
* SPY up 8 (1.80%)
* TSLA 936.72, up 90.37 (10.68%)
* TSLA volume 34.7M shares
* Oil 88.15
* IV 60.7, 59%
* Max Pain 920
* Percent of TSLA selling tagged to shorts: 46%

 

[Papafox]

Clarification
When we first saw sector redistribution from growth techs to value stocks, we actually saw NASDAQ down and Dow up. Value stocks were going up at the time. Next came the heavier worry stage when both NASDAQ and Dow closed down but NASDAQ closed a lot more down than Dow. This was a time when money was moving out of the market but moving out much quicker from the tech sector in NASDAQ than elsewhere. On Monday we saw money moving back into the market (both Dow and NASDAQ up) but its destinations were very closely tied with those stocks that had lost the most in the earlier flow away from them (thus the reverse flow).

 

[Papafox]

TSLA chart above

QQQ chart above

Let's see how Tuesday's trading looks as we go down the TSLA checklist
* Big Mandatory Morning Dip without reason? Check
* Big dip from noon to 4pm close relative to NASDAQ? Check
* Pushdown or cap into close? Check (for 2nd trading day in a row)

In fact, if you go back through the past several days of TSLA trading you can see the usual lineup of manipulations regularly present. What about the controversy of a "recall" of Teslas due to rolling stop? The story came out well before the market opened on Tuesday, and so the dip right after market open was not an immediate reaction but looked more like a grossly-amplified QQQ dip. TMC member @insaneoctane did a good job in this post of laying out the FUD and Elon's response. The story was a big nothingburger.

There really is no visible valid reason why TSLA should see these exaggerated mandatory morning dips (that have been going on for years) while other stocks do not. There's no good reason why TSLA traders more poorly in the afternoons (relative to the NASDAQ) than other stocks. We never hear a peep out of our favorite youtube and Twitter TSLA personalities about manipulations, they just act as if the frequent weakness into close of TSLA trading days is some type of odd one-time event.

Which brings us to Wednesday. As of time of writing, NASDAQ futures are up over 1%. GOOGL just ran more than 8% higher after earnings, and AMD did great too and is up 10%. Are the manipulative forces going to hold TSLA back during Wednesday's NASDAQ strength? History suggests that once enough upward pressure is applied to TSLA, it turns into a bulldozer climbing the mountain and you should best stay out of its way. It'll be fun to watch, particularly if a good number of the recent manipulations get undone. Also, these strong tech results are going to go a long ways to help the market realize it has overdone the growth tech to value migration and manipulators will have an even harder time convincing TSLA investors they need to be fearful.

Let me just repeat that every so often TSLA has a big rally that brings it reasonably close to the upper price targets set by analysts. Manipulations along the way are completely undone by such moves. As long as your time horizon remains long with TSLA and the company continues to execute well, you will realize Tesla's cumulative progress once that next big rally plays out. In the meantime, HODL.

10 yr. treasury bond yields closed below 1.8% yet again, a result with which the market is comfortable

Max pain was listed as 930 Tuesday morning and TMC member @viridi in this post that number appears to be the target of the spoofers. TSLA closed at 931.25 after remaining level when the rest of the NASDAQ climbed strongly into close (yet again). I'm sure all of this is just coincidence /s . Let's see if the capping team can keep TSLA below the 950 call mountain on Wednesday (NASDAQ future are up over 1%).

Notice since Thursday's big drop that volumes have been diminishing (along with fear). We're now down to a typical 24M shares traded.

Conditions:
* Dow up 273 (0.78%)
* NASDAQ up 106 (0.75%)
* SPY up 3 (0.68%)
* TSLA 931.25, down 5.47 (0.58%)
* TSLA volume 24.4M shares
* Oil 88.67
* IV 59.9, 57%
* Max Pain 930
* Percent of TSLA selling tagged to shorts: 45%

 

[Papafox]

TSLA chart above

QQQ chart above

The would be strong Wednesday fell short for the NASDAQ as job numbers diluted some of the enthusiasm for Google and AMD's Q4 reports. What we ended up with was a lukewarm NASDAQ (up 0.5%) split into winners and losers. Paypal and Square got spanked badly. Disruptive stocks were not embraced by the market and ARKK closed down more than 5%. Less controversial stocks Nvidia (up 2.45%) and Apple (up 0.70%) faired well. It really was a day for witch hunts, with the market looking for weakness. Naturally, Electrek and the Los Angeles Times were happy to stir up Tesla worry with stories about phantom braking (never mind that the problem peaked last year and has been diminishing). An after hours story about supply chain issues for Tesla solar roofs caused some weakness after hours.

I would say that when the market is on a witch hunt and you're trying to just blend in, a unique and disruptive stock like TSLA is liable to get too much of the wrong kind of attention. We should see the witch hunt continue on Thursday as the market has a conniption about Facebook (which should be of no surprise given the news leading up to today's ER by the company). Facebook's 20% fall pulled QQQ down significantly shortly after market close (see above). With Nasdaq future showing 2% down for Thursday, keep that seatbelt snugged up. In good time we'll ride out these crazy times and see days when the bargain hunters prop up the market (such as we saw on Monday).

Overall, the NASDAQ has fallen close to 9% since Jan 3 and TSLA has fallen nearly 25%. Be glad that TSLA has strong growth planned in 2022 and will likely continue to outperform analyst expectations on quarterly results.

A nice, benign day for 10 yr. treasury bond yields

Max pain remains at 930. The 900 strike, which had been close between puts and calls is now dominated by puts, which in theory would support a close above 900 on Friday.

Notice the lower volume of TSLA today, only 22M shares traded. As the market runs low on TSLA investors to shake out, volumes will continue to drop.

