Papafox's Daily TSLA Trading Charts

[Papafox]

TSLA chart above

QQQ chart above

First off, the China deliveries implied by the past week of insurance registrations were very respectable at 15,866. That number adds another important data point pointing toward a strong 1Q23 performance. See chart below, and remember that a few more days of Q1 deliveries still remain ahead.

So, shouldn't TSLA have climbed to reflect this good China news instead of falling about 3X the NASDAQ's drop (1.37% vs. 0.45%)? In a perfect world, yes, but remember that the market makers believe that the purpose of TSLA is to enhance their weekly options sold earnings, which of course requires a little "help" sometimes. Fortunately for the market makers, shorts, hedgies, and other assorted Wall Street pirates, TSLA volume was a mere 97M shares and there's still fear of Powell and fear of bank failures in the air. Thus, TSLA continues to be fairly easy to manipulate even on a day with relatively good news for the company. Lots of effort was required, though. You can see from the chart immediately below that percent of TSLA selling by shorts rose to 68%, about as high as you will see it. Notice, too, that TSLA's low of the day was more than an hour removed from QQQ's low of the day. Translation: The 12:50pm-ish low of TSLA was not macro driven. Thank goodness the MMs lost control of the TSLA stock price and it recovered a large chunk of the day's losses before close.

Remember last Tuesday when the Moody's news came out and TSLA rose significantly higher? When sufficiently good news comes along TSLA will indeed rise and recapture a significant amount of value that the pickpockets have absconded with. Patience, my dear TSLA investors. More Cybertruck sightings in the wild followed by deliveries, breaking ground on the Mexico gigafactory, growth confirmation, and acceptable automotive margins will matter as the year progresses.

Percent of TSLA selling tagged to shorts rose all the way to 68% on Tuesday. That's the highest level reached during the January rally, implying heavy manipulations.

Yields on 10 yr. treasury bonds increased to 3.55% on Tuesday

Max pain Tuesday morning was 190 again. Puts and calls are about even at 190 strike, with calls dominating at 192.50 and puts dominating at 195. Right now, market makers really want to keep TSLA below 197.50, which is heavily call dominated and at the threshold of the mighty 200 call wall.

Tuesday's options volumes

Backing off to look at the big picture, TSLA concluded its dramatic comeback rally in early February and has been trading sideways (with one notable dip excursion) for nearly two months. Now only 3 more days remain for Q1 trading in a quarter that many believe will be a beat for Tesla. Tick, tick, tick.

Conditions:
* Dow down 38 (0.12%)
* NASDAQ down 53 (0.45%)
* SPY down 1 (0.22%)
* TSLA 189.19, down 2.62 (1.37%)
* TSLA volume 97.7M shares
* Oil 73.34
* IV 64.9, 52%
* Max Pain 190
* Percent of TSLA selling tagged to shorts: 68%

 

[Papafox]

TSLA chart above

QQQ chart above

Time crunch for me today: minimal research
Watching Wednesday's TSLA trading, it was pretty obvious that some entity is trying pretty hard to push TSLA lower. Market makers are of course a prime candidate, but other pirates such as hedge funds and short-sellers are suspect too because there's an excellent chance of a beat in Q1 and some of those betting against TSLA may have been trying to engineer a more desirable exit. Unfortunately for them, only two trading days now remain before the likely Production and Delivery report is revealed, and only one trading day remains before the PCE inflation numbers are released (which could potentially cause a macro rally if sufficiently cool).

As for whether the morning's dip was just a big dog fund manager selling shares, I wish to point out that the big dip after 10am did not show any reasonable resemblance to QQQ's dip. Fund managers don't sell a stock nearly as aggressively as the type of selling we've seen. A slow but steady decline is more their style because they of course want to maximize their selling price, not sink the stock like we see with these big dips. Fortunately, the macros rallied in the final two hours and TSLA closed up 2.48% compared to the NASDAQ's 1.79% climb. Without the aggressive morning pushdown, TSLA would likely have manages a 2X compared to NASDAQ.

Percent of selling by shorts remains extremely high at 67% and we saw 1.9M shares trade during the 4pm closing cross, both supporting the contention that some entity was shorting the "sugar" out of TSLA on Wednesday.

Percent of TSLA selling tagged to shorts remains in the stratosphere at 67%, indicating strong manipulations

Yields on 10 yr. treasury bonds closed at 3.55% on Wednesday

Max pain Tuesday morning was once again 190. At this strike, calls now greatly outnumber puts and market makers would really prefer to see TSLA below 190.

Wednesday's options volumes

TSLA has been trading so long in a narrow range that the upper and lower bollinger bands are squeezing inward. Notice how the blue 50 day moving average has been rising these past couple months.

Conditions:
* Dow up 323 (1.00%)
* NASDAQ up 210 (1.79%)
* SPY up 6 (1.45%)
* TSLA 193.88, up 4.69 (2.48%)
* TSLA volume 123.7M shares
* Oil 73.29
* IV 63.2, 45%
* Max Pain 190
* Percent of TSLA selling tagged to shorts: 67%

 

[Papafox]

TSLA chart above

QQQ chart above

Note: Although the TSLA chart looks choppy, that choppiness is mostly caused by TSLA trading in a very narrow price range throughout the day. Notice that QQQ rose in the final two hours of market trading. TSLA dipped noticeably in the final few minutes. Pickpockets again.

Thursday was yet another day in the saga of black candles and the market maker and hedgies quest for maximum profits on sold profits. For many good reasons, TSLA should have climbed the past two weeks and yet it has slumbered in the doldrums. When the option sellers are willing to push the percent of selling by shorts way up into the 60 percents, you end up with black candles, which are days when the stock price climbs (because of a gap up) but the closing price is lower than the opening price. Check out the tech chart at the bottom for a clear picture.

Because Tesla's stock can remain a sluggard even at times when the company is doing well and putting all the pieces in place to do remarkably well in the future, the sledge-o-matic can so often bring the stock price to close very near the max pain number come Friday afternoon. I have three suggestions: 1) Don't play weekly options in a rigged casino, 2) Listen to the advice of @StealthP3D that you should keep you eye on the trajectory of the company itself and not become too distracted by the short term stock price, and 3) Realize that in time the valuation of Tesla becomes clear as there's new info and the stock will make up for lost time in a most dramatic fashion.

Chances are that Friday will bring us more of the same, but then again, maybe not. The Fed relies heavily on the PCE inflation numbers and a new PCE report is coming out Friday morning before market open. A particularly cool report could energize the markets. Fingers crossed. OTOH, the anticipated Treasury Department ruling that since Model 3 RWD LFP batteries come from China, that vehicle will no longer qualify for the full IRA credit could provide the excuse for a TSLA dip.

