Papafox's Daily TSLA Trading Charts

[Papafox]

TSLA chart above

QQQ chart above

This past week TSLA has been under a ferocious bear attack with coordinated FUD and supporting hedge fund manipulations. It's almost as if Reuters and Bloomberg are working TSLA as a tag team, taking turns on dispersing FUD on the topic of China demand. The FUD-du jour on Thursday was a Bloomberg release of Tesla reducing some shifts at Shanghai from 11.5hrs. to 9. 5hrs. If the news is true, there can be explanations such as the rest of the factory can produce the same number of vehicles because the bottleneck is elsewhere, Tesla has maintenance and upgrades to conduct through year end, etc. Naturally, we're expected to believe too many vehicles to sell (despite Wednesday's news Tweet from Ray for Tesla that China inventory was essentially depleted a couple days ago.

Comparing the two charts above, you can see strong macros after the first half hour but TSLA was strongly up and down the whole day. Again, the strong up and down suggests manipulations when there is no news or macro forces to sway it. We saw whack-the-mole any time TSLA dared stick its cute little snout into the green, and the strong pushdowns became less and less strong as the day progressed. Also, notice that buyers quickly took care of any dips that ventured down to 170. Bottom line: Thursday was a bad day for the manipulators.

The big news Friday is the PPI inflation numbers to be released before market open. In some months the market pretty much ignored the PPI numbers, but this is not a typical month with the beginning of a Fed pivot possible next week. We might see hedgies exaggerate the news if numbers are hot, but I think we might also see market strength if the numbers come in cool. Fingers crossed.

Yields on 10 yr. treasury bonds rose Thursday but remained below 3.5%

Max pain Thursday morning was 180. The place where calls and puts become balanced is in the area of 175 to 177.50. That's probably the MM preference for Friday. OTOH, if the market really wants to soar, then MMs will likely put on the brakes short of 185 because that's the first really strongly put dominated strike.

Wednesday's options volumes

As with all this week's trading, volume was high at 97.3M shares. We saw serious efforts to push TSLA lower but fortunately macros help buoy TSLA so that its dip was minimal.

Conditions:
* Dow up 184 (0.55%)
* NASDAQ up 123 (1.13%)
* SPY up 3 (0.78%)
* TSLA 173.44, down 0.60 (0.34%)
* TSLA volume 97.3M shares
* Oil 72.01
* IV 64.2, 61%
* Max Pain 180
* Percent of TSLA selling tagged to shorts: 47%

 

[Papafox]

TSLA chart above

QQQ chart above

Friday's trading took a turn for the red pre-market when the PPI numbers came in a bit warmer than expected. Despite QQQ remaining in the red for much of the morning, TSLA shot higher and managed to exceed 182 in early afternoon. When QQQ pulled back in the afternoon, particularly in the final hour, TSLA remained relatively strong and outperformed the NASDAQ by nearly 4% for the day. Nearly 4 million shares trading in the closing cross suggests lots of covering underway Friday late afternoon. In the absence of any positive TSLA news, I believe that one or more of the manipulating hedge funds decided to cover or start loading prior to the macro uncertainties of next week. A lower fed rate increase of only 0.5% would be seen as a positive (possible beginning of the pivot) by the market and a rally is possible if it pans out as expected. On Thursday the pirates tried but were not able to push TSLA below 170 for more than a few minutes before buyers came to the rescue. Thus, I think the big dog pirates are thinking this may be as low as TSLA will go in the near future. Of course with macro weakness anything is possible, so always keep that seatbelt snug.

Looking at past CPI monthly numbers, the Nov 21 was 6.8, so we'll only get a 0.2 advantage going into the Dec. 2022 numbers. The good news is that after this CPI comparison cycle, the 12-month-previous numbers will be changing about 0.5/month through March. Factor in the big dip in oil so far in December (last third of Nov. might not be enough) and numbers going forward have oil and comparison numbers going for them. That makes Tuesday's numbers a bit more critical, especially with Wednesday's FOMC meeting results. Fingers crossed, and no guarantees. Since the Fed has already broadcasted willingness to cut rate of increases going forward, any weakness on a questionable CPI numbers on Tuesday may well be overridden by a mere half point raise on Wednesday.

The big story of the past week was, of course, the ferocious bear attack on TSLA. The media has been churning out TSLA FUD like there's no tomorrow, focusing on China demand. We learned last week that Tesla now has over 10K Model Y orders for Taiwan, which might be satisfied by backhauling Berlin-built Teslas on returning Roros. Using Berlin to supply Taiwan would require higher numbers of Shanghai Teslas to be shipped to Europe. Further, we learned of over 5K orders for Teslas from Thailand, with fulfillment to begin in Q1 23. There's another demand lever that will be effective. Bottom line is that I believe Tesla has a good handle on stimulating demand as needed to match production worldwide. Q4 P&D report could be the moment when this reality becomes clear. The one caution I have at the moment is that I have heard of some U.S. buyers who were granted the right to pick up their vehicles on Jan 1. Perhaps we will see some U.S. deliveries on Jan 1 and a note in the P&D Report that "4,000 Models 3 and Y were delivered on Jan1 because of IRA issues".

Yields on 10 yr. treasury bonds climbed for the second day on Friday, up to about 3.6%.

Max pain came in at 177.50 Friday morning. Looking at the chart above you can see that the transition point between put domination and call domination was about 172.50, but because of a lack of lower calls but and abundance of higher puts, the max pain was higher. A close near 179 kept that 20K+ wall of calls out of the money. What a coincidence, the market makers make truckloads of money yet again this week /s

Thursday's options volumes

For the coming week, max pain is showing 190, a full 12.50 above the previous Friday's max pain. Notice, too, since this is more than a weekly expiration, the puts and calls are more evenly matched, which places less pressure on the market makers to fight a TSLA price rise.

With the deep weekly fall of TSLA prices hopefully over now, the market makers have been doing better with matching price with max pain on option expiration Fridays these past two weeks. Chart courtesy of @JimS

Want to see what a vicious bear attack looks like? Behold the past week's trading. Fortunately, the uncertainty of the coming week plus attractive price to cover or load up was too much for the manipulators, and it looks like one or more went into buying mode on Friday.

For the week, TSLA closed at 179.05, down 15.81 from the previous Friday's 194.86. What we hoped would be the week where TSLA ascended 200 turned into the great bear attack week. The good news is that TSLA bounced off 170 and big dog manipulators showed signs of capitulating on Friday. Fingers crossed. Enjoy the rest of your weekend. The coming week has potential to be a drama, one way or the other.

Conditions:
* Dow down 305 (0.90%)
* NASDAQ down 77 (0.70%)
* SPY down 3 (0.75%)
* TSLA 179.05, up 5.61 (3.23%)
* TSLA volume 104.9M shares
* Oil 72.01
* IV 62.8, 55%
* Max Pain 190 for coming Friday
* Percent of TSLA selling tagged to shorts: 45%

 

[Papafox]

TSLA chart above

QQQ chart above

Premarket was trading slightly down, suggesting sentiment for retail wasn't too negative on Monday morning, but the serious selling began at market open and continued throughout the day. Why do I say bear attack instead of typical market forces? Notice during the final hour and a half of market trading when QQQ ran strongly higher, TSLA continued on its sluggard ways without blinking. My best guess of what transpired is that Elon's controversial comments over the weekend at a certain social media platform stirred up enough concern that the shorts and hedge funds decided to run with it. After all, you don't need a real crisis, mere fear and concern is good enough, and when the stock price started freefalling after open, algos joined in, as did gullible longs who were saying to themselves, "This is all Elon's fault!" Sigh.

Volume was 109.8M, so clearly lots of non-shorts and non-hedgies got pulled into the selling. Percent of selling by shorts increased to 49% and nearly 2.7 million shares traded during the 4pm closing cross, suggesting lots of covering of day-shorting activity.

Tuesday's trading will likely be colored heavily by the results of the CPI numbers, released at 8:30am. We should also see China weekly insurance numbers giving an idea of domestic sales in China for the past week. Troy is looking for 16K as expected and 18K as very good. The problem with weekly numbers is that vehicles in transit can give false impressions and we know that a Roro ship loaded with Teslas this week for a domestic port. Don't be surprised to see the pirates try to build a problem out of a somewhat low number if that happens.