Conditions:
* Dow up 224 (0.63%)
* NASDAQ up 72 (0.50%)
* SPY up 4 (0.97%)
* TSLA 905.66, down 25.59 (2.75%)
* TSLA volume 22.1M shares
* Oil 87.74
* IV 58.6, 52%
* Max Pain 930
* Percent of TSLA selling tagged to shorts: 48%

 

[Papafox]

TSLA chart above

QQQ chart above

We live in interesting times. On Tuesday and Wednesday TSLA noticeably underperformed QQQ and NASDAQ as sector troubles (plus likely some good old fashioned manipulations) pulled the stock down. We've continued to see TSLA sinking relative to QQQ in the afternoons as volumes fall (suggesting that hedge funds are taking advantage of the lighter volume of afternoon trading to pull TSLA lower. On Thursday, TSLA suddenly traded considerably stronger than QQQ and it didn't appear to be a sector thing. ARKK closed down 5.6% compared to QQQ's close down a whopping 4%. The NASDAQ hadn't seen such a bad day in about 18 months. So why the strength for TSLA? The stock showed its greatest strength in the morning when volume was highest. I suggest some whale was acquiring TSLA shares and the buying trailed off in the afternoon so as to not elevate the stock price too much until the buying is completed.

How about the fluctuations of TSLA's price with time of day? At about 11:10am TSLA was trading up a whopping 3.3% while QQQ was down 2.3%, for a difference of over 5.5%. At close TSLA's advantage had been whittled down to only about 2.5% above QQQ. Despite the afternoon dip into close, TSLA showed remarkable strength on Thursday.

The NTSB's forced "recall" of over 800K Teslas over a safety belt chime that might not sound in some unique situations was indeed regarded as the nothingburger it was and TSLA soared compared to other stocks.

Many felt that Thursday's NASDAQ dip into close was because of fears that Amazon would miss their earnings. After all, Amazon was trading down nearly 8% for the day. That big jump upward in after-hours trading you see on the QQQ chart was the results of Amazon's Q4 earnings coming out: a huge beat primarily due to Amazon's stake in Rivian. Thus, the big mega-cap disappointments of the quarter have been Netflix and FaceBook (Meta), two companies whose performance was boosted by the pandemic and whose reduced performances are not at all indicative of what's happening with other big tech stocks.

With Amazon's strong performance, big tech stocks including TSLA have delivered strong results and a migration away from these stocks has indeed been overdone. Can we now please take a break from the fearful tech stock selling? NASDAQ futures are up over 2% as I write, suggesting the market may well undo much of Thursday's tech stock rout. Considering that TSLA was trading at least 2.5% stronger than QQQ and the macros are up 2% going into Friday (at this moment in time) Friday holds the possibility for being a strong TSLA day. Fingers crossed.

News
* Charles Gasparino of Fox News Tweets that up to 60 firms involved in activist short selling are being investigated by the Department of Justice (developing story)

There were multiple reasons why the macros were red on Thursday. Higher 10 yr. treasury bond yields added a little more reason.

On Thursday, max pain dipped to 920 from 930. That move makes sense since (with the exception of 910) every strike below 920 is dominated by puts and every strike 920 and above is dominated by calls. The market makers would really prefer to keep TSLA below 950 on Friday's close because of the tall call mountain at 950. If that strike cannot be protected, MMs definitely don't want TSLA climbing above 1000 with nearly 17K call contracts open.

For the most part, TSLA doesn't typically spend much time below 900. Looking for a bounce on Friday.

Conditions:
* Dow down 518 (1.45%)
* NASDAQ down 539 (3.74%)
* SPY down 11 (2.35%)
* TSLA 891.14, down 14.52 (1.60%)
* TSLA volume 26.2M shares
* Oil 90.19
* IV 63.5, 71%
* Max Pain 920
* Percent of TSLA selling tagged to shorts: 44%

 

[Papafox]

TSLA chart above

QQQ Chart above

Friday began with high promise, between the TSLA above market trading and NASDAQ tailwinds from a big Amazon beat, both on Thursday. Although the NASDAQ showed reluctance to rise in the morning, it did so in the afternoon, paving the way for the expected rise of TSLA on Friday. We still are seeing regular NASDAQ dips going into close. I suspect much of the dip is caused by traders jumping out at end of day, unwilling to see what news comes forth between close and Monday's open. I also suspect that with volatile NASDAQ stocks, hedge funds are juicing the dips into close in a profitable maneuver that ends with closing their daily shorts during the 4:00pm closing cross.

For the week, NASDAQ closed up 2.3% while TSLA closed up about 9.1%. That's a positive for tech stocks and a big positive for TSLA. What we're seeing is some progress with calming the fears of tech stock dread. No doubt more twists and turns to the story lay ahead but positive earnings by so many tech stocks this past quarter do entice investors to buy back into these winners. We also saw the NASDAQ's single day biggest lost of 3.7% in a single day this week, so we're still in the Wild West portion of this dip.

For the coming week, Tesla will release it's 10K for the Q4 2021 quarter. The anti-Tesla crowd will rummage through the document, looking for any reason to be alarmed. We could also see 10 year treasury bond yields hit 2% this coming week. That would be a good enough excuse for a down day on the market, so keep the seatbelt snugged up.

The positives are that Tesla continues to execute strongly as a company. January Shanghai deliveries were strong for a first month of a quarter and Shanghai should continue to raise production levels this quarter. We'll finally see some deliveries from Berlin and Austin, but the numbers will be relatively low. We may see additional price target upgrades by analysts after the 10K is released. As the quarter progresses and the various pundits get comfortable that Q1 will be yet another record-setting quarter, the stock should respond favorably. The Q1 2022 ER will also be Tesla's opportunity to properly answer Toni Sacconaughi's worry about how Tesla can hit 3 million plus deliveries in 2024 without the $25K Tesla. Remember that analysts still regard Full Self Driving and Robotaxis as alien technologies not worthy of a spreadsheet entry.