News:
* Electrek reports that Tesla is rumored to be teaming up with CATL for a LFP battery factory in the U.S,, perhaps in Texas.

Percent of TSLA selling by shorts remained very high at 63% on Thursday, suggesting that substantial downward manipulation pressure on TSLA continues

Yields on 10 yr. treasury bonds closed near level with the previous day, at 3.55%

Max pain remains glued to 190. Puts strongly dominate below, calls strongly dominate at 197.50 and above.

Thursday's options volumes

What's interesting about the tech chart for the past two weeks is that there has been some upward movement, but almost all the gains come in black candles, meaning that the stock price gained but its closing price was lower than its opening price. What I think is happening is retail investors see the gains Tesla is making as a company and the stock price gaps up to start the day. Then the Wall Street types who benefit from a close near max pain turn on the sledge-o-matic and TSLA closes lower than it began. Rinse and repeat. Eventually news is too good and the pirates lose control of the stock price, then TSLA makes up for some of the lost time.

Conditions:
* Dow up 141 (0.43%)
* NASDAQ up 87 (0.73%)
* SPY up 2 (0.59%)
* TSLA 195.28, up 1.40 (0.72%)
* TSLA volume 109.5M shares
* Oil 74.28
* IV 63.0, 44%
* Max Pain 190
* Percent of TSLA selling tagged to shorts: 63%

 

[Papafox]

TSLA chart above

QQQ chart above

You gotta love a week like this. Options sellers kept the percent of selling by shorts at or above 60% every day as they worked to keep TSLA below 200 this week. Throughout the week, news from Europe suggested higher than expected deliveries, Monday's China numbers were good, and Friday would be the last day to buy TSLA prior to the release of the Production and Deliveries Report. Tick, tick, tick.

Fortunately for us longs Friday turned into one of those days when the Wall Street pirates couldn't hold TSLA back any longer and as the NASDAQ ran up 1.74%, TSLA added 6.24%. Percent of selling tagged to shorts was 60%, suggesting lots of manipulations, and trading during the 4:00pm closing cross exceeded 7 million shares in a single minute. Thus TSLA ran up not because the option sellers weren't trying to hold it back but rather because they were trying but couldn't hold it back.

The day began with a cool PCE inflation report of just 0.3% increase over the previous month, while expectations were for 0.4% and January's number had been 0.5%. That 0.3% works out to 3.6% inflation if you simply multiply the one month increase by 12. Not bad, and the trend continues downward. Here's CNBC's take. TMC's @Curt Renz posted here that CFRA raised its rating for TSLA from BUY to STRONG BUY while raising their target $25 to $275. Meanwhile, the Treasury Dept. pretty much repeated its previous guidance for IRA credits and set April 18 as the implementation date for new rules while stating that the list of which vehicles qualify will be release on April 17. Thus TSLA has half a month in Q2 to sell more RWD Model 3s before a likely reduction in credit takes place. Without anything to scare the market, TSLA soared on the final day of the quarter and partially made up for weeks of abuse by the Wall Street pickpockets.

All eyes are on the Production and Deliveries Report, likely to be released on Sunday. I may make another post to specifically comment on the results.
Here are a few 1Q23 guesstimates:
Troy Teslike: Production: 445,920, Deliveries: 427,000
Rob Maurer" Production: 439,835, Deliveries: 432,755
Gary Black: Deliveries: 424,000
Tesla IR Consensus: Deliveries: 421,500

Twitter link to above post

Percent of selling tagged to shorts has remained really high all week, suggesting a strong effort to avoid a significant climb of TSLA. It worked up until Friday and then buyers reasserted their control over the price for a fitting end of the week.

Yields on 10 yr. treasury bonds dropped after the cool PCE report, ending the week at 3.475%

Max pain Friday morning was 192.50, but the option sellers lost control of TSLA's price and it zoomed to 207.46. Notice how big that 200 call wall is.

Friday morning's options volumes

Most of the time recently the market makers can manipulate TSLA with downward pressure to get close to max pain on Friday's but as you can see, no cigar this week for the poor soul in charge of the sledge-o-matic. Chart by @JimS

For this coming Friday, 210 is the hot call wall. The dividing line between puts and calls is about 190, but that number only becomes relevant if the P&D report is disappointing or the macros do a swan dive.

You gotta love a big TSLA run when it finally escapes the market maker tractor beam. TSLA even managed to close $3 above the upper bollinger band. A cross above the 200 day moving average at 215.82 would be seen as yet another bullish development.

For the week, TSLA closed at 207.46, up 17.05 from the previous Friday's 190.41. Hope you're enjoying your weekend!

Conditions:
* Dow up 415 (1.26%)
* NASDAQ up 208 (1.74%)
* SPY up 6 (1.41%)
* TSLA 207.46, up 12.18 (6.24%)
* TSLA volume 169.3M shares
* Oil 75.67
* IV 61.9, 39%
* Max Pain 192.50 for 3/31, 190 for 4/6
* Percent of TSLA selling tagged to shorts: 60%

 

[Papafox]

Tesla produced slightly above expected production and delivery numbers in Q1. Here is the report from Tesla IR:

-----------------------------------------------------------------------------------------------------------------------------------------------
Rob Maurer was only about a thousand vehicles off on the production number. Gary Black was only about a thousand vehicles high on the deliveries. When you consider the following it was a good quarter:
* Q1 is historically the toughest quarter of the year (buyers typically don't want to pick up new vehicles in winter
* Q1 was a difficult quarter for vehicle sales in China
* Q1 was 2 days shorter then 4Q22 and included Chinese New Year factory stoppage

According to @NicoV in this post, the unwinding of the wave has occurred as follows:
* 3Q22 23K
* 4Q22 35K
*1Q23 18K
So, it looks like the increasing inventory at quarter's end is now getting smaller, which bodes well for Q2. Also, Much of the increase in inventory in Q1 came from a nearly 9K increase in S/X inventory. I suspect some price tweaking will take care of the excess S/X inventory in Q2 along with vehicles in transit to far away countries reaching their destinations.

As for Wall Street reaction, keep in mind that we may have seen speculators jump in on Friday, so expect some to jump out on Monday. Also, market makers really don't want TSLA above 210 for Thursday's close (Friday is Good Friday holiday), so there are constraints on TSLA's upside potential this coming week.