My hope is that the CPI Inflation numbers are either cool or cool enough to get the fed to stick with its expected 1/2% raise on Wednesday. Whatever happens on Tuesday can be overridden by Wednesday if the market is happy with the Fed decision and commentary. Fingers crossed.

May I just remind you that there's always a bottom to these long dips. The pirates make a point of creating as much pain and uncertainty for longs as possible. Recent bear raids typically include lots of put buying to force MM delta-hedge selling and to profit from actually buying of puts that are then forced into the money. Profits for Q4 should be stunning, and so there is an end in sight, especially with IRA giving a mega-boost to U.S. demand, starting Jan 1 and battery incentives giving a nice profit boost as well in '23. In the meantime, keep that seatbelt snugged up.

News:
* Tesmanian says Tesla Giga Shanghai Denies Rumor of Model Y Production Halt for Last Week of December

Yields on 10 yr. treasury bonds inched slightly above 3.6% on Monday

Max pain Monday morning was 190. That didn't help much with a bear attack underway. The transition point between put domination and call dominated strikes is right now about 182.50, but that number will be lower by Tuesday morning. Fingers crossed that the CPI numbers are cool on Tuesday, along with Jerome Powell's disposition on Wednesday.

Friday's options volumes

Another Monday, another bear attack. Looks like a combination of lower bollinger band at 165.17 and 52 week low of 166.19 could provide some support.

Conditions:
* Dow up 529 (1.58%)
* NASDAQ up 139 (1.26%)
* SPY up 6 (1.44%)
* TSLA 167.82, down 11.23 (6.27%)
* TSLA volume 109.8M shares
* Oil 73.32
* IV 66.8, 70%
* Max Pain 190
* Percent of TSLA selling tagged to shorts: 49%

 

[Papafox]

TSLA chart above

QQQ chart above

During pre-market trading the CPI report for November came out cooler than expected (CNN report here). Both TSLA and QQQ saw pre-market trading jump above 4% increases, but starting minutes before market open TSLA saw a pushdown that actually brought it into the red shortly after 10am. TSLA's disconnect between pre-market and market trading is important because the pre-market trading showed no signs of "fear of Elon Tweets" and yet when different big dog actors got involved approaching market open, the plummet happened. I continue to believe that Elon's Tweets are more the enabling and convenient fear generator for a major bear attack, rather than the actual reason for the dip.

@Curt Renz pointed out that a major incentive for a push below 160 on Tuesday was a chance to activate the stop-losses that were in place at that price. Once that target was achieved, TSLA bottomed out a bit under 158 at about 12:30pm and then started recovering. That time also marked the approximate end of the QQQ descent, and so the manipulators of TSLA probably would have tried to go a bit deeper if macros were supporting.

Volume was extremely high at 175.9 M shares and we saw over 4.6 M shares trade during the 4pm closing cross minute. My feeling is that a number of hedge funds were planning on a bear attack for CPI day, and decided to carry out the attack anyway despite the cool numbers while relying about general concerns about Elon's Tweets and the FUD favorite: China demand.

Which brings us to Wednesday considerations. After such a positive CPI, I just can't imagine the Fed reneging on their expected reduction in the rate of increase in December. I think the raise of 1/2 of 1 percent will happen Wednesday afternoon and even though this is the expected outcome, the market will initially give a sigh of relief and we will see the market rise. I hope to close a call roll on that news (opened at 158 buy) and I'd rather close it after the news but before Powell can muddy the waters with his commentary. We'll see.

I know it's a real bummer to experience a new 52 week low. We all want the bottom to be in, already. May I just say that if the Fed decision is for a reduced raise, many in the market are going to feel that this is the beginning of the pivot, and that's a good thing. Hang in there. Tesla is going to make an eye-opening amount of money in Q4 and there will indeed be a bottom to this long, long downward run.

News:
* TMC's @The Accountant mentioned in this post that profit per car should increase from about $14.3K to $14.6K (Q3 to Q4). There's concern on Wall Street about some discounts, but the greater production numbers simply make Tesla's factories more efficient.
* Twitter's Moneyball said in this Tweet that 12,977 Teslas were registered in China for the week of Dec 5-11

Yields on 10 yr. treasury bonds settled after Tuesday morning's cool CPI numbers were released, closing just a bit above 3.5%

Max pain on Tuesday morning was 185. The transition point between put domination and strike domination is about 172.50.

Monday's options volumes

Note the volume spike in Tuesday's trading. TSLA closed down more than $5 from its previous 52-week low.

Conditions:
* Dow up 104 (0.30%)
* NASDAQ up 113 (1.01%)
* SPY up 3 (0.76%)
* TSLA 160.95, down 6.87 (4.09%)
* TSLA volume 175.2M shares
* Oil 75.02
* IV 67.7, 77%
* Max Pain 185
* Percent of TSLA selling tagged to shorts: 51%

 

[Papafox]

TSLA chart above

QQQ chart above

We now know why TSLA plunged the past few days: Elon sold about 22 million shares, worth about $3.6 billion. The good news is that this explains the high volume and deep losses of the week. @Curt Renz suspected it, as did Leo K. Part of the tipoff was Elon's Tweet about it not being good to carry too much debt into bad economic times. I believe Gary Black listed about $3 billion more selling as the worst case additional selling needed. This sale might in the long run be better than the alternative, which could have been Elon using TSLA shares as collateral for a loan. That arrangement might spur hedging by the banks and convince bad actors to try intentionally pushing TSLA lower to trigger some type of selling event by Elon.

What we really could use from Elon is an all clear signal. We never received one from the last selling spree, and so there's been a bit of an overhang because of it. Let's hope Elon gives a done selling signal soon. At the very least we don't want to see more Form 4s early next week.

The other factor on Wednesday was the FOMC statement, where the Fed raised interest rates the expected 1/2 of 1%. The market was unhappy, though, because the Fed spoke of a top rate that was higher than previous expected. On the positive side, Powell did not mention anything about the size of the February raise. If that turns out to be a quarter percent, it will not already be baked in and we could see celebration. Also, because of lower oil prices so far in December and a 12-month jump of about 1/2 percent (rather than .2%) from Dec 21 to Dec 22, the year over year comparison should be favorable in December. During the press conference, reporters were definitely pressing Powell on the idea of whether there's already too much in the way of signs that inflation is slowing. If December CPI comes in cool, then we could get a positive Feb FOMC response.

The big drama for Thursday will be the market determining whether or not Elon is done selling. Once that's determined, with TSLA at a new 52 week low and with the Fed uncertainty out of the way now, a little cooperation from the macros could get the stock's recovery underway.

News:
* Goldman cuts TSLA price target, maintains buy rating
* TSLA named Top Pick by Morgan Stanley
* Giga Berlin begins three shifts on Dec 16

Yields on 10 yr. treasuries fell to below 3.5% on Wednesday. The yields initially spiked when the Fed info came out but descended throughout the afternoon, afterwards.

Max pain on Wednesday was 177.50. The transition point from put domination to call domination is closer to 167.50. Most importantly, look at that tall put wall at 150. Market makers don't want to go below 150 this week.

Wednesday's options volumes. I learned that maximum-pain.com publishes the current day's options volumes, not the previous day's. How did I discover this? I woke early enough to see the chart as a flat line. Subsequent versions gained volume as the day progressed.

With the release of the FOMC decisions, QQQ fell and pulled TSLA down with it. We saw 1.8M shares trade during the 4pm minute.