10 year treasury bond yields closing at 1.92% on Friday is a concern. Rising above 2% would likely bring a negative reaction from the market.

For the upcoming week, max pain has dipped to 915 and the call mountains at 920 and 930 explain why.

Consider what the past two weeks of max pain and closing price are telling us. On Jan 27 we saw an enormous dip as some overall market fears were leveraged the day after Tesla's excellent earnings report in order to engineer a big pushdown of the stock price for the benefit of some option seller(s) who bet big on their ability to keep TSLA under control during ER week. Friday the 28th was a small climb that still allowed the hedgies to make out like bandits. Monday's big spike upward was possible because of a big macro climb (NASDAQ up 3.4%) which allowed max pain and TSLA price to get close together again. Was it inevitable TSLA would climb 10.7% on Monday? That's better than a 3X multiple vs. the NASDAQ. Perhaps the market makers had some influence on just how strongly TSLA responded to that NASDAQ rise. Friday was a tweaking of the stock price to enable maximum profits for the option sellers that week.

Coronavirus Update

Looking at UK Covid new cases, you can see a plateau this past week. It happens.

Meanwhile, new cases in the U.S. continue to fall quickly. The media will highlight the deaths number, but with new cases falling so quickly the stock market is likely not going to be negatively impacted.

Since the daily deaths number lags behind the new cases number by a couple weeks, we've only in the past week seen a peak in the daily deaths of the omicron surge within the U.S.

After weeks of dips, it was refreshing to see a week of overall climbing, despite the market's continued worry state.

For the week, TSLA closed at 923.32, up 76.97 from the previous Friday's close. Hoping you are enjoying a wonderful weekend.

Conditions:
* Dow down 21 (0.06%)
* NASDAQ up 219 (1.58%)
* SPY up 2 (0.47%)
* TSLA 923.32, up 32.18 (3.61%)
* TSLA volume 24.4M shares
* Oil 92.31
* IV 58.4, 51%
* Max Pain 915
* Percent of TSLA selling tagged to shorts: 47%

 

[Papafox]

TSLA chart above

QQQ chart above

TSLA was ready and willing to run higher Monday morning with a little macro support, but as the macros sank into the red, so did TSLA. One news item that separated TSLA from other stocks was the release of its 10K. In this TMC Post, @The Accountant pointed out the massive growth of raw materials and work in progress. The raw materials suggest Tesla is taking steps to avoid supply chain shortages, and the growing work in progress (when there are no big parking lots filled with unsold vehicles) suggests energy products awaiting missing parts. These are positive situations. Expected CapEx in future years will remain remarkably stable even though profits will be growing many times over. Instead of the substantial news, the media focused on a possibility of another race discrimination charge against Tesla and another SEC bout of indigestion over an Elon Tweet.

As I pointed out in this post in the main investor's forum, TSLA's dip in the final 45 minutes was outsized compared to the dips of similar mega-cap tech stocks. Most of what we're seeing in daily movements of stock price are macro induced, but if our pockets are picked quite regularly for a few bucks going into close, after a while it adds up to some real money.

For now, I don't want to be on the sidelines when TSLA has shown the capability to make 10%+ moves higher. I'm also not betting on quick moves and big upward moves in the near future because these macros are indeed funky and we haven't seen the inevitable rate increases yet. Tesla continues to execute, however, and the recent Sandy Monroe teardown of Model S Plaid shows just how thoroughly this company is pulling farther and farther ahead of the competition. I'm in stock and conservative Deep in the Money Leaps and I can wait out the craziness.

Yet another day is here with 10 yr. treasury bond yields hovering near 1.9%

Max pain was 940 Monday morning. Market makers would really like to protect 950 this week due to the 5K high Call mountain.

Since the big pushdown on Jan 27 we've seen tops below 950 and rising intra-day bottoms. Technical traders would bet that the wedge resolves itself with an upward move, which would be great, but the reality is that macros may step in and dictate the move. Without a big macro move, however, I'd go with the technical chartists.

Conditions:
* Dow up 1 (0.00%)
* NASDAQ down 82 (0.58%)
* SPY down 1 (0.32%)
* TSLA 907.34, down 15.98 (1.73%)
* TSLA volume 20.1M shares
* Oil 91.43
* IV 58.9, 53%
* Max Pain 940
* Percent of TSLA selling tagged to shorts: 42%

 

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TSLA chart above

QQQ chart above

Watching TSLA trade today was about as exciting as watching the grass grow. Sigh. Volume was a mere 16.8M shares traded, which makes manipulations just that much easier. If you look down at the tech chart you'll see we've gone weeks without the market makers allowing TSLA to close at or above 930. Was there any surprise when we saw apparently capping at 925 today? We spent most the day flirting with 925 but Lucy kept pulling the football away when Charlie Brown stormed in for the kick. Nonetheless, weekly calls are selling like hotcakes, so someone is always willing to believe that Lucy will turn over a new leaf.

QQQ reached its highest level just prior to close. As for TSLA? About 8 minutes prior to close we saw a $5 pushdown of TSLA and immediate recover that didn't play out on the QQQ chart. Even with QQQ running higher into close TSLA closed at 922 in level trading. As for the 4:00pm closing cross we saw over 970K shares trade that minute. There's wheeler-dealing behind the scenes, my friends.