OTOH, Q2 could show solid gains as the inventory increase narrows and we would likely see the stock price run higher once Cybertrucks start rolling off the assembly line (hopefully before end of Q2). Berlin is at 5K/wk production now and there's pressure for Austin to catch up. With cool PPI and PCI inflation numbers during this month's reports, the Fed must be close to a pause in rates, and that pause will almost certainly take place in Q2. Wall Street will approve and TSLA and other growth companies gain a macro tailwind.

 

[Papafox]

TSLA chart above- Notice that NASDAQ has just begun giving us an extra 2 hours of after hours trading in the charts

QQQ chart above
OK, I have the picture now. Make yourself comfortable, open a cool adult beverage and let me explain.

When Tesla managed a slight beat of delivery expectations in Q1 (nearly 423K vs. 421.5K Tesla broad consensus survey), a few of the usual naysayers (Reuters, CNBC) ran with the "fell short of expectations" angle, quoting a flawed 432K number. Reuters later apologized for an error on the reporting. In actuality, the press had figured out a new, better way of degrading Tesla's accomplishment. The new theory went, "Tesla's deliveries increased slightly over 4Q22, but inventory increased much more. Therefore, Tesla has a demand problem and may have to do another price cut to keep the deliveries flowing."
Sigh. Fortunately, Farzad Mesbahi just put out a new video podcast that does a good job of adding context to the question of inventory growth. I believe he said that inventory grew from 13 days worth to 16 days worth at the end of Q1. Full video is well worth watching.

Comparing Tesla's inventory to that of other vehicle makers (Tesla in red) shows just how low 16 days of inventory really is. Then Farzad gives numbers showing that the vast majority of that inventory is either on trucks or ships, heading to its destination. Only a small portion is in showrooms. Let me add that as a suitable inventory becomes available at Tesla stores, sales increase. Without available inventory, people who need to make an emergency purchase ,"My car just died and I need a new one", or impulse buying, "Yes sir, we do have one Model Y in blue left, we could have it ready to go for you tomorrow" are out of luck. In other words, Tesla is on the way to reaching a healthy inventory level, and that is good. Keep in mind, too that two ships carrying S and X to foreign destinations were en route at quarter's end, depriving us of their delivery numbers in Q1 but adding to the Q2 totals. This doesn't sound like a demand problem to me, but that's the spin the media chose to pursue. Of course with higher total deliveries inventory has to keep increasing, but Tesla hasn't yet even hit optimal inventory in showrooms yet. The pirates didn't need Reuters and CNBC pushing that bogus 432K consensus number, and so the whole bunch switched to the fast growing inventory boogeyman that's going to necessitate more price cuts.

Part of the market bought the boogeyman argument and we saw a dip leading into market open. Traders who bought shares on the hopes of a big Q1 beat jumped out of the stock this morning to lick their wounds. Algos jumped aboard and the dip grew. How big a dip is just right? I'm glad you asked. Max pain Monday morning was 195, but Tuesday morning it will likely be 190 or 192.50. Magically, TSLA finished the day at 194.77. Of course the usual Wall Street pirates had to short in order to push TSLA down sufficiently and then short some more in a capping operation to keep it from rebounding too quickly when the NASDAQ started its afternoon recovery. This effort required percent of TSLA selling by shorts to be 55% and for the covering of the shorting to push the 4pm closing cross volume up to nearly 3.8 million shares in a single minute. We've been seeing recently about 80% of option closing dates with max pain and TSLA price closely aligned. I'm sure it's not coincidence. Nobody else talks about this, but you need to understand what's potentially going on here so that you can understand how TSLA can trade sideways for long periods before making a major run higher. It's all about option seller profits being maximized until TSLA looks so good the pirates can't hold it back any more and TSLA gallops upwards. This is the pattern we see again and again.

Ok, my rant is over. Toss the beer bottles in the recycling bin on your way out and it's been a pleasure sharing a little time with you.

News:
* In case you haven't heard, GigaTexas has reached 4K/wk Model Y production, as it works to catch GigaBerlin, which has reached 5K/wk rate
* This Tweet says that Goldman-Sachs just raised its price target from 200 to 225
* The hostile workplace lawsuit against Tesla brought by a single individual which originally was for $137 million was appealed and the new award is $3.2 million (which is a whole lot better for us shareholders)

Yields on 10 yr. treasury bonds continued their descent since the cool PCE prices came out Friday morning. That steep end of day dip brings the yield down to 3.415%.

Percent of TSLA selling tagged to shorts fell to 55% on Monday, indicating less but still very substantial manipulations

Max pain was 195 Monday morning, but I suspect it has decreased during Monday's $12 dip, which makes the day's close a few coins short of $195 to be on the side of 195 the market makers prefer. Tuesday's max pain could once again be closer to 190, so there's still room for a little downward tweaking of the price before market makers are feeling good about Thursday's close.

Monday's options volumes

Monday's dip brings TSLA back close to Thursday's close, before the cool PCE numbers elevated the stock price. Although the road has been rocky, notice that TSLA has been on an uptrend since it bottomed out in mid March.

Conditions:
* Dow up 327 (0.98%)
* NASDAQ down 32 (0.27%)
* SPY up 2 (0.38%)
* TSLA 194.77, down 12.69 (6.12%)
* TSLA volume 168.9M shares
* Oil 80.37
* IV 60.6, 34%
* Max Pain 195
* Percent of TSLA selling tagged to shorts: 55%

 

[Papafox]

TSLA chart above

QQQ chart above

TSLA was ready to recover some lost ground at open on Tuesday, exceeding 198 but then experiencing a big MMD pushdown. The market became concerned about a report of less than 10 million new job openings and the macros fell, pulling TSLA down with it at about a 2X multiplier.

For growth stocks, the weakening of the job openings is exactly the type of data we need to get Darth Powell to pause the rate hikes. He can now pat himself on the back, say my strategy is working, and then pause before creating any more carnage in the banking industry. Fingers crossed. The other shock to the market this week was an OPEC decision to cut output somewhat. This cut has pushed WTI crude over $80/barrel again.

Meanwhile, Rob Maurer was talking about the rumor out of China that the next generation vehicle will be like a small Model Y and that production will be set up for 4 million/yr. with Mexico producing 2 million and Berlin and Shanghai each producing 1 million. It's important to keep focused on where Tesla is heading, especially when the TSLA stock price is stagnant. With Cybertruck production line taking shape and a next generation Tesla Gigafactory about to be built in Mexico to produce EVs at remarkable price points, there's much to look forward to ahead.

News:
* Model Y configurator is now live in Turkey. Meanwhile, Tesla sales while Thailand has received thousands in a recent shipment. As GigaBerlin expands production, Tesla is opening new markets to absorb those Shanghai-created Teslas.