Conditions:
* Dow down 142 (0.42%)
* NASDAQ down 86 (0.76%)
* SPY down 3 (0.64%)
* TSLA 156.80, down 4.15 (2.58%)
* TSLA volume 139.7M shares
* Oil 77.23
* IV 66.8, 70%
* Max Pain 177.50
* Percent of TSLA selling tagged to shorts: 49%

 

[Papafox]

TSLA chart above

QQQ chart above

Lots to cover today. The macros dove on Thursday as November as retail sales fell 0.6%, 3X the estimate. Nonetheless, TSLA managed to trade relatively level near 158 in a kind of reverse whack-the-mole fashion where the whack came from below any time TSLA dared to descend into the red. Either some mighty enormous fund was busy buying TSLA or perhaps TSLA was in buyback mode. The stock price was just unnaturally immune from sinking into the red. This is not a pattern you'd see if Elon was selling more stock, so investors may be gaining confidence that the current Elon share sale is over, which then could prompt more buying once the macros green up. With volume at 120M, plenty of buying was indeed going on, nonetheless. TSLA closed up 0.55% to the NASDAQ's -3.23% performance, for a difference of 3.78%.

Regarding the retail sales weakness, this is the type of data that catches the Fed's attention. Along with falling year over year CPI reports (month of December looks like it's set up with Dec 21 comparison to indicate another dip. So, with falling inflation and dipping retail sales, the Fed might start thinking more about slowing their monthly rate increases even more while they evaluate economic developments. In this broader context, I see that November retail sales slowing as a potential net positive for growth stock investors. The market thinks otherwise, with NVDA down 4.09%, AMZN down 3.42%, and ARKK down 4.90%.

Tesla decided to tweak the U.S. incentives by offering 10K free supercharger miles to those taking December deliveries. Again, I think Tesla is so far doing a good job of balancing sales incentives and margins. As @The Accountant recently pointed out, profits per vehicle sold should be going up in Q4.

Ihor Dusaniwsky shows that shorts are not covering yet. Thus, there's still covering to be had once the exit begins.

For those of you who haven't seen it yet, Gary Black did (IMO) a good job of calmly laying out the potential for Tesla to do well in the future during his CNBC interview. Gary also Tweeted that Tesla's board likely would not have approved Elon's stock sale if Elon had non-public information and Q4 was going to disappoint. The exception, I think, would be situations that go south after the stock sale. Further, Black also said in the Tweet that the Q4 trading window for such sales closes on Friday.

News:
* GigaTexas has hit the 3,000 Teslas/week rate
* RBC Capital cuts TSLA price target
* CFRA has stated a strong buy for TSLA and a $300 price target
* Tesla has purchased land in Mexico and has been approved to build a factory in Nuevo Leon

Yields on 10 yr. treasury bonds declined to about 3.45% after weak retail sales in November suggested a slowing economy (which in turn suggests that maybe it's time for the Fed to slow down and assess the effects of the current rates before going higher)

Max pain was 172.50 on Thursday, while the transition from put domination to call domination lies at about 167.50. That big put wall at 150 hasn't changed much in open interest for the past few days. Should selling start on Friday morning the market makers will do some share buying to delta-hedge.

Thursday's options volumes

Thursday was only the second positive day in 9 trading sessions.

Conditions:
* Dow down 764 (2.25%)
* NASDAQ down 360 (3.23%)
* SPY down 10 (2.45%)
* TSLA 157.67, up 0.87 (0.55%)
* TSLA volume 121.5M shares
* Oil 76.08
* IV 66.7, 69%
* Max Pain 172.50
* Percent of TSLA selling tagged to shorts: 47%

 

[Papafox]

TSLA chart above

QQQ chart above

Friday's TSLA price action was all about the 13.9 million shares that traded during the 4pm closing cross. The funds that mimic the S&P500 needed to sell that many shares in Friday's S&P500 rebalancing and really aren't concerned about the price except the want to pay the same amount as everyone else pays during Friday's closing cross. The hedge funds of course wanted that transaction to be at the lowest price possible, so that when they buy to cover the shares shorted earlier in the day or week, they make the greatest profit. Some didn't short and will just hold the shares for the ride up. Market makers, OTOH, didn't want the price to fall below 150 because of the HUGE number of 150 strike puts out there. The result was that TSLA closed 23 cents above $150. Thus, all the fat cats made out like bandits, once again. Imagine that.

What I find interesting is Thursday's trading where TSLA stayed slightly in the green and there was an inverted whack-a-mole any time it dared to dip below while the NASDAQ was down more than 3%. One possible explanation is that the market makers were propping TSLA up on Thursday so they could defend it more easily and keep it above $150 on Friday.

The next big controversy of the weekend has been @Troy 's worry that offering 10,000 free supercharger miles means there's a big demand problem in the U.S. Realize that most purchasers won't use but a fraction of those miles and the financial hit will take place in 2023. His concern is that EV-CPO numbers are only showing one instance per configuration type per location. So, I looked at a state with only one sales location, Hawaii. Here's a link to the Honolulu Ala Moana new inventory, which showed 14 Model Ys as I wrote this piece. Then I went to EV-CPO and limited the search to Model Ys in this state and came up with 14 as the available vehicles. They matched. Further, I saw two pairs of Model Ys that were identical, but the correct number of Ys still appeared on EV-CPO. My point is that I don't think the EV-CPO numbers are off that much. I've been monitoring sales at a couple locations are they slowed a bit recently. The new incentive really won't affect margins for Q4 in any significant way but should give sales a bump. Tesla knows what they're doing.

Regarding this low stock price for TSLA, unless a meteor lands on one of the factories I think we're at or close to the bottom. This past week has been a "sugar" show, with three days of Elon selling and then 14 million shares of S&P500 funds selling on Friday. Doesn't get much worse than that. According to Gary Black, the window for Elon selling more shares in Q4 is now closed, and the S&P500 rebalancing is complete. This week has been an artificial pushdown that need not be repeated. Elon was raising money to pay off debt from the Twitter acquisition, not to keep Twitter going. Again, no need for a repeat.

While Tesla may or may not hit its 50% production growth in 2022, Q4 is going to be one giant leap forward in profits that will have the analysts updating their spreadsheets in a positive way. When they plug in Q4's profits and realize that Tesla is almost up to a 2M vehicle/yr. production rate, hitting 2.1M vehicles in 2023 should be very, very doable unless the economy absolutely does a belly flop.

Besides the IRA coming to the U.S. on Jan 1 and giving up to $7500 incentives for EVs, there will be payments to Tesla and other North American battery makers that could cover half the cost of the battery. Cha-ching! Over in China, the zero-Covid policy has faded out. There will be short-term issues, of course, but then China is poised for a more productive 2023.

Let's talk interest rates and economy for a second. Starting for month Dec 22, the CPI comparison month in 2021 will be growing about 1/2% per month through March. Oil prices are below $75/barrel, which is going to affect most other prices (see chart below). The November 2022 retail sales dipped 0.6%, which is a warning shot over the bow the the U.S.S. Darth Powell. More reasonable Fed members will be pushing for a pause or a mere 1/4% raise in February and I don't see us going to 5.5% before the big pause. In this Tweet, Gary Black says Barrons is questioning the Fed's interest rate moves now. Pressure is building.

So, we have pressure building on the Fed, which is good. The economy is still fine but showing signs of stress, precisely the situation where a pause makes sense. Interest rates will continue to fall. Tick, tick, tick.

We thus have potentially good news coming about interest rates by the next Fed meeting, Tesla is going to produce and sell a sugar-load of vehicles in 2022 and then show that they're nearing 2023's needed production rate for the 50% increase in that year. I have zero reason to sell at the bottom and so I HODL and keep rolling my leaps at low or no cost until the skies clear.

News:
* Marthias Fons Tweets that Shenzhen has introduced an approx. $1700 incentive that would apply to Model 3 RWD and Model Y RWD through Jan 31, 2023. Just in the nick of time.
* Tasmania says that installation of the 9,000 ton Gigapress at GigaTexas is near
* Both GigaBerlin and GigaTexas his 3,000 vehicles produced this past week

Yields on 10 yr. treasury bonds closed on Friday just below 3.5%. All things considered, that's good for growth stocks because the bond market is thinking lower, not higher inflation than before.

Max pain this past Friday was 170, but that number didn't mean much once the hedge funds turned on the sledge-o-matic to get the stock price down as close as possible to 150 before the closing cross. Because the market makers kept TSLA from closing below 150, they once again fared pretty well in killing as many puts and calls as possible.