Let me say a few words about Deep In The Money leaps, which I sometimes buy when TSLA is in a dip. If I were to buy a leap now, it would likely be a 400 strike because I don't like paying much for time value. Sometimes I hear from an investor who bought at the money strike leaps and then feels badly when the stock price descends. On Tuesday, if you bought 920 strike Jan24 leaps, they would cost you about $312. Of that amount, $2 is intrinsic value (difference between strike of $920 and stock price of $922) and $310 is time value. Add $920 to 310 and you get $1230, which is how high the stock price has to be in Jan of 2024 for these leaps to just break even. Now, consider that Jan24 400-strikes cost about $581. Of that amount, $522 (922-400) is intrinsic value and the rest, $59, is time value. TSLA would need to climb to $981 ($922+59) to break even by Jan24. That's a huge difference. Unless Elon's conference call notes dropped out of his back pocket and you picked them up prior to the call, betting on high time value leaps takes on much more risk than you need.

A move higher to 10 yr. treasury bond yield of 1.96% puts us close to the 2.00% mark (which is worth a day of the market acting fearful). Although a big move higher would see those calls forcing the market makers to buy shares to delta-hedge, market makers and other option sellers

Max pain dipped slightly to 935 as the higher strikes keep getting loaded up with calls. Just look at those 15K+ 1000-strike calls saying to the market makers "I dare you, I double-dog dare you to keep TSLA below the big call wall this week, as you've so successfully done over the past 8 years. Spin the roulette wheel." No thanks.

Here you can see that wedge getting closer to resolution. The market makers don't want TSLA to close at or above $930. Since late January, the lows of the candles have been rising. Again, I think we'll likely see this wedge resolved by a macro move, one way or the other. Sooner or later, though, positive news from Tesla or the approaching end of Q1 will likely induce upward movement.

Conditions:
* Dow up 372 (1.06%)
* NASDAQ up 179 (1.28%)
* SPY up 4 (0.82%)
* TSLA 922.00, up 14.66 (1.62%)
* TSLA volume 16.8M shares
* Oil 89.74
* IV 55.3, 43%
* Max Pain 935
* Percent of TSLA selling tagged to shorts: 44%

 

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TSLA chart above

QQQ chart above

On Wednesday the NASDAQ had a big day as money moved quickly back into tech growth stocks. The NASDAQ closed up more than 2%, with some tech stocks like Nvidia closing up over 6% and others such as ARKK and ARKG up over 5%. In such an environment you'd expect TSLA to be up a minimum of 4% and more likely 5-6%. Instead, TSLA barely closed up 1%.

Looking at the TSLA daily chart, you can see a very deep dip a couple minutes before market open. TSLA shrugged it off and climbed to nearly 944 just 9 minutes after open. Alas two more deep dips that brought TSLA close to the red/green line that morning then transpired. The whole day was a series of walkdowns followed by sharp recoveries, then more walkdowns.

If you look at TSLA's trading activity for the day, there's no way that a portfolio manager would be selling in this fashion. The steep dips that are quickly rejected by the market are telltale signs of manipulations. I continue to believe that some big hedge fund(s) or even some market makers have decided that TSLA can be manipulated in this current environment of macro fears and they're still shooting for a 930 close on Friday.

On Thursday, the big news will be release of the CPI (Consumer Price Index) number. In the main investors' thread, @StarFoxisDown! says the number to look for is 7.3%. The assumption is that price increases less than this amount will be a relief to the market and especially those investing in tech stocks and a number greater than 7.3% will be problematic. Fingers crossed. Since the current level of manipulations are only possible in an environment of interest fears, a downward move in rates would mean less fear, which would also translate to less power for the manipulators to work with.

Let me also add that the downward manipulation pressure on TSLA has been so relentless recently, that investors start looking at the stock as having something wrong with it, rather than simply trading at too low a price (Someone must know something we don't). I've seen this situation before with TSLA when the company was doing well but investors started to doubt themselves because of the relentless pressure. In time this gets sorted out, hopefully before the Q1 results are needed to do the job for us.

A dip in 10 yr. treasury bond yields to below 1.95% was a welcome move today

More buying of calls caused the max pain number to dip to 930 on Wednesday. The put to call ratio is a low .85/1 (usually puts outnumber calls). Call walls at 950 and 1000 are each about 1400 calls higher than Tuesday. One would expect market maker delta-hedging to have pushed TSLA higher at a substantial multiple to the NASDAQ on Wednesday, but oddly we don't see it. Are they betting that they can hold TSLA below 950 this week?

At long last TSLA closed above 930.

Conditions:
* Dow up 305 (0.86%)
* NASDAQ up 296 (2.08%)
* SPY up 7 (1.46%)
* TSLA 932.00, up 10.00 (1.08%)
* TSLA volume 17.1M shares
* Oil 89.92
* IV 53.5, 41%
* Max Pain 930
* Percent of TSLA selling tagged to shorts: 44%

 

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TSLA chart above

QQQ chart above

About an hour before market open, the Consumer Price Index number came out: 7.5% vs. 7.3% expected. Moreover, the previous month's number was 0.6% when the market was expecting 0.4%. That steep pre-market dip on both the QQQ and TSLA charts is a direct response to those numbers. Once we entered market trading, various big fish started buying the dip, which led to QQQ reaching nearly to the green by 10:40am and TSLA actually climbing into the green at 10:30am. For the morning's trading, TSLA was definitely stronger than the macros.

Notice the steep QQQ dip at 12:48pm. Not so coincidentally, that's the time of the big move up in 10 yr. treasury bond yields on the chart below. As the bond yields started climbing again in late afternoon the macro dip accelerated. At the end of the day, 10 yr. bond yields had reached 2%. My interpretation is that the market was ready to buy the dip from the slightly higher CPI number but freaked out (as expected) to 10 yr. bond yields finally approaching 2% for the first time. The rise in bond yields was a direct result of the CPI number today, so we ended up getting what amounted to a delay reaction to the CPI numbers. Well, we knew the 2% bond yield tantrum was coming and we might as well get it out of the way.