Check out the continuing drop of yields for 10 yr. treasury bonds. A little over a month ago yields were flirting with 4%. On Tuesday yields closed at 3.35%, a massive drop which speaks of both expectations for a Fed pause and eventual pivot as well as concerns about possible recession. Friday's cool PCE report got the ball rolling (Fed pause expectations) and this week's lower than expected jobs added report continued the downward trend (recession worries).

Percent of selling tagged to shorts came in right around where I was expecting, 51%. On the one hand, shorting was likely needed to keep TSLA safely below 200 after market open. On the other hand, once the NASDAQ started dipping due to the lowest jobs openings numbers in two years, it didn't take much effort to see TSLA descend at a 2X multiple of NASDAQ.

Tuesday's max pain remained at 195, but looking at the chart, the 190 strike is strongly puts, so MMs want a close above 190 on Thursday. Strike 192.50 is the least bad strike for the MMs but favors puts, and so the MMs would like TSLA a few pennies above 192.50, which is exactly where it ended up today. Whoever was working the sledge-o-matic for the prime market maker on Tuesday deserves a raise. Strike 195 isn't bad but is call dominated, so the sweet spot is between 192.50 and 195 according to Tuesday morning's chart.

Tuesday's options volumes

This week's trading is all about this weekend's P&D report and the market makers using that report to tweak the stock price to maximize their options sold earnings come Thursday close.

Conditions:
* Dow down 199 (0.59%)
* NASDAQ down 63 (0.52%)
* SPY down 2 (0.55%)
* TSLA 192.58, down 2.19 (1.12%)
* TSLA volume 126.5M shares
* Oil 81.03
* IV 62.3, 42%
* Max Pain 195
* Percent of TSLA selling tagged to shorts: 51%

 

[Papafox]

TSLA chart above

QQQ chart above

As we last left off, the rookie market maker assigned the sledge-o-matic duties for Tesla on Tuesday did a splendid job and brought the stock down to 192.58 in anticipation of Wednesday morning's max pain of 192.50. No doubt his or her fellow pirates took the rookie out for drinks after work as they contemplated their 2023 bonuses. Unfortunately for us longs and for the market makers as well, the NASDAQ went into a nosedive Wednesday morning after the number of new jobs added in the private sector came in light (see this CNBC artlcle). The market's reaction was to have a mild tizzy over the prospects that the economy might be weakening and we saw money moving from the NASDAQ to the more conservative Dow. NASDAQ closed down 1.07% and the Dow closed up 0.24%. NASDAQ Growth stocks got hit the hardest with TSLA down 3.67%, ARKK down 3.56%, AMZN down 2.74% and NVDA down 2.08%.

Keep in mind that the reduction in new private sector jobs is a karate chop to Darth Powell's pet peeve that labor demand and supply haven't been moving closer together.

Most of Wednesday's action with TSLA was growth-stock related. Nonetheless, percent of selling tagged to shorts came in at 49%, suggesting TSLA had some help moving lower than the other growth stocks. Market makers wouldn't have been doing the shorting (because the stock was moving into reward the put buyers territory). Perhaps the larger shorts themselves were at work giving TSLA a nudge in the hopes of scaring investors that a larger fall is coming or loading up in the hopes of more bad news coming. Such is the way things work with this stock.

Where TSLA ends up on Thursday close could be influenced by Thursday morning's maximum pain situation. I suggest visiting the max pain site for TSLA in the morning and seeing where the market makers would prefer for the stock to end up. They didn't try holding 192.50 on Wednesday, but on the final trading day of the week they tend to exert more influence than on other days of the week. Keep in mind that market makers are much less likely to push up by buying than push down by shorting (or naked shorting).

News:
* Master Plan Part 3 has been released and here's a link to the PDF
* This Tweet says that when Open AI's chartbox GPT-4 and Google's Bard were asked by the Financial Times to pick the top 5 stocks, they came up with similar choices but #1 in both cases was TSLA

Yields on 10 yr treasury bonds dropped below 3.3% on Wednesday. The day's private sector jobs added report suggested both a cooling of the economy and a greater chance of a cooling off of the Fed's hawkishness, too. Thus the move. I show a 6 month chart for perspective

Percent of selling tagged to shorts continued its decline to 49% on Wednesday, suggesting lessening manipulations but still a fair amount.

Max pain on Wednesday morning was 192.50, making Tuesday's close at 192.58 about perfect. Unfortunately, the macro beast roared and the plan for a 192.50 close on Thursday fell apart.

Wednesday's options volumes

For the first time in a long time, TSLA dipped below the mid bollinger band and the blue 50 day moving average. Let's hope for a recovery early next week.

Conditions:
* Dow up 80 (0.24%)
* NASDAQ down 129 (1.07%)
* SPY down 1 (0.26%)
* TSLA 185.52, down 7.06 (3.67%)
* TSLA volume 133.9M shares
* Oil 80.06
* IV 62.7, 42%
* Max Pain 192.50
* Percent of TSLA selling tagged to shorts: 49%

 

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TSLA chart above

QQQ chart above

What a week. On Monday we saw a big dip as TSLA was trading about $15 above max pain then came down to max pain as traders and some investors showed disappointment that TSLA only got a small P&D Report beat and not a big one. Tuesday and Wednesday saw the macros dip as employment concerns arose from new data.

Although the NASDAQ gained 0.76% on Thursday TSLA remained slightly in the red to close six pennies above $185. In the main TMC investors' forum, @Curt Renz looked at the options open interest and suggested the market makers would likely make their best profits this week at 185 close. I noticed that puts outnumber calls a bit Thursday morning for 185 strike and so a close six pennies above 185 was just about perfect. Coincidence yet again? I don't think so.

The big news this weekend was Tesla cutting vehicle prices across the board. Here's an Electrek.co summary of the cuts. To put things into perspective, @Singuy pointed out that these cuts bring the Model Y variants back down to their prices they were 2 months ago just before Tesla made a price increase after the big price decrease. There's also the addition of the shorter range GigaTexas Model Y with 4680 cells that was previously off menu but is now available on the configurator. The sky is not falling, but Mr. Market is very short-sighted and will likely punish Tesla on Monday for the cuts, worried that this is yet another of a long line of cuts that will be necessary as auto sales become more difficult with increasing interest rates and some economic weak spots popping up around the world. OTOH, Mr. Market tends to assume that price cuts translate strongly to lower margins without taking cost reductions into account. Tesla is just using its dynamic pricing to keep moving all its inventory, and with Berlin cranking out 5K Model Ys a week and Austin 4K (or more), volume is going to increase. For longer-term HODL investors, the price cuts are no biggy, but for retirees living on TSLA investments or people leveraged with options, it's a reminder that Elon is not focused on short-term stock prices with TSLA, he's looking to build a massive company that will reward investors richly in the future.