Friday's options volumes. It was all about 150 strike puts

TSLA's stock price departed from max pain by a huge margin on Friday but market makers still managed to make the close very profitable by keeping the price above 150. Chart by @JimS

Max pain for this coming Friday, Dec. 23, will be 160.

During the last few days TSLA has pretty much been riding the lower bollinger band, but that really wasn't the case for Friday. Everything was all about the 14 million shares that were traded in the closing cross and the way the hedge funds pushed as low as possible and the market makers defended 150 with a vengeance.

For the week, TSLA closed at 150.23, down 28.82 from the previous Friday's 179.05. If I had dry powder I would consider this week's dip to be an incredible gift. Hoping you spent time with loved ones this weekend. Keep yourself healthy in mind and body. Better days lay ahead.

Conditions:
* Dow down 282 (0.85%)
* NASDAQ down 105 (0.97%)
* SPY down 5 (1.18%)
* TSLA 150.23, down 7.44 (4.72%)
* TSLA volume 136.6M shares
* Oil 74.29
* IV 69.2, 82%
* Max Pain 170 for previous Friday, 160 for coming Friday
* Percent of TSLA selling tagged to shorts: 53%

 

[Papafox]

TSLA chart above

QQQ chart above

Monday looked like the day we would finally see a bounce off 150. Early pre-market trading exceeded 157, but QQQ went south at market open and TSLA dipped to join it an hour later. We saw no less than 783K shares traded in the 10:36am minute as shorts sold a ton of shares in order to drive TSLA below 150 and activate those stop losses that had been set. TSLA rallied in early noon and peaked around 1:30pm. From there, it was a game of whack the mole as TSLA was hammered each time it stuck it's bushy little head into the green.

Overall, TSLA still managed to significantly outperform the NASDAQ, down 0.24% vs 1.49% on high volume of 139.4M shares. We saw 2.1M shares trade during the 4:00pm minute, suggesting there was lots of covering from the day's shorting activity. Basically the hedge funds and shorts have made a bundle of cash from TSLA's decline and simply don't want the momentum to end. Thus the close 13 cents below 150 and 36 cents below the previous close. Someone wanted TSLA to close red just to keep traders from getting frisky. Even the market makers benefit from such a long slide. Call options typically exceed the Puts, and think of the vast quantities of Calls that have closed out of the money as a result of Wall Street pressure on TSLA. The battle to break free of the dip continues.

One big news item of the day was this Reuters report that the U.S. Treasury Dept. would delay release of the battery mineral data of the I.R.A. until March. The worst case interpretation would be that Q1's IRA incentives will be cut by at least 50%. A better interpretation is that the government's actions places some question marks on Q1's IRA payments and that maybe taking the sure bet $3750 discount in Q4 22 from Tesla might be a better option for some people. Let's see how this plays out over the next few days.

News:
* D. Reyes Tweeted that the Lathrop factory looked like a factory running at capacity (I removed the double-negatives) in his drone flyover on Monday. Look for good things in Tesla Energy during Q4
* Deutsche Bank maintained a $355 price target and buy rating for TSLA on Monday

Yields on 10 yr treasury bonds rose to just below 3.6% on Monday

Shorts were tagged with 50% of TSLA selling on Monday

Max pain Monday morning was 157.50. Right now, any close between 150 and 152.50 hits the sweet spot between Put domination and Call domination

Monday's options volumes. It's nice to see the calls getting spread further out

Monday was a tug-of-war between bulls and bears. The TSLA bulls would have won if the macros hadn't been so poor.

Conditions:
* Dow down 163 (0.49%)
* NASDAQ down 159 (1.49%)
* SPY down 3 (0.85%)
* TSLA 149.87, down 0.36 (0.24%)
* TSLA volume 139.4M shares
* Oil 76.20
* IV 69.8, 83%
* Max Pain 157.50
* Percent of TSLA selling tagged to shorts: 50%

 

[Papafox]

TSLA chart above

QQQ chart above

What started out as a ho-hum day turned into an 8% plunge after not one but two Twitter files appeared (#s 7 and 8). The morning dip began with #7's release and the end of day dip came with #8's release. I express no opinions positively or negatively about what Elon is doing, I am merely talking about the stock price implications, so please no responses in this thread. You can see the timing of the release of each of these Twitter files was followed by selling. There is a clear correlation now. I believe the situation is that big investors are just like you and me, we keep thinking this this has bottomed out and then another shoe drops. Investors are feeling Elon fatigue right now and I think that multiple funds are signaling their displeasure by doing some selling every time a big Twitter file announcement is made.

The thing is that I don't expect Elon to change. Instead, I think he's going to get the most important (in his mind) Twitter files out into the open and then things will wind down (but never quite stop). We still have the presumed Twitter file about Fauci, and no doubt that one will get a negative response from the market as well. Sigh. Such is our situation.

As for the bottom, that's a very dynamic question. Most investors are holding off buying until this long dip concludes and there's proof of a recovery. The thing is, the stock price has detached itself from reality at the moment and at some point big dog investors such as Warren Buffet or Blackrock will start gobbling up shares of TSLA at these ridiculously low prices and the bottom will arrive. That could happen at any time, or maybe not so quickly, but it will happen. There always is a bottom.

TSLA was hurt on Tuesday by two analyst downgrades of TSLA here. Wall Street is torn between TSLA being the best stock to ride out a recession with and those who are greatly discounting it because of the Twitter effects. Fortunately, those who are strong on TSLA and keeping buy ratings with over $300 price targets are respected banks such as Morgan Stanley and Deutsche Bank. Investors favor the pessimistic analysts when the stock is descending and then favor the optimistic analysts when it is climbing. When the wind direction changes on Wall Street, it can increase to a gale in short order, so be prepared.

Then this Tweet came out:

Elon earlier in the day referenced this Harris poll that said most Americans want Elon to remain in charge of Twitter. He later followed up with the Tweet shown above which indicates he'll find a replacement Twitter CEO. When that day arrives the market will approve and TSLA will run higher.

Complicating our position is that the weekly insurance registration numbers in China have been rather disappointing recently.

On a personal note, most of my holdings are in TSLA ITM leaps, which I've rolled from Sept22s to Jan23s, to Mar23s, and most are in Jun23s now. Once that's completed I start rolling to Sept23. The lower the stock price, the harder the free rolling. I wake at 4:15am in Hawaii to catch a good uptrend or downtrend to roll. This is not the retired life I had envisioned, but you do what you have to do. You work the problem. HODLing shares is unpleasant with such a deep dip, but just remind yourself next time you look at the clock at 4am that HODLing is easier than no-cost rolling massive numbers of leaps. Just work the problem and never let the bastards win.

So, we wait for the wind direction to change and the lower the stock price goes, the more incentive there is for the direction to change. Volume was a massive 156M shares. Experts say that high volume often occurs toward the end of a long rally or deep dip. Hang in there my friends.

Yields on 10 yr. treasury bonds rose to about 3.7% on Tuesday

Shorts were tagged with 48% of TSLA selling on Tuesday. Rest assured they were adding steroids to the dips, as suggested by the very large 2.1M shares traded during the 4pm closing cross.

Max pain Tuesday morning was 155. Market makers would like to at least get to 147 to rise above the deep Put-domination zone

Tuesday's options volumes

The tech chart really shows the stairstep of climbing volumes.

Conditions:
* Dow up 92 (0.28%)
* NASDAQ up 1 (0.01%)
* SPY up 1 (0.14%)
* TSLA 137.80, down 12.07 (8.05%)
* TSLA volume 156.0M shares
* Oil 76.09
* IV 76.7, 95%
* Max Pain 155
* Percent of TSLA selling tagged to shorts: 48%

 

[Papafox]

TSLA chart above

QQQ chart above

Wednesday was a strong day for the NASDAQ, which closed up 1.54%. That macro performance required a response from the shorts and hedge funds because they don't want the gravy train of this dip to end. There's also a strong psychological impact on many investors by reducing TSLA's performance because the tendency of longs is to think "TSLA is a gorked stock" without realizing the effort that's going in to create that appearance on a strong macro day.