I see nothing particularly unusual about TSLA's afternoon's trading. TSLA closed down with about a 1.5X multiple of the NASDAQ, and I'm okay with that. ARKK and Nvidia closed down with similar multiples. I guess the day's biggest surprise was that I didn't see any obvious manipulations other than likely capping of TSLA as it was reaching a bit too high above 940 in the morning.

From some TSLA investors I hear rumblings along the lines of "2022 is going to be a lost year. Looks like 2023 is going to be the good year." Let me just say that it's way too early to make that call. Second half of 2022 could be something to remember for TSLA investors, or it might not be. The point is that you have to remain invested to benefit from the run higher, whenever it comes. It also makes sense to keep your investment horizons far enough out so that you can outlast dips such as this early 2022 weakness without actually losing money.

News:
* The FUD continues heavily. The latest bash was this stinker by AP's Tom Krisher, commented on the "recall" of Tesla because the NHTSA wanted to disable the ability of Tesla owners to modify the noise their electric cars put out. That's the same Tom Krisher that Elon called a "lobbyist, not a journalist" last week.

The rise in CPI numbers had an immediate effect upon 10 year treasury bond yields, as you can see above. The 12:48pm dip of QQQ was a direct result of the early afternoon rise of treasury yields, and the weakness going into close was a direct result of the yields finally working their way to a close above 2%

Max pain rose to 935 as we saw trimming of some near the money Calls and growth of Puts (such as those at 930-strike). TSLA's weak performance relative to the NASDAQ on Wednesday resulted in nearly 2K 950-strike calls disappearing. Lucy is going to have lots of fun on Friday because Charlie Brown has bought nearly 25K 1000-strike Calls and is racing for the football. The presence of over 7500 puts at 900-strike suggests the market makers would prefer to keep TSLA above that number for Friday's close, and closer to 930 would be even better.

Thursday's 2% yield on 10 yr. treasury bonds messed up the lovely wedge we saw developing. We didn't exactly break to the downside, however, and a close near 930 would leave the issue ambiguous as we head into the weekend.

Conditions:
* Dow down 526 (1.47%)
* NASDAQ down 305 (2.10%)
* SPY down 8 (1.80%)
* TSLA 904.55, down 27.45 (2.95%)
* TSLA volume 21.9M shares
* Oil 98.88
* IV 55.4, 44%
* Max Pain 935
* Percent of TSLA selling tagged to shorts: 51%

 

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TSLA chart above

QQQ chart above

Friday set out to be another boring day of aligning TSLA's stock price with max pain before the close, but growing fears of a Ukrainian invasion interfered and the market traded off-script into the close. The Dow lost 1.4%, Nasdaq lost 2.8%, and TSLA closed down 4.9% (for a 1.75X multiple). In comparison, ARKK closed down 2.5% and Apple down 2%.

At first, growing tech companies look to be more resilient to any recession caused by a battle for control of Ukraine. I think the market is worried instead that if an invasion does take place oil prices will rise and that rise will accelerate inflation, which will require an even-larger rise in interest rates.

One nugget I've learned from the news is that Feb 15 is the day of typical max freeze of the ground and as we move closer to March an invasion by tanks becomes far more problematic. If there is military action it would likely take place this coming week for that reason.

As TSLA has been battered by macros one of the questions that arises is "how low can TSLA go?" We've seen Gary Black on Twitter charting to compare various numbers with Tesla stock price and showing that TSLA is already deeply in an anomaly. More recently, we've seen talk on TMC's main investor thread focusing on "P/E compression" (the substantial lowering of TSLA price to earnings ratio as earnings continue to grow quickly and the price of the stock continues to fall}. Here's a post by @StarFoxisDown!

We haven't seen analysts adjusting TSLA price targets downward because of this forced lower trading price, and as long as no downsizing of price targets happen, my view that TSLA will on occasion run up to a price close to the top price targets remains. The lower the price goes relative to analyst price targets, the more room there is for a bigger rally. Let's see if that theory remains intact.

Then there's this chart by James Stephenson which has been pretty accurate the past two years in predicting low-end of TSLA long-term trading range..

Meanwhile, Tesla keeps executing and this is the key to what @StarFoxisDown! has been saying. Although Wall Street can engineer a temporary dip of TSLA, at some point with these new much lower P/E ratios and continued earnings growth, TSLA is going to force the market to increase its price because otherwise it becomes way too much of a bargain. Recent reports are that Shanghai is doing well shipping vehicles. Further, even though Elon already has stated that Austin Model Ys will contain structural battery packs with 4680 cells, this Solving the Money Problem video explains the significance of a recent leak by an apparent Tesla employee about yields in current 4680 production.

Bottom line: the continued growth and expansion of earnings at Tesla will out of necessity bring the price dip to an end at some point. Nothing to do but hold on? Actually, since I invest primarily from an IRA with no tax consequences for transactions, there are lots of things that can be done on a day like Friday. When the macros are in a continuous retreat, TSLA price performance is likely to follow obediently. I always have some leaps that could benefit from being rolled forward, and on days with big price changes in a dependable direction, I can often do so without cost. On a down day such as Friday I will sell one or two leaps and then when I can afford to rebuy that leap or leaps with the desired expiration date I do so at no net cost. On rising price days (when market makers are likely forced to delta-hedge into closing) I will buy the desired expiration date leaps and then sell the earlier expiration date leaps when they pay for the recent purchase. I've been able to do up to 4 such buy then sell (or sell then buy) transactions in a single day. I only work 1 or 2 leaps at a time because sometimes the market will surprise you and then you have to scramble to lock in the best option available (even if it requires spending some money to do so). With the deep in the money leaps such as I own, even a $5 change in stock price can generate the desired opportunity to shift expiration dates. Such is not possible with near the money leaps.