Regarding the Fed, it's important that the CPI and PPI reports before market open this Wednesday and Thursday be neutral or cool. Such results will put even more pressure on the Fed to halt the rise in interest rates. We've already seen some bank failures because of the rising yields (falling bond prices) on 30 year treasury bonds, and the latest concern is this Tweet by CarDealershipGuy as he suggests that Capital One is pulling inventory lines of credit for car dealers. We really don't know the scope of this rumor, but it could be yet one more unintended consequence of the Fed raising interest rates at such a crazy rate. Such developments should put pressure on the Fed to take a more conservative approach to inflation reduction. Fingers crossed. I look at Darth Powell as being way overconfident that the Fed can quickly undo damage to the economy should the economy go South.

Along with the short-term negative news there is of course long-term positive news for us TSLA investors. Tesla has announced a Megapack factory coming to Shanghai for energy products. This factory could possibly make serious use of CATL cells soon to be produced in Shanghai, as mentioned in this post by @Artful Dodger . Bottom line is that something other than vehicles is starting to grow quickly at Tesla, and that something is energy products.

Another positive development is that with Tesla bringing the 4680 version of Model Y into the configurator, the implication is that volume of 4680 cell production is at last high enough to cover the demand for cells in these vehicles (that should sell well). This is hugely important. The market will likely not understand the importance of this development.

News:
* Tesla co-founder JB Straubel has been nominated for a Tesla Board of Directors seat. Bravo!
* The Biden Administration is proposing tougher emissions standards for years 2027-2032

Yields on 10 yr. treasuries closed just above 3.3% on Thursday

Percent of selling by shorts dropped to 47% on Thursday. suggesting lower manipulations. Of course the shorting entities (market makers) could just borrow from dark pools or naked short and we'd never know the difference.

Max pain was 190 on Thursday morning. Notice that 180 strike was put dominated and 190 was slightly call dominated. A close just above 185 (which was somewhat put dominated) could well have been the sweet spot for the market makers on Thursday.

Thursday's options volumes

Yes, I had to put a red dot on 185 to mark it as the likely target of the market makers on Thursday. They succeeded in yet another highly profitable week, and I suspect their significant efforts on Monday of last week was primarily what made the bullseye possible.

For the coming week, 190 is max pain. Normally, I would say that higher max pain number should help us longs if TSLA loses ground on Monday, but option traders tend to adjust their bets to early week price changes and max pain could chase the price dip a bit. Max pain is more likely to be supportive late in the week, so don't hold your breath for much help from the MMs on Monday through Wednesday.

That uptrend we were enjoying through Friday of the previous week transitioned into yet another downtrend. The lower bollinger band is at 172.42 and could provide support should TSLA trading get funky on Monday. Also, you can see the March dip bottomed out in that vicinity as well, which adds additional support.

For the week, TSLA closed at 185.06, down 22.40 from the previous Friday's 207.46. Hoping you enjoyed your weekend with people who matter. The news for Tesla has basically been very positive long-term over the past week, but the market can't see that far. Our time will come once again.

Conditions:
* Dow up 3 (0.01%)
* NASDAQ up 91 (0.76%)
* SPY up 2 (0.39%)
* TSLA 185.06, down 0.46 (0.25%)
* TSLA volume 123.9M shares
* Oil 80.70
* IV 61.6, 36%
* Max Pain 190 for Apr6, and Apr13
* Percent of TSLA selling tagged to shorts: 47%

 

[Papafox]

TSLA chart above

QQQ chart above

As expected, we saw plenty of selling at, and leading into, Monday's market open as knee-jerk reaction investors equated a Tesla vehicle price cut with demand problems. At their morning lows, TSLA was down at 4.8% vs. QQQ's 1.5%, more than a 3X multiple. Fortunately, enough big investors put the news into context and started buying the mandatory morning dip. The result was a stronger recover than NASDAQ and QQQ were seeing, with the result being that TSLA was pushing the red/green line hard slightly after 2pm and most of the other indexes didn't get close until shortly before market close. Someone didn't want TSLA climbing much above 185, so it looks like capping employed, and a percent of selling climbing to 54% supports that theory.

Roland Pircher charted out Tesla's China sales and saw that with the CPCA data 23Q1 turned out to be China's best quarter yet.

Percent of TSLA selling tagged to shorts rose to 54% on Monday

Yields on 10 yr. treasury bonds took a jump above 3.4% on Monday morning and then slowly dipped to 3.4%

Maximum pain once again was 190 on Monday morning. Looks like the sweet spot for market makers would be around 187.50 at Monday open

Monday's options volumes

Saved by the lower bollinger band. At no time did TSLA dip below the lower bb during Monday morning's deep dip.

Conditions:
* Dow up 101 (0.30%)
* NASDAQ down 4 (0.03%)
* SPY up 0 (0.10%)
* TSLA 184.51, down 0.55 (0.30%)
* TSLA volume 142.2M shares
* Oil 80.31
* IV 60.5, 33%
* Max Pain 190
* Percent of TSLA selling tagged to shorts: 54%

 

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TSLA chart above

QQQ chart above

Despite the NASDAQ and QQQ remaining deep in the red on Tuesday, TSLA showed uncharacteristic strength at a time of macro weakness. For example, TSLA broke above 189 a bit after 11am while QQQ was near its daily lows. I think TSLA would have held onto its 2% gains if not for that deep dip of QQQ right before market close.

Wednesday is CPI inflation data release date before market open. The market is focused much more heavily than usual on this week's CPI and PPI reports because the market is hoping for a pause in interest rate hikes by the Fed, rather than the quarter percent raise we've been seeing lately. For this reason the market could be volatile for the remainder of the week.

News:
* In this video podcast, Farzad Mesbahi points out that with the latest data from China, Tesla Model Y outsold every other vehicle in China during Q1. He points out that Model Y was the most expensive vehicle in the list, as well as the most profitable. Has any vehicle ever taken all three titles simultaneously? Bullish. Model 3 was in the top 10 in March and top 15 in Q1.
* Teslarati tells us that Tesla's logo is already more memorable than that of Mercedes, Toyota, and Lexus. Without advertising, Tesla is building very strong brand awareness.
* Tom Zhu was awarded stock options worth some $200 million by Tesla, as listed in this Form 3.