Just take a look at those deep dips into the red at 9:38, 10:28, 12:16 and into close. There was no news of substance (to my knowledge) released at such times and no macro dips either. These were spirited manipulations to try and sink TSLA, plain and simple. Next, look at how little time TSLA spent above $140 during its 4 excursions above on Thursday. Can you say "whack-a-mole"? Finally, take a look at the doozy of the TSLA dip at day's end, right after TSLA crossed below 140. You can almost draw a straight line from 140 to intercept the red/green line about 10 minutes before market close. When this straight a line is used to create a desired manipulation, it's pretty obvious once you see it. I suspect one of the hedge funds turned on its sledge-o-matic autopilot with instructions to short sell as needed to get TSLA down below the red/green line a few minutes before market close and to keep it there.

So, why is it important to get TSLA slightly into the red for the close? For one thing, investors who look at their stock apps see a red TSLA when most everything else is green. The message: TSLA is still gorked. Then phase two kicks in because that close 17 cents below Tuesday's close give the ethicallly-impaired clickbait artists (journalist is too nice a word) license to stretch the truth beyond reason. Thus my Yahoo TSLA page showed the following stories:Tesla Stock vs. BYD stock: TSLA stock keeps plungin on China Demand Fears, Musk's Twitter Reign, Tesla (TSLA) stock's losing streak continues after report of hiring freeze, layoff plans (note: earlier in the day stories talked of TSLA being up because of that news), Tesla (TSLA) stock sinks as market gains: what you should know. You get the picture... the prevailing theme is the losing streak continues (TSLA is gorked) but nowhere do the clickbait artists mention the loss was a manufactured dip of 17 cents 10 minutes before market close. That's how the game is played, my friends.

Rob Maurer's Tesla Daily video on Wednesday presented the important stories:
* Tesla is giving a full $7500 discount plus 10K supercharger miles to buyers who purchase M3 or MY between 21Dec and 31Dec. IMO, this is a good move because vehicles will sell and yet the 10 day hit to margins will be not so bad.
* Turkey is being added as a Tesla sales location. This will necessitate superchargers and service centers. IMO, adding Turkey along with adding Thailand earlier should help Shanghai find homes for all its vehicles produced while the China demand is temporarily lowered due to Covid in a country that has yet to build its herd immunity. Tesla continues to expand markets as needed to keep the vehicles flowing.
* Tesla has announced layoffs coming in Q1. This news is normally met positively by Wall Street because it means eliminating unneeded personnel. In the case of Tesla, we see these layoffs about yearly, and they're a time to cut the least productive employees during a perceived slack time. Rob pointed out that it's not really a true hiring freeze because hiring continues where needed.
* On a Twitter Spaces talk Tuesday night, Elon mentioned that he thinks Twitter could hit cash flow positive sometime next year. That's huge news because it helps dispel the illusion that Elon will be continually selling TSLA shares to keep Twitter afloat. Here's a Tweet on the subject by Mathias Fons.

In this TMC post, @NicoV links to European deliveries showing Tesla's Q4 deliveries are its best ever in Europe

@Curt Renz pointed to this Benzinga article about Morgan Stanley saying that Tesla could leverage its costs advantages in EVs and make life very difficult for its competitors. IMO, at some point in Q1 Tesla might give an additional $3750 discount on its M3 and MY vehicles if the Feds are only offering customers half the expected $7500. Margins get negatively affected for a portion of a quarter, but Tesla still moves its vehicles and it'll be hard for the competition to make a nickel.

Bottom line: Wednesday was a manipulated day designed to keep TSLA under control, under 140, and to close at least a few pennies in the red. It worked on Wednesday, but with every dollar dip, TSLA becomes less attractive to sell and more attractive to buy. Tick, tick, tick.

10 yr. treasury bond yields remained about the same on Wednesday, closing just below 3.7%

Max pain Wednesday morning was 148. Strike 145 is pretty neutral between puts and calls but strike 150 and above are call-dominated

Wednesday's options volumes

With A LOT of help by the manipulators, TSLA has remained on a mostly downward trajectory along the lower bollinger band line. At some point sellers have to question the value of selling at these low prices, given Tesla's strong fundamentals.

Conditions:
* Dow up 527 (1.60%)
* NASDAQ up 162 (1.54%)
* SPY up 6 (1.50%)
* TSLA 137.57, down 0.23 (0.17%)
* TSLA volume 144.4M shares
* Oil 78.71
* IV 76.0, 94%
* Max Pain 148
* Percent of TSLA selling tagged to shorts: 47%

 

[mach-edriver]

View attachment 887743
View attachment 887737
TSLA chart above

View attachment 887740
QQQ chart above

Wednesday was a strong day for the NASDAQ, which closed up 1.54%. That macro performance required a response from the shorts and hedge funds because they don't want the gravy train of this dip to end. There's also a strong psychological impact on many investors by reducing TSLA's performance because the tendency of longs is to think "TSLA is a gorked stock" without realizing the effort that's going in to create that appearance on a strong macro day.

Just take a look at those deep dips into the red at 9:38, 10:28, 12:16 and into close. There was no news of substance (to my knowledge) released at such times and no macro dips either. These were spirited manipulations to try and sink TSLA, plain and simple. Next, look at how little time TSLA spent above $140 during its 4 excursions above on Thursday. Can you say "whack-a-mole"? Finally, take a look at the doozy of the TSLA dip at day's end, right after TSLA crossed below 140. You can almost draw a straight line from 140 to intercept the red/green line about 10 minutes before market close. When this straight a line is used to create a desired manipulation, it's pretty obvious once you see it. I suspect one of the hedge funds turned on its sledge-o-matic autopilot with instructions to short sell as needed to get TSLA down below the red/green line a few minutes before market close and to keep it there.

So, why is it important to get TSLA slightly into the red for the close? For one thing, investors who look at their stock apps see a red TSLA when most everything else is green. The message: TSLA is still gorked. Then phase two kicks in because that close 17 cents below Tuesday's close give the ethicallly-impaired clickbait artists (journalist is too nice a word) license to stretch the truth beyond reason. Thus my Yahoo TSLA page showed the following stories:Tesla Stock vs. BYD stock: TSLA stock keeps plungin on China Demand Fears, Musk's Twitter Reign, Tesla (TSLA) stock's losing streak continues after report of hiring freeze, layoff plans (note: earlier in the day stories talked of TSLA being up because of that news), Tesla (TSLA) stock sinks as market gains: what you should know. You get the picture... the prevailing theme is the losing streak continues (TSLA is gorked) but nowhere do the clickbait artists mention the loss was a manufactured dip of 17 cents 10 minutes before market close. That's how the game is played, my friends.

Rob Maurer's Tesla Daily video on Wednesday presented the important stories:
* Tesla is giving a full $7500 discount plus 10K supercharger miles to buyers who purchase M3 or MY between 21Dec and 31Dec. IMO, this is a good move because vehicles will sell and yet the 10 day hit to margins will be not so bad.
* Turkey is being added as a Tesla sales location. This will necessitate superchargers and service centers. IMO, adding Turkey along with adding Thailand earlier should help Shanghai find homes for all its vehicles produced while the China demand is temporarily lowered due to Covid in a country that has yet to build its herd immunity. Tesla continues to expand markets as needed to keep the vehicles flowing.
* Tesla has announced layoffs coming in Q1. This news is normally met positively by Wall Street because it means eliminating unneeded personnel. In the case of Tesla, we see these layoffs about yearly, and they're a time to cut the least productive employees during a perceived slack time. Rob pointed out that it's not really a true hiring freeze because hiring continues where needed.
* On a Twitter Spaces talk Tuesday night, Elon mentioned that he thinks Twitter could hit cash flow positive sometime next year. That's huge news because it helps dispel the illusion that Elon will be continually selling TSLA shares to keep Twitter afloat. Here's a Tweet on the subject by Mathias Fons.