For the week, TSLA closed at 860.00, down 63.32 from the previous Friday's 923.32. Better days lay ahead. Hoping you have enjoyed a wonderful weekend. We are approaching the midpoint of Q1 and attention will start focusing soon on the quarter's performance, which should be a good thing for the stock price.

A dip in 10 yr. treasury bond yields didn't help macros on Friday. Rather, the fear that sank the markets on Friday was likely the reason for the dip in yields.

We have some big numbers for this coming Friday's options expiration. Market makers will be highly inspired to coax TSLA above 900 but keep it well below 1000. The strike price 930 is working to be the point at and above which calls rule and below which puts rule. Max pain is 950.

This past week was setting out to be a repeat of the previous week where stock price and max pain would close near each other after relatively level movements, but Friday's fears of Ukraine invasion spoiled the plan. Chart courtesy of @JimS

Coronavirus Update

Looking for some good news? The decrease in new cases has been falling nearly as quickly in the United States as they rose initially. Such a large dip in cases as the flu season is coming to an end must be a positive, should the market take time to recognize it amidst the other issues out there. I am not including a UK chart because the plateau we saw last week has fallen away. Worldwide, as long as a new, more problematic variant doesn't emerge, the market will relax a bit on this issue.

The market's conniption on Friday about Ukraine fears brought us toward the lower end of the trading range we've been seeing form late January to the present. The lower bollinger band is co-located with the red 200 day moving average and such a combination should be extremely strong support if it is ever needed.

Conditions:
* Dow down 504 (1.43%)
* NASDAQ down 394 (2.78%)
* SPY down 9 (1.97%)
* TSLA 860.00, down 44.55 (4.93%)
* TSLA volume 26.4M shares
* Oil 93.10
* IV 59.2, 56%
* Max Pain 925
* Percent of TSLA selling tagged to shorts: 48%

 

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TSLA chart above

QQQ chart above

Despite a relatively strong morning, the NASDAQ and QQQ couldn't hold much of the gains going into close. Throughout the day, TSLA showed more strength. Let's hope for some macro strength this week so that TSLA can recover lost ground. Overall we can see what appears to be TSLA being capped to keep it below 900 on Monday. In particular, notice how straight the 890ish trading line was from 11:40am until 12:50pm. The big TSLA dip and the QQQ dip began simultaneously. Overall, TSLA showed strength despite funky macros and some capping.

News:
* A vehicle carrier filled with Model Ys that had presumably just been built at the Austin GF was posted on Twitter here.

* Production at Shanghai GF grew from 66,759 in December to 68,117 in January, a nice increase. The other numbers of the Chinese report (retail sales and exports) are rather irrelevant, since Tesla can sell all vehicles produced. Rob Maurer's video is the best source for understanding the situation.

* Elon Musk donated over 5 million shares to charity in November (Reuters article here). This donation of shares (instead of cash) makes tremendous sense to Elon for tax purposes. The big question now is where did the shares go and how many have been sold so far?

* James Stephenson has done a 69 Tweet series of charts and data regarding Tesla growth and profits. Very much worth a look.

* After Rob Maurer Tweeted that he had just posted 1000 Tesla podcasts, Elon replied, "Wow, that’s a lot of podcasts! Ok, I will do one. Maybe we could combine with Dave Lee and a few others." Dave Lee has already responded "I'm in!" Consider the significance of this podcast. There are areas of the Q4 Earnings Report that left Tesla open for concern by some analysts. This podcast could go a long way to clearing up misconceptions such as how Tesla will reach over 3 million deliveries in 2024 with the $25,000 Tesla, what's going on with 4680 cell production, etc. The podcast has the potential for being a positive catalyst for TSLA is the right questions are asked, and I think they will be.

* Piper Sandler retains their "overweight" rating for TSLA and just raised their price target from 1300 to 1350 after reviewing the 10K. The current weakness of the stock price and fears of inflation have not affected the analyst ratings so far.

10 year treasury bond yields are back above 2% again

Max pain is 950 this week, with lots of reasons why market makers would benefit from seeing TSLA close above 920 and definitely 900.

Both the 200 day moving average and lower bollinger band are hovering just below 825. The combination should make for some nice support should we need it during macro craziness.

Conditions:
* Dow down 172 (0.49%)
* NASDAQ down 0 (0.00%)
* SPY down 1 (0.33%)
* TSLA 875.76, up 15.76 (1.83%)
* TSLA volume 22.3M shares
* Oil 94.86
* IV 58.0, 51%
* Max Pain 950
* Percent of TSLA selling tagged to shorts: 44%

 

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TSLA chart above

QQQ chart above

The market determined there was less risk of war in Ukraine come Tuesday morning and we saw a nice rally. The Nasdaq gained 2.53% for the day while TSLA gained 5.33%. Importantly, the NASDAQ outperformed the Dow by about 2 to 1. Producer prices came in higher than expected, but fortunately the market was already prepared for this possibility and chose a positive path with the uplift from the Ukraine situation.

If you compare TSLA's chart to QQQ's though, you will see apparent slight of hand. TSLA nearly reached its closing price at 10:09am when it hit 919.4. That was a 5% increase but at the time QQQ had only risen 1.7%. In other words, TSLA was climbing at about 3X QQQ's climb as it first approached the 920 level. Clearly someone didn't want TSLA closing above 920 for the day because the stock was capped just below 920 and only managed to sneak above during the final minutes of market trading.

On the positive side, take a look at the 12:50pm dip for both QQQ and TSLA. TSLA continues to show relative strength to the broader index and its dip was subdued compared to QQQ's

All in all, I'd say the market makers were the likely cappers on Monday as the closing price is aligned with their Friday closing desires.

CNBC
I award this week's Flaming Dog Poop Award to CNBC for this truly odorous segment on Tesla Full Self Driving aired on Monday. Dave Lee in this video walks you through the deceptions and bad acting. It's the kind of stinker of a hit piece that only CNBC could cobble together with the help of a special guest appearance by Consumer Reports.