Percent of selling tagged to shorts dipped slightly on Tuesday to 50%

Yields on 10 yr. treasury bonds closed at 3.43%

Max pain dipped from 190 on Monday to 185 on Tuesday. Looking at specific strike prices, 182.50 is a put wall some 20K contracts high now while 185 is a mixed bag with calls somewhat ahead of puts. 190 is now very solidly calls, so it makes sense for max pain to be a number less than 190.

Tuesday's options volumes

After 5 down days in a row, TSLA rose against the macro weakness on Tuesday. We saw signs on Monday that someone with deep pockets was buying TSLA and that theory was reinforced by Tuesday's unusual strength for TSLA.

Conditions:
* Dow up 98 (0.29%)
* NASDAQ down 52(0.43%)
* SPY up 0 (0.03%)
* TSLA 186.79, up 2.28 (1.24%)
* TSLA volume 115.8M shares
* Oil 81.57
* IV 60.3, 32%
* Max Pain 185
* Percent of TSLA selling tagged to shorts: 50%

 

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TSLA chart above

QQQ chart above

Wednesday morning we learned the CPI inflation numbers in pre-market and as you can see in the tall green spikes, the numbers were encouraging with CPI inflation year over year inflation down from 6% in February to 5% in march. Core inflation was not as cool but close to expected. Here's CNBC's take. Housing has accounted for 60% of the CPI's rise in the past year, but that stat is hugely lagging behind reality:
There’s been a “huge” moderation in newly signed rent agreements, said Paul Ashworth, chief North America economist at Capital Economics. But price changes generally take nine months to a year to flow into CPI reports, due to how economists calculate price changes in the housing category, he said.
Let that sink in.

As market hours trading began, both TSLA and QQQ began quick dips as apparently recession-worried investors took the rise as an opportunity to sell. QQQ recovered to the green through 2:20pm or so but TSLA got pushed lower all afternoon long. No specific negative news about Tesla was circulating, to my knowledge. TSLA's dip of 3.35% compares to the NASDAQ's dip of 0.85%, a nearly 4X multiple. NVDA closed down 2.48% after many strong climbs in recent days, AMZN down 2.09%, and ARKK down 2.89%. It looks like high flyers as a whole had a bad day.

I'm assuming the big dip in QQQ and the catalyst for steeper TSLA dip after about 2:20pm was related to the release of notes from the Fed's March meeting. One of the concerning statements was that Fed members believe the U.S. may enter a light recession later this year because of the banking crisis.

For Thursday, it'll all be about the PPI inflation report issued before market open.

News:
* Electrek says Powerwall 3 may be coming soon since Tesla is requesting approval from several utilities for a new version of Powerwall.

Percent of selling tagged to shorts rose to 58% on Wednesday,

Yields on 10 yr. treasury bonds remained level at 3.4% on Wednesday

Max pain Wednesday morning was 187.50, which was the apparent sweet spot as the 182.50 and 185 strikes are solidly put dominated while 190 was a tall call wall. You can see that call wall at 190 towering some 33K contracts high. When TSLA breached that level in pre-market trading the market makers were likely ready to assist its departure from that high a number.

Wednesday's options volumes

If you look at the past few months, many of the tall red candles (big descent from open to close) happened following a sizeable climb the day before. For this reason I think that days such as Wednesday are more a dynamic of short-term trading for profits rather than movements related to perceived value changes for TSLA. As a high-flyer stock, TSLA should have been down more like 2.5% on Wednesday.

Conditions:
* Dow down 38 (0.11%)
* NASDAQ down 103 (0.85%)
* SPY down 2 (0.41%)
* TSLA 180.54, down 6.25 (3.35%)
* TSLA volume 148.4M shares
* Oil 83.23
* IV 61.9, 39%
* Max Pain 187.50
* Percent of TSLA selling tagged to shorts: 58%

 

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TSLA chart above

QQQ chart above

TSLA got off to a rousing start (along with the rest of the market) when PPI Inflation data came in much cooler than expected (again). According to this CNN Business story, "US inflation at the wholesale level continued its downward slide in March with annualized price increases sinking dramatically to 2.7% from an upwardly revised 4.9%, according to the Producer Price Index released Thursday by the Bureau of Labor Statistics." On a month to month basis, the PPI dipped 0.5%. All in all, a great showing which puts more pressure on the Fed to hold the line with interest rates. The Fed holding the line on interest rates decreases the chance of recession, and Mr. Market was happy. The day's strength was in contrast to the market's initial rise then fade from the much less cool CPI numbers of Wednesday.

A bit past 11am TSLA kissed 186 and it was then that the whack-a-mole machine was turned on by one or more market makers. Whenever TSLA stuck its cute little noggin above 186 WHACK! came the mallet. QQQ didn't top out until after 3pm but TSLA didn't continue its climb because it was being seriously capped at 186. Percent of selling by shorts was only 53%, which tells me that MMs likely used other sources to enable their shorting, such as either naked shorting or buying from dark pools. More than 3.7 million shares trading hands at 4pm on an otherwise low volume day reinforces my capping belief.

How did other growth stocks fare? AMZN gained 4.67%, ARKK 4.01% and even AAPL was up 3.41%. Like I said, TSLA's climb was tempered by significant capping after 11am. It's all about market makers maxing their profits come Friday close. The good news is that TSLA is capable of escaping from the MM tractor beam when sufficiently good news comes forward. Patience, my friends.

Backing off to take a wider view of things, we have the general unpredictability of next week's Q1 ER creating tension. Zach told us that automotive gross margins should be above 20%, and I expect them to do so because I saw no huge surprises for TSLA in the quarter. Still, there's market jitters simply because the market hasn't seen an automaker cut prices so aggressively and still make decent profits. The ER will also be a chance to show the growth (and profitability) of Tesla Energy and for the team to shed light on the coming year. Don't miss it.

The other tug of war affecting TSLA investors at the moment is the fear of recession vs. the reality of Tesla's continued improvements and growth. In particular, the megapack business appears to be growing so quickly that it will soon be too big for analysts to ignore. Sightings of cybertrucks and apparent highland Model 3s also remind of the progress. Thus, there's a back and forth of market sentiment towards Tesla.

Don't let the Tesla naysayers fool you. Even though Tesla's market share has declined in the U.S. this year, it still is kicking the sugar out of the competition, delivering more vehicles than its closest 9 competitors. Market dominance? You bet!

Percent of TSLA selling tagged to shorts dipped to 53% on Thursday. Does this number give a valid idea of how much manipulations were underway that day? I believe no. The MMs have a strong incentive to keep TSLA below 190 for Friday's close and you can see consistent capping at 186 throughout the day. My guess is that the market makers either did some naked shorting that went unreported or they borrowed from the dark pools (non-FINRA reporting) in order to disguise the extent of the manipulations on Thursday.