In this TMC post, @NicoV links to European deliveries showing Tesla's Q4 deliveries are its best ever in Europe

@Curt Renz pointed to this Benzinga article about Morgan Stanley saying that Tesla could leverage its costs advantages in EVs and make life very difficult for its competitors. IMO, at some point in Q1 Tesla might give an additional $3750 discount on its M3 and MY vehicles if the Feds are only offering customers half the expected $7500. Margins get negatively affected for a portion of a quarter, but Tesla still moves its vehicles and it'll be hard for the competition to make a nickel.

Bottom line: Wednesday was a manipulated day designed to keep TSLA under control, under 140, and to close at least a few pennies in the red. It worked on Wednesday, but with every dollar dip, TSLA becomes less attractive to sell and more attractive to buy. Tick, tick, tick.

View attachment 887742
10 yr. treasury bond yields remained about the same on Wednesday, closing just below 3.7%

View attachment 887738
Max pain Wednesday morning was 148. Strike 145 is pretty neutral between puts and calls but strike 150 and above are call-dominated

View attachment 887739
Wednesday's options volumes

View attachment 887741
With A LOT of help by the manipulators, TSLA has remained on a mostly downward trajectory along the lower bollinger band line. At some point sellers have to question the value of selling at these low prices, given Tesla's strong fundamentals.

Conditions:
* Dow up 527 (1.60%)
* NASDAQ up 162 (1.54%)
* SPY up 6 (1.50%)
* TSLA 137.57, down 0.23 (0.17%)
* TSLA volume 144.4M shares
* Oil 78.71
* IV 76.0, 94%
* Max Pain 148
* Percent of TSLA selling tagged to shorts: 47%

You’ve been a rock through good times and bad. I sincerely hope you keep your spirits up and know that you are loved and esteemed by an enormous community.

 

[Papafox]

You’ve been a rock through good times and bad. I sincerely hope you keep your spirits up and know that you are loved and esteemed by an enormous community.

Thanks! Such words mean a lot. I've just finished rolling my Mach23 leaps to Jun23 (except for a few stragglers) and I'm now rolling those Jun23s to Sept23. It's lots of work but it keeps the leaps at a comfortable distance away from the steam roller. I'll be fine.

 

[Papafox]

TSLA chart above

QQQ chart above

TSLA actually traded in the green for early pre-market but word came out that economic data looked good so of course the market panicked with Darth Powell fear and QQQ lost over 3% before a 1:30pm ish reversal. TSLA dipped more than 10% in early afternoon, which set off the SEC circuit breaker (also known as the alternative uptick rule), which makes it more difficult for short-sellers to push the stock down. Notice with the 12:38pm dip that tripped the circuit breaker that TSLA price improved from there while QQQ's bottom was at 1:33pm. If shorts wanted to cap, however, the alternative uptick rule really doesn't make much difference, and you can see that when QQQ began its rather robust recovery after 1:33pm, TSLA barely climbed. The 4pm closing cross showed 5.7M shares trading hands, much of it could be day-shorters covering. The big jump higher for TSLA in after-hours trading came when Elon in a Twitter Spaces interview said he was done selling TSLA stock certainly for a year and probably for two years. Elon spoke frankly on giving preference to production volume over profits if there's a 2009-style recession, and the best way to get a good overview of the interview is to take in this Rob Maurer Tesla Daily post. Highly recommended to understand Elon's point of view. He still believes Tesla will be the world's most valuable (or was it biggest?) company in 5 years.

I agree with @Right_Said_Fred that what we're seeing with TSLA right now is a downward spiral dip that has disconnected the stock price from Tesla fundamentals. Fear begets selling, which begets more fear. Further, I would compare this current dip with one or two of the most incredible rallies we've seen years ago when the stock price was running on momentum of purchased call options and ran much higher than any analyst price targets before making an abrupt correction. The difference is that the dip we're seeing at TSLA right now includes a sizeable macro component. It too will end.

I continue to follow two sales locations for Tesla. Model 3s were already getting scarce when the $7500 discounts were announced, but what really caught my attention was the speed at which the Model Ys disappeared from inventory. It was like: FLASH!

Big news to watch for Friday morning is the core PCE inflation report, which the Fed relies upon heavily. That report will get the market climbing or descending. Fingers crossed for the former.

News:
* @The Accountant says in this TMC post that Model Y even with the $7500 price reduction is still higher than the same vehicle sold in Q4, 2021
* @The Accountant in this TMC post says that megapack is sold out until Q3 2024
* Reuters reports that Elon says he won't sell any more Tesla stock in the next two years
* Tesla Tweeted that Model Y just broke the bestselling car record in Norway, held since 1969 by the Beetle!

Yields on 10 yr. treasury bonds thankfully remained level at below 3.7% on Thursday

Max pain Thursday morning was 145. Strikes of 140 and below are solidly puts, and so the market makers would benefit from a rally that could bring TSLA above 140 on Friday. Those growing put options require market makers to sell shares in order to stay delta-hedged.

Thursday's options volumes

Mercy, look at that volume: over 205M shares traded. Also notice that TSLA has traded red 12 of the past 14 sessions. The bears certainly have momentum, but the stock price has reached such a ridiculously low price in terms of P/E for a high growth stock that the buyer numbers are growing too. What we need is for the fear to calm down enough to give the buyers an edge over the sellers and push the stock price back up.

Conditions:
* Dow down 349 (1.05%)
* NASDAQ down 233 (2.18%)
* SPY down 6 (1.43%)
* TSLA 125.35, down 12.22 (8.88%)
* TSLA volume 205.4M shares
* Oil 78.46
* IV 89.9, 100%
* Max Pain 145
* Percent of TSLA selling tagged to shorts: 41%

 

[Papafox]

TSLA chart above

QQQ chart above

On Thursday TSLA descended to a greater than 10% loss at one point and triggered the alternative uptick rule. Immediately we saw TSLA stop losing ground and it started recovering with the macros. Unfortunately, the alt uptick rule doesn't prevent capping, and so TSLA's recovery on Thursday was minimal.

Come Friday, the PCE report was published an hour before market open, as shown below:

You can see that the Nov 22 month was the first month to break substantially below the other months, which were all above 6%. Core PCE came in about as expected. The market showed some trepidation initially but then both TSLA and QQQ rose. TSLA stayed in the green throughout market open and then we saw a big dip. If you look at pre-market being a good percent retail and market hours mostly being the big dogs, some big dog(s) is definitely still in selling mode. My guess? We learned over the weekend that Tesla is closing the Shanghai factory Dec24-Dec31. Speculation has been that lack of demand was the problem, but a more accurate appraisal would be that the demand pullback was related to COVID running rampant in China at present and GigaShanghai's reduction in production for a couple weeks leading up to Dec24 was primarily related to factory workers sick with COVID. Big hedge funds and investment firms often have paid informants in these factories, so I suspect some of the week's strong selling pressure was related to news about Shanghai that will affect the Q4 production and deliveries.

Why did TSLA do better on Friday than on Thursday? I think the answer is the same one as why it did better Thursday afternoon than Thursday morning, the shorts and hedge funds had to deal with the alternative uptick rule. They're not the main reason why TSLA falls on these high volume days, but they are a catalyst for downward movement with their big selling blocks shortly after open, pushdowns on low volume moments, and pushdowns into the close (or at least capping TSLA from rising with the macros).

The good news is that the zero-COVID policy of China has gone away, the country is rapidly gaining herd immunity, and the worst of this pandemic in China will be over soon. Once that's done, the economy is positioned to recover, Tesla will once again have full factory staffing, and the picture for China improves. Keep in mind with Tesla adding Thailand and Turkey as destinations for its GigaShanghai-built vehicles, there's additional demand going into the second half of Q1. Europe has been incredibly strong in Q4, and the recent price incentives offered by Tesla to U.S. buyers has resulted in demo vehicles being sold.

The year 2023 will be the year when the full $7500 IRA kicks in, along with an approx $4K payment by the U.S. to Tesla for every automobile battery they build, so profits and cash flow could be stunning.

We see signs that Cybertruck is becoming real in 2023.
* The Tesla battery team just delivered enough 4680 cells for 1,000 Tesla vehicles in a single week
* The huge press is being installed at GigaTexas
* Electrek says new robots are arriving in the U.S., presumable for the cybertruck production line

Expect a GigaMexico announcement in January. That announcement will help avoid concerns that Tesla is slowing down with its 50%/year growth.