Fortunately, CNBC also aired this segment with Adam Jonas discussing EVs. Jonas basically said he's steering clients clear of Ford and GM as long as Tesla exists. Of the two videos, the Jonas interview carried far more weight with regard to the day's stock trading. Unfortunately, the CNBC hit piece on FSD will not go away and will be referenced in the future by Tesla FSD's enemies.

Rising producer prices pushed 10 year treasury bond yields a bit higher today

Although max pain was set at 950 Monday morning, by Monday evening it had descended to 925 and you can see why in the chart above. All the strike prices North of 900 are now dominated by calls. The call mountain at 1000-strike has now grown by about 5K additional calls. A close above 900 but below 950 is where the MMs would like to see TSLA on Friday afternoon, and Monday's close is well within the sweet spot.

Hurrah, a close above the mid-bollinger band. Now, let's see if we can stay on the good side of the mid bb and get the bands rising again.

Conditions:
* Dow up 423 (1.22%)
* NASDAQ up 349 (2.53%)
* SPY up 7 (1.61%)
* TSLA 922.43, up 46.67 (5.33%)
* TSLA volume 19.1M shares
* Oil 92.50
* IV 53.5, 42%
* Max Pain 925
* Percent of TSLA selling tagged to shorts: 43%

 

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TSLA chart above

QQQ chart above

Wednesday was a wild and wooly trading day as Ukraine fears pulled broader markets lower for most the day. Stocks buoyed in the final 2 hours of trading as the notes of the Fed January meeting were released and they looked positive to the market. I used that steep run higher after 2pm to roll forward one of the call options in my IRA.

Comparing TSLA to QQQ, you can see TSLA trying to climb relative to QQQ from about 10am until noon. TSLA experienced a deeper pushdown than QQQ in the afternoon, then all stocks rallies to the green after the Fed minutes came out. Interpretation: I think we have a number of opportunistic traders trying to play Ukraine fears this week by shorting stocks such as TSLA. That would be one explanation for the TSLA early afternoon pushdown. Don't think there was some mischief afoot? Take a look at the 4:00pm closing cross trading volume for TSLA: 1.3Million shares in a minute's time.

Don't be surprised if we see more of the same going forward this week: TSLA morning strength from bargain buyers and then in the afternoons shorts trying to take advantage of Ukraine fears. Volume of only 16K shares makes the afternoon manipulations all the easier.

News:
* @Artful Dodger points out here that TSLA short interest rose 1.6 million shares Jan 14-31.

10 yr. treasury bond yields remained rather steady Tuesday, just a bit above 2%

Max pain remained at $925 as puts continue to dominate at 900 and below while calls rule above 900. A move above 950 would bring the nearly 15K 950-strike calls into the money, and the option sellers certainly don't want a big rally this week that would bring TSLA above 1000, where we see 35K calls, an increase of about 3K since Tuesday.

TSLA inched higher on Wednesday, giving itself about a $12 cushion above the mid bollinger band

Conditions:
* Dow down 55 (0.16%)
* NASDAQ down 16 (0.11%)
* SPY up 1 (0.11%)
* TSLA 923.39, up 0.96 (0.10%)
* TSLA volume 16.6M shares
* Oil 91.01
* IV 52.6, 39%
* Max Pain 925
* Percent of TSLA selling tagged to shorts: 46%

 

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TSLA chart above

QQQ chart above

Thursday's trading was Ugly as the markets went fearful over Ukraine invasion possibilities. The NASDAQ lost 2.88% while TSLA lost 5.09%, for a 1.8X multiplier. For reference, ARKK was down 6.44% while Apple was down only 2.13%. EV stocks actually did much better as a whole on Thursday, so there might have been some slight of hand with TSLA to achieve the 5% dip.

Generally speaking, I think the market makers would like to see TSLA close over 900 on Friday in order to cross the big Put wall. I continue to believe you have some players betting on Ukraine fears to keep TSLA and other stocks down on Friday, so you may see some tug of war between market makers and the fearmonger hedge funds on Friday.

If trading is up on Friday, don't be surprised to see a bit of a dip going into close as traders jump out of the market for the weekend in case of negative Ukraine developments. OTOH, if we manage to see a negotiated solution then you'd see quite a positive market response when it happens. HODLing.

One bright spot for Thursday was a drop below 2% in 10 year treasury bond yields

Max pain for Friday remains at 925 as a put wall at 900 strike gives incentive for the market makers to tweak the price higher before Friday's close if possible. The other player this week is likely hedge funds and others betting on a Ukraine fears dip and that faction could become involved in Friday's trading.

You can see the upper and lower bollinger bands closing in as TSLA has been stuck in a relatively narrow trading band throughout February.

Conditions:
* Dow down 622 (1.78%)
* NASDAQ down 407 (2.88%)
* SPY down 10 (2.14%)
* TSLA 876.35, down 47.04 (5.09%)
* TSLA volume 18.2M shares
* Oil 91.39
* IV 59.3, 58%
* Max Pain 925
* Percent of TSLA selling tagged to shorts: 47%

 

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TSLA chart above

QQQ chart above

The market's fears of Ukraine invasion continued on Friday as the NASDAQ lost 1.23% to TSLA's 2.21% dip, a 1.8X multiplier. Lately we've seen seeing this reduced multiplier which suggests more entities are taking advantage of these dips and buying TSLA.

Over the past week, positive we've learned of comments about 4680 cell production, photos of Model Ys at Austin GF, and continued evidence of another record quarter that's now more than half over. In 2022 quarters Tesla will be seeing noticeably fewer charges related to Elon Musk awards than in 2021, so the growing profits from vehicles will be even better reflected in GAAP profits. Once the market bounces back from Ukraine worries there should be good news about Tesla financials to help buoy the stock further.