Yields on 10 yr. treasury bonds rose mid-day but came back down to 3.4% for the close

Max pain was 185 Thursday morning, and I could have told you that without looking at the chart. Why? The market makers wouldn't let TSLA climb above 186, enforced by a relentless capping exercise from a little past 11am through close. Look at that call wall at 190, some 43K contracts tall. That's the incentive for the heavy-handed capping we saw for most the day.

Thursday's options volumes

Thursday's trading was all about upward pressure on growth stocks and capping at 186 by the market makers who are protecting those 190 strike calls that expire on Friday.

Conditions:
* Dow up 383 (1.14%)
* NASDAQ up 237 (1.99%)
* SPY up 5 (1.33%)
* TSLA 185.90, up 5.36 (2.97%)
* TSLA volume 112.7M shares
* Oil 82.57
* IV 59.6, 30%
* Max Pain 185
* Percent of TSLA selling tagged to shorts: 53%

 

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TSLA chart above

QQQ chart above

Wow, this week was a classic example of TSLA's price being tweaked to perfection by the market makers once again. They missed "effective" max pain last Friday by 6 cents but nailed it to the penny this past Friday. Here's how things shaped up:
* Monday, TSLA was trading below max pain
* Tuesday, Macros were red but TSLA traded in the green all day and closed $1.75 above the 185 max pain
* Wednesday, Macros got funky as the CPI results were digested and TSLA fell about $7 below the 187.50 max pain
* Thursday, Nasdaq closed up 2% and many growth stocks up 4%. TSLA only gained 3%, but by constraining TSLA it was now only 90 cents above MaxP
* Friday, Max pain remained at 185, TSLA followed NASDAQ in a dip early afternoon and then both shook off nearly all their losses to close at exactly 185. In all fairness to the MM rookie who missed max pain by 6 cents last week, this week's market maker rookie had an easier job. Tweaking TSLA's rise (with low volume, yet) in late afternoon roughly in line with the NASDAQ's rise was easy pickings.

My point continues to be that with a lack of substantial Tesla news, low volume, and with continued concerns about the economy (interspersed with positive data) we have been in a manipulation-friendly environment. Moving into the coming week, we may see upward or downward movement as positioning for this week's Q1 earnings report takes place. This is a truly important ER for Tesla, because it needs to show that automotive margins weren't hurt too badly (remain above 20%) even with the price cuts. Guidance for 2023 will be equally as important. Anticipate TSLA price volatility after the ER this week.

By now you might be thinking you could trade the market maker close on Fridays. Two cautions with this idea: 1) once a pattern emerges and traders start to play it, market makers and hedge funds chance the expected outcome and find a way to steal from the traders and 2) If QQQ had remained at 316 through close, or had dipped even lower, the market makers would not have made such a big move to get TSLA to 185. There are limits to what they're willing/capable of doing.

Yields on 10 yr treasury bonds rose to 3.5% on Friday

Shorts were tagged with 54% of TSLA selling on Friday

Max pain Friday morning was 185. Close was 185. Coincidence? Not a chance with that "coincidence" happening so regularly.

Max pain volume chart for Apr14 is missing this week

What a story this chart tells! Consider that the red dot was the effective max pain for the previous Friday. With that assumption, 4 out of the past 5 weekly market closings caught max pain or effective max pain within pennies. In an environment with low TSLA volumes and an underlying concern about the economy and interest rates, market makers find that manipulations are easier than normal. Take a look, too, at how often the max pain is set up nicely on Wednesday or Thursday for a Friday final tweak. Chart courtesy of @JimS .

For next Friday, April 21, max pain once again is 185. It's another one of those weeks where we have lots of overlap between puts and calls. Strike 185 is put-dominated and although 190 and 195 are call-dominated, the difference between puts and calls isn't tremendous, especially at 190 strike. Market makers are not likely on Monday to have a conniption if TSLA breached 190. More likely, we could see a move to 187.50 if it's an up day because 187.50 looks presently like the sweet spot between the 185 puts and 190 call-domination.

The past week brought lots of drama but virtually no price change because that was the result that best benefitted the option sellers.

For the week, TSLA closed at 185.00, down 6 pennies from the previous Friday's 185.06. Hoping you all enjoyed your weekends.

Conditions:
* Dow down 143 (0.42%)
* NASDAQ down 43 (0.35%)
* SPY down 1 (0.24%)
* TSLA 185.00, down 0.90 (0.48%)
* TSLA volume 96.4M shares
* Oil 82.45
* IV 58.3, 26%
* Max Pain 185 for both Apr14 and Apr21
* Percent of TSLA selling tagged to shorts: 54%

 

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TSLA chart above

QQQ chart above

On the surface, TSLA trading looked pretty normal on Monday as TSLA began the session significantly above QQQ and closed similarly above QQQ. TSLA's gain of 1.10% is about 4X the NASDAQ's gain of 0.28, and we saw TSLA reproduce the various macro dips during the day.

What makes the day strange is that quite a bit of shorting was going on and yet we weren't seeing the typical artifacts of manipulations. Percent of selling by shorts jumped up to 63%. My guess? I think we were seeing hedgies and shorts opening new positions in expectations that the ER will be negative and they will make money on the way down. The positive of course is that if the ER turns out to be well above expectations, some of those short positions get closed and the exiting of shorts from those positions adds to the upward momentum. OTOH, the negative is that if these short shares are being purchased by hedge funds, and the ER comes out slightly negative to slightly positive, they'll likely double-down with more shorting to project an artificial sentiment of Wall Street being disappointed with the results. We've seen that technique used previously. Such is the ways of TSLA trading.

News:
* The U.S. government has released a list of which vehicles qualify for how much IRA payment. Farzad Mesbahi covered the topic in this video podcast on Monday. His conclusions? Tesla and to a lesser extent GM are the two big winners. Tesla should be able to sell somewhere between 75% and 80% of EVs in the U.S. going forward. He believes Tesla is gearing up for maximum expansion.

Percent of selling by shorts jumped to 63% on Monday. Hmmmmm.

Meanwhile, yields on 10 yr. treasury bonds rose to about 3.6% on Monday. Pundits say strengthening economic data is making the Fed more likely to go ahead with a quarter point raise in early May.

Max pain Monday morning was again 185 strike is strongly put-dominated while 190 and above are call-dominated. 187.50 is neutral and looking like a sweet spot.