There's much to be optimistic about as TSLA shareholders in 2023. First, though, we have to get past the current irrational selling of TSLA and see the price bottom out. Reuters released this report about GigaShanghai being closed for the final week of 2022, so Tuesday could potentially be a bit rocky for TSLA. As with anything Reuters produces, take it with a grain of salt. Don't hold your breath for a positive reaction to the Production and Delivery report, but the Earnings Report later in January should be a positive. Tesla energy is growing quickly, margins are going to do better than expected, both because of Shanghai, Berlin and Austin factory production increases and because investors will likely overestimate the impact of Tesla's incentives in the U.S. during December.

News:
* Twitter released a new Twitter Files on Dec25 but it is not the buzz of the media. Looks like for the moment the Twitter detractions are lessening

Yields on 10 yr. treasury bonds rose to about 3.75% on Friday

Max pain this past Friday was 135

Friday's options volumes

Max pain for Friday, Dec. 30, was 143

It's been quite a slide these past two weeks, with the dip started by Elon's selling. Glad no more of his selling for the next two years! This is what a chart looks like when investors are running on fear without regard to the company's value.

The TSLA stock price has obediently followed the lower bollinger band down.

For the week, TSLA closed at 123.15, down 27.08 from the previous Friday's 150.23. The P/E ratio of TSLA has gone beyond ridiculous for a stock that has been climbing about 50% per year. There's always a bottom when the company is highly profitable and growing quickly. Here's hoping you're spending the holidays with those you love. Zoom out to the bigger picture when times are painful. Tesla has a brilliant future ahead, and 2023 should be a year of significant recovery.

Conditions:
* Dow up 176 (0.53%)
* NASDAQ up 22 (0.21%)
* SPY up 2 (0.58%)
* TSLA 123.15, down 2.20 (1.76%)
* TSLA volume 166.1M shares
* Oil 79.56
* IV 87.7, 100%
* Max Pain 135 for past Friday, 143 for coming Friday
* Percent of TSLA selling tagged to shorts: 41%

 

[Papafox]

TSLA chart above

QQQ chart above

It was a tough day for TSLA. No research today. Until I get some sleep no comments to add. The one piece of good news is that the alternative uptick rule is in effect for Tuesday.

Yields on 10 yr. treasury bonds closed up at 3.85%

Percent of selling by shorts was a moderate 46%

Max pain Monday morning: 138. Just look at all those puts in the money

Monday's options volumes

Note the tremendous volume of 201M shares

Conditions:
* Dow up 38 (0.11%)
* NASDAQ down 145 (1.38%)
* SPY down 1.51 (0.39%)
* TSLA 109.10, down 14.05 (11.41%)
* TSLA volume 201.1M shares
* Oil 79.70
* IV 96.6, 100%
* Max Pain 138
* Percent of TSLA selling tagged to shorts: 46%

 

[Papafox]

TSLA chart above

QQQ chart above

Folks, we're in a war here, shorts/hedgies vs. longs. If longs can get momentum on their side, these ridiculously low prices for TSLA can go away. The victor of the momentum battle gets the gamma squeeze or negative gamma squeeze working in their favor. The thing is that the shorts and hedgies aren't giving up the downtrend without a fight! TSLA's strong performance compared to the NASDAQ, market hours and after-hours (see Yahoo post above) was 4.5% rise for TSLA and 1.35% drop for NASDAQ, a difference of 5.85%. The biggest positive for the longs is that the current price is utter ridiculous and a great buy. At least the purchasers of 220 million shares today believed so. Once the fear disappears the price will be far more important as a reason to buy or sell.

No doubt part of the reason why TSLA did so well on Wednesday was the alternative uptick rule being in effect. Don't be surprised to see the shorts/hedgies try a bear attack on Thursday now that they can short more effectively. OTOH, the strong after hours performance of TSLA bodes well for the Thursday open. Stay on your toes if trading.

I watched the trading carefully in the morning and want to note that the usual dip going into close turned into a spirited rise. That to me means that the bears couldn't gain control of TSLA going into the close, and that's a good thing. Manipulation failures are to me a sign of weakness for the other side.

Mathias Fons posted an important Tweet because it shows little or no correlation between Elon buying Twitter and Google searches for Tesla vehicles. Note that the recent 7.5K incentive offered by Tesla did spike the searches, though. This is bullish.

I researched this morning but did not this afternoon, so there could be important info not included here.

Yields on 10 yr. treasury bonds closed up at nearly 3.9% When yields get high treasuries compete with stocks for investors

Max pain Wednesday morning was 124. Look at that the 38K 100-strike puts. They numbered only about 29K the day before. Fear causes put buying by real long investors as well as speculative shorts. The market makers then sell shares to delta-hedge, which puts downward pressure on the stock. A turnaround day, such as Wednesday, is very helpful to keep those puts from growing.

Wednesday's options volumes

Just look at that massive volume: 220M shares! That's a great compliment to the strong TSLA performance vs. the NASDAQ.

Conditions:
* Dow down 366 (1.10%)
* NASDAQ down 140 (1.35%)
* SPY down 5 (1.24%)
* TSLA 112.71, up 3.61 (3.31%)
* TSLA volume 219.7M shares
* Oil 78.60
* IV 95.6, 100%
* Max Pain 124
* Percent of TSLA selling tagged to shorts: 44%

 

[Papafox]

TSLA chart above

QQQ chart above

The macros were happy on Thursday because of some somewhat negative employment data that is considered good news because it may influence Darth Powell toward reducing his planned interest rate. Remember: bad news is good news and good news is bad news.

Like I said, the shorts and hedgies were going to do their best to fight this reversal of momentum. Check out that dip right after market open. That's as far as the Mandatory Morning Dip got. They tried, though. Percent of selling by shorts rose to 50%, and so that's another indication of effort to lessen Thursday's rise. Then look at the very small and gradual decline in QQQ after 12 noon. This minor macro descent was the justification for a pushdown to keep TSLA below 120. If you check out the max pain charts below, you will see that 120 strike is heavily Call dominated. Thus, the market makers with the help of shorts and hedgies, was trying to hold TSLA below 120. Alas, going into the final hour of market trading, buying became just so intense that the pirates lost control of the cap and TSLA closed nearly at 122 (and went even higher after hours). Again, failures of the manipulators are a good sign for us bulls.

All in all, a very strong day for TSLA yet again.

Big news late in the day was the release of vehicle MSRP prices that allow those vehicles to qualify for IRA incentives. The suprise was that 5 seat versions of Model Y did not qualify for the $80,000 SUV MSRP. Relax, though, because the 7 seat version of Model Y does qualify for the $80,000 max MSRP. I think the result is that 5 seat Model Ys will still sell well abroad, but the 7-seat Model Ys will become the biggest sellers in the U.S. because of the full $7500 credit. Unfortunately for Ford Model E, it has no room for a 3rd row of seats and will not qualify for the $80,000 MSRP max. No surprises with Model 3, which needs a $55,000 max price to qualify for the incentives. Tesla will, of course, tweak models and pricing to make things work. For a quick summary of models, see this Electrek article or view this recent edition of Rob Maurer's Tesla Daily video podcast.

I would not personally put a bet on the Q4 Production and Delivery numbers, that should come available on Monday, Jan. 2. The whole business of estimating production and deliveries is a messy job and can be off 5% in some quarters. In Q4, 5% would be over 20,000 vehicles. OTOH, I'm guessing that Wall Street will be positively surprised by Q4 earnings and guidance. Tesla energy is really ramping up and Wall Street is pretty focused just on vehicles at the moment.

News:
* Teslarati says that in November Tesla Model Y overtook the VW Golf as Europe's highest selling vehicle (not just EVs!)
* Barron's wrote a hit piece by stating that Elon Musk had been margin called, but Elon never took out the margin loan to help pay for his Twitter purchase. Gary Black called out Barron's for the gross inaccuracy in this Tweet.
* This Tweet by Mathias Fons points out the huge decreases in the cost of raw materials needed to build batteries. Implications? First, Q4 should see nice reductions in costs associated with making batteries at Tesla. Second, you can better understand why Elon is talking about deflation now and the absurdity of the Fed raising rates going forward.