The tricky part is calling the bottom of the Ukraine crisis if you have dry powder to invest. The patterns we've seen so far are worry, followed by hope, followed by a new Russian aggressive development. There's plenty of opportunities for the pattern to repeat more times before the market decides the worst is over. Patience.

A further dip to below 1.95% in 10 yr treasury yields is likely a temporary situation as the market worried about Ukraine.

Consider growing short interest in TSLA as the stock has dipped. Typically, the shorts don't get out at the bottom. As they do exit their positions, though, they will add upward force to the recovery from the recent dip.

Max pain for Friday is 915. More relevant, perhaps is that 875 is the dividing line between put domination and call domination. With the exception of the 1000-strike calls, options activity is unusually light this week. Unusually light option activity suggests less incentive for manipulations. As for the 1000-strike calls, unless a camera crew catches Biden, Putin, and Ukraine's president sitting around a campfire, holding hands and singing Kumbaya, those calls are likely not going to pay off.

Over the past three weeks we've seen max pain in the lower 900s and stock price jumping up and down between the mid 800s and the max pain levels.

Coronavirus Update

The Omicron surge has completed the big rise and fall in the U.S. now. At some point a problematic new variant could spook the market again but for now there's a relaxation of worry about Covid in the U.S.

We're at a point where the lower bollinger band at 837.15 and the 200 day moving average at 829.27 could offer some support. The bad news is that if the dip is caused by macros we're likely to see TSLA still trading at perhaps a 1.8X multiple to the NASDAQ. We'll see. I believe that news tends to trump technicals but technicals are often strong in an absence of news.

For the week, TSLA closed at 856.98, down 3.02 from the previous Friday's 860.00. Hoping you all enjoyed your weekend. There really will be an end to this Ukraine drama.

Conditions:
* Dow down 233 (0.68%)
* NASDAQ down 169 (1.23%)
* SPY down 3 (0.65%)
* TSLA 856.98, down 19.37 (2.21%)
* TSLA volume 22.6M shares
* Oil 91.07
* IV 60.4, 60%
* Max Pain 910
* Percent of TSLA selling tagged to shorts: 47%

 

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TSLA chart above

QQQ chart above

On Tuesday investors worried just how the sanctions the POTUS planned to impose would affect the economy and we saw a dip going into the 2pm hour. Sanctions mentioned in that particular speech were pretty tame in terms of effects upon our economy and so that market bid stocks back higher. You can see that QQQ nearly undid the entire day's dip not long after 3pm. I managed to roll one of my call options forward at no expense during that rise (I'd rather work a volatile day than sweat it).

Now let's compare the two charts above. Clearly someone wanted TSLA to go down on Tuesday. When both TSLA and QQQ were at their lowest, TSLA was trading at about 3X QQQ's dip. Someone held back TSLA's recovery from the dip and TSLA closed 4X lower than QQQ. Again, we're seeing a lesser performance of TSLA going into the close than earlier in the day, and this is a pattern that so often can be explained by manipulations during the lower volume afternoon hours. TMC's @viridi made two posts on Tuesday here and here which detailed techniques of the manipulators (viridi has level 2 data) and I quote one of the posts, "As TSLA broke just above $810, a sell order at $810.41 for 2,600 shares capped the stock, and quickly drove TSLA below $810. DOJ needs to step up its investigation."

Who's doing these manipulations? The short answer is entities making money from them, and that includes hedge funds as well as perhaps some of the independent big short-sellers who have jumped back into the TSLA short during this interest+war dip. They're going to try to push TSLA as low as they can until the market starts a recovery, cover their shorts low, and make some dough. The good news for longs is that you can expect TSLA to have a more robust recovery than otherwise once the shorts start their covering. In the meantime one of the strongest companies on the exchanges is trading at a fantastic discount.

Regarding Tesla executing well, I'm currently beta testing version 10.10.2 and I'm loving the constant improvements with each new upgrade. I've turned at two intersections that in the past were problematic and now are fine with 10.10.2. Since I was also testing the original Version 1 autopilot on highways when it first came out (and was pretty shaky back then) I know the pace of improvements and I'd say that FSD is moving at a noticeably quicker pace than what we saw with the original autopilot. Bullish.

Yields on 10 year treasury bonds continued to stay low. Lower yields mean higher prices for the bonds, which suggests some buying for safety. With inflation higher than yields, and with higher yields coming in the near term, it's hard for me to understand the appeal of such bonds. I really have never wrapped my head around bonds, however, and I'm going to just leave it at that.

The max pain chart shows significant activity in the purchase of new options expiring Friday, with puts more numerous than calls by about 10% (pretty typical). Max pain is listed as 895, which makes tremendous sense since the 900 strike is a 6K tall call mountain now and market makers would like to see us close below 900 this week. The transition point between put dominance and call dominance remains around 875.

As was my concern, the traditional support sources (lower bollinger band and 200 day moving average) didn't stand a chance against the combination of Ukraine worries and some manipulative mischief by shorts and hedge funds. Fortunately, as with other prices that end in 00, as we approached 800 buying picked up. Typically we see dips below these even hundred numbers after some days of pressure but often there's a rebound.

Looking at a three year period, you can see that the stock does indeed dip under the 200 day moving average from time to time, but it spends far more of its time back above the 200 DMA.

Conditions:
* Dow down 483 (1.42%)
* NASDAQ down 167 (1.23%)
* SPY down 5 (1.07%)
* TSLA 821.53, down 35.45 (4.14%)
* TSLA volume 27.2M shares
* Oil 92.35
* IV 62.1, 67%
* Max Pain 895
* Percent of TSLA selling tagged to shorts: 42%