Monday's options volumes

TSLA has been trading in such a narrow range lately that you can see the upper and lower bollinger bands have squeezed together. That's likely to change after Wednesday's ER.

Conditions:
* Dow up 101 (0.30%)
* NASDAQ up 34 (0.28%)
* SPY up 1 (0.36%)
* TSLA 187.04, up 2.04 (1.10%)
* TSLA volume 116.7M shares
* Oil 80.95
* IV 55.6, 19%
* Max Pain 185
* Percent of TSLA selling tagged to shorts: 63%

 

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TSLA chart above

QQQ chart above

The big news on Tuesday was that Tesla unleashed yet another price cut in the U.S., with Model Y variants dropping $3K and Model 3 SR dropping $2K, according to this Electrek.co article. This ER is going to indeed be a nail-biter.

To give you a better idea of what analysts are expecting, here's a link to a Gary Black Tweet regarding the results of Tesla's survey of 24 analysts. Non-GAAP earnings per share is expected to be around 85 cents in Q1 and even though Tesla did not ask for automotive gross margin (AGM), analysts are expecting 21.1%. The metric Tesla prefers going forward, operating margin, comes in at an average of 12.3%. In light of Tuesday's price cuts, analysts will be asking how AGMs will be rising or lowering as the year progresses.

Regarding Tuesday's TSLA trading, we had 68% of selling tagged to shorts, which suggests the results were definitely impacted by shorting. Over 2 million shares traded hands in the 4pm closing cross.

What we need to see from Tesla is both a beat on the numbers and reassurance on margins going forward this year. Guidance on margins will be even more important than the actual earnings, so the conference call could become a very important component of the ER.

Percent of TSLA selling by shorts rose to 68% on Tuesday, about as high as you ever see.

Yields on 10 yr. treasury bonds closed at about 3.58%

Max pain Tuesday morning was again 185. Once again, 185 is put-dominated, 187.50 is about neutral, and 190 and above are call-dominated.

Tuesday's options volumes

Mostly level trading near 185 as the market awaits the ER results and commentary.

Conditions:
* Dow down 11 (0.03%)
* NASDAQ down 4 (0.04%)
* SPY up 0 (0.07%)
* TSLA 184.31, down 2.73 (1.46%)
* TSLA volume 91.3M shares
* Oil 80.77
* IV 55.8, 20%
* Max Pain 185
* Percent of TSLA selling tagged to shorts: 68%

 

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TSLA chart above

QQQ chart above

Tesla traded slightly worse than QQQ during market hours, with the exception of the final 20 minutes when TSLA took an oversized dip. With 61% of the selling tagged to shorts, there was once again plenty of shorting going on, but rather than being the usual manipulations it looked to perhaps be more taking positions. The past 3 days contrasted with this report by Ihor Dusaniwsky that showed over 3 million shares of short covering in the weeks leading up to the ER. I fully expect the shorts and hedgies to try to accelerate the post-ER dip.

The ER provided roughly expected GAAP and non-GAAP earnings, but automotive gross margin came in at 19.3%, which was below the magical 20% and TSLA turned into a toad in the eyes of Wall Street. My personal feeling is that the ER results in themselves were pretty decent and the dip immediatley afterwards was overdone. Nonetheless, in the conference call, Zach was pressed to predict automotive gross margins going forward and he chose not too, saying there were too many variables in play. Truthfully, Tesla is lowering prices as needed to move the inventory in an unfriendly economic environment,, and Elon said Tesla will shoot for 1.8 million vehicles in 2023 with a shot at 2 million. He made it known that growth would be the priority over profits during this time of economic uncertainty and higher interest rates. He stated that earning less now would be rewarded with higher volumes so that when FSD and Robotaxi became reality, Tesla could profit significantly from the vehicles then. I cringed because Wall Street is extremely pessimistic about FSD. For this reason I think we have more downward movement to go and each additional price cut will likely produce additional downward movement of the stock price. OTOH, the solution would be FSD coming to maturity, but few investors believe Elon when he says it could happen in 2023. A more likely reprieve would be decreasing interest rates and the expected recession bottoming out, but that too could be a ways off. Looks like we will have tough sledding for multiple quarters. There is of course still a strong future for Tesla and ultimately for TSLA the stock, but today's ER set back the timetable.

I suggest viewing this video podcast by Dave Lee, which gives a reasonable assessment of the situation.

Once again, Elon showed that he's thinking long term and he gives no consideration for those trading options or using TSLA stock for funding retirement living. Investor beware.

News:
* Kevin Yang Tweeted that a leaked email says Tesla will not be cutting prices in China as it is in the U.S. and Europe
* Electrek repeated Elon's words that Cybertruck deliveries would begin at the end of the 3rd quarter

Shorts were tagged with 61% of TSLA selling on Wednesday, indicating lots of shorting activity.

Yields on 10 yr treasury bonds closed just below 3.6%

Max pain was 185 Wednesday morning. It will be dropping as the week progresses. Hopefully, the put wall at 165 will catch the decent. The more robust put wall at 150 awaits, just in case.

Wednesday's options volumes

Market trading hours saved by the lower bollinger band. That would all change after hours.

Conditions:
* Dow down 80 (0.23%)
* NASDAQ up 4 (0.03%)
* SPY 414.14, down 0 (0.02%)
* TSLA 180.59, down 3.72 (2.02%)
* TSLA volume 110.8M shares
* Oil 78.88
* IV 57.7, 25%
* Max Pain 185
* Percent of TSLA selling tagged to shorts: 61%

 

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TSLA chart above

QQQ chart above

Correction: On Wednesday I spoke about the 165 put wall as a deterrent to the stock's decline. Looking at Wednesday's max pain chart, I see that put wall was at 160, not 165. This is important because TSLA got within 61 cents of 160 on Thursday and then bounced slightly. We still see a formidable put wall at 160 in the chart below and an even bigger put wall at 150, just in case.

After Wednesday's conference call where Zach declined to forecast auto gross margins going forward and Elon spoke of eventual FSD maturity as the remedy to AGM erosion, Mr. Market was clearly not happy with these answers and so we longs took our medicine today with a 9.75% decline in TSLA. Fortunately, the final hour's dip brought TSLA below 10% loss at one point, tripped the alternative uptick rule circuit breaker ($180.59-$18.06=$162.53) , and TSLA's price improved afterwards. That circuit breaker will be active on Friday as well, which should help minimize the manipulative selling by shorts and hedgies. Volume was high at 211M shares, which speaks of both plenty of selling but also plenty of buying, as well. A full 4.8M shares traded hands during the 4pm closing cross. Percent of selling by shorts was an elevated (but not extreme) 53%.

Macros were