Thankfully, yields on 10 yr treasury bonds fell to about 3.82% on Thursday

Meanwhile, percent of selling by shorts rose to 50%. This is for FINRA exchanges. The day-shorters could be borrowing from non-FINRA exchanges and we have no clarity on that.

Max pain was 119 Thursday morning. Strikes 115 and 120 are call dominated now, with 112.50 about neutral. With the strong buying underway with high volumes, market makers may simply be unable to steer the Friday closing price to their preferred location. Looking at Thursday's chart, the max pain of 119 is close to where the market makers would like TSLA to head, since it is below the 120 call wall.

Thursday's options volumes

Nice bounce to nearly 122 on another 220 million share day. We've finally broken free of the lower bollinger band.

Conditions:
* Dow up 345 (1.05%)
* NASDAQ up 265 (2.59%)
* SPY up 7 (1.80%)
* TSLA 121.82, up 9.11 (8.08%)
* TSLA volume 219.5M shares
* Oil 78.74
* IV 91.1, 99%
* Max Pain 119
* Percent of TSLA selling tagged to shorts: 52%

 

[Papafox]

TSLA chart above

QQQ chart above

Another short post with limited research, my friends. Traveled long distance this weekend to deal with a time-critical matter. I'm not going to spend much time analyzing Friday's trading because it's largely irrelevant considering the big miss on Q4 deliveries.

Investors can do silly things with the stock price on Monday. For those HODLing with shares, the response is of course to keep HODLing. In my case I was leveraged with call options and didn't know for certain how the P&D report would go. I chose last week to move my calls into 50-strike, which I can continue to roll forward until the cows come home. The higher strikes simply became unworkable for single-day no-cost rolls.

TSLA will recover in stages as Tesla communicates how they're going to deal with the IRA and other challenges going forward. They need to show how this year's growth will occur, which shouldn't be difficult. When Powell finally declares that interest rates are high enough, there will be a positive market response, and when the rates start coming down there will be further cheers from the market. The second event may take a while. High growth stocks will be unfairly penalized until then. As for Tesla, showing how the company will deal with the IRA is a top concern. No doubt there are solutions to get a bigger selection of choices eligible for the IRA incentive.

Tesla's plans for an investor day on March 1 sounds like an effort to show the market what it has planned, including production lines and a third generation platform. We'll hear plenty of speculation going forward with what that platform is (hoping its the new lower-cost Tesla model). Long-term Tesla still looks great, short-term is challenging until the market sees Tesla's plan to keep growing at 50% with good margins and evidence of sufficient demand.

1Q of 2023 will have a tailwind with the large number of undelivered vehicles working their way through the pipeline.
Wishing all of you a happy new year.

Yields on 10 yr. treasury bonds ended the year at about 3.88%

Max pain on Friday was 120.

Friday's options volumes

For Jan 6, max pain is showing 124

TSLA's close above 123 on Friday put it more than $3 over max pain, showing yet another trading day when the MMs couldn't take control of pricing.

For the week, TSLA closed at 123.18, up 3 cents from 123.15. Hoping you all spent this weekend with someone you love. Let's take our medicine on Monday and get ready for a better 2023.

Conditions:
* Dow down 74 (0.22%)
* NASDAQ down 12 (0.11%)
* SPY down 1 (0.26%)
* TSLA 123.18, up 1.36 (1.12%)
* TSLA volume 156.4M shares
* Oil 80.26
* IV 90.2, 99%
* Max Pain 120 for past Friday, 124 for coming Friday
* Percent of TSLA selling tagged to shorts: 54%

 

[Papafox]

TSLA chart above

QQQ chart above

TSLA did indeed have a rocky Tuesday as the low delivery numbers was a beacon light for the shorts, hedgies, and skittish shareholders to overreact. In truth, growing from 343K to 405K deliveries in a single quarter was a big step forward for the company.

About 1pm TSLA bottomed out around 105 and then recovered to 108.10. This is a dip through the 109ish previous low, but the bounce back in the afternoon is encouraging. TSLA triggered the alternative uptick rule which was in effect during the afternoon recovery and will be in effect on Wednesday. Typically, we see TSLA do better when the rule is in effect. You can bet your bottom dollar that the shorts and hedgies were doing whatever they could to see TSLA go lower. Indications of manipulations includes over 7 million shares trading in the 4pm closing cross. They'll still be able to cap effectively on Wednesday, but pushdowns become more difficult. Despite their best efforts, we're once again reaching a price point where the buyers come out of the woodwork and we're going to have to put together a new bottom and recovery. Fingers crossed it happens on Wednesday.

Another observation: more and more I see QQQ responding to big TSLA moves. This is part of the reason why these deep dips go so deep, because the dip pulls the macro down, which in turn pulls the stock price down. The opposite can be true as well on an up day.

Regarding Q4, keep in mind that the cost of producing cars comes down as production goes up. TSLA may have delivered "only" 405K vehicles in the quarter, but the cost of the vehicles will be divided by the 440K vehicles produced. Looking forward to the Q4 ER on Jan 21.

Here's a link to the petition started by Farzad Mesbahi to fix the IRA EV bill. As of press time, there are nearly 23,000 signatures.

Teslarati did a very good writeup on the IRS request for comments on the IRA EV tax credit. Please take the time to read the article and then comment.

News:
* Electrek says Tesla has secured an agreement with Piedmont for a lithium supply

One small gift for the day was that yields on 10 yr. treasury bonds fell below 3.8%. Our other gift was oil prices falling.

Max pain on Tuesday morning was 124. Market makers don't want to pay out on all those 100-strike puts. OTOH, strikes 110-120 are pretty neutral.

Tuesday's options volumes

TSLA hit a new 52-week low with a close of 108.10. Intraday was lower. High volume shows that plenty of buyers materialized to scoop up the selling, but at firesale prices.

Conditions:
* Dow down 11 (0.03%)
* NASDAQ down 80 (0.76%)
* SPY down 2 (0.42%)
* TSLA 108.10, down 15.08 (12.24%)
* TSLA volume 229.9M shares
* Oil 76.92
* IV 85.7, 98%
* Max Pain 124
* Percent of TSLA selling tagged to shorts: 46%

 

[Papafox]

TSLA chart above

QQQ chart above

Congratulations, longs, TSLA had a good day and closed up over 5%. The close at 113.64 and with 178M shares traded suggests there's plenty of buyers at this price. The 4pm closing cross included 4.6M shares traded that minute, suggesting the day shorters and day-trading longs were busy covering at day's end. Remember, though, that Wednesday's trading was with the alternative uptick rule in effect. Thursday's trading will be a better test of whether the bottom is in or not. As a general rule, the shorts and hedgies don't give up without a fight.

On Twitter, Moneyball says insurance data shows that Tesla delivered only 4,338 vehicles between Dec26 and Jan1. Covid is still raging through parts of China such as Shanghai, and the Covid situation is going to need to improve before we see the numbers coming up again.

TMC's @Cosmacelf did a nice job in this post of compiling reactions by several analysts to Tesla's recent developments. Particularly interesting was seeing their methodologies for arriving at price targets.

Yields on 10 yr. treasury bonds dipped below 3.7% on Wednesday

Max pain Wednesday morning was listed as 114. Market makers want to keep TSLA above 105 and especially above 100, with 110 being a neutral strike price (puts close to calls) and 115 is dominated by calls.

Wednesday's options volumes

It's good to get a double-bottom near 109. The high volumes reduce the impact of manipulations. On Thursday we see how the stock trades with the alternative uptick rule removed.

Conditions:
* Dow up 133 (0.40%)
* NASDAQ up 72 (0.69%)
* SPY up 3 (0.77%)
* TSLA 113.64, up 5.54 (5.12%)
* TSLA volume 178.7M shares
* Oil 73.39
* IV 82.9, 96%
* Max Pain 114
* Percent of TSLA selling tagged to shorts: 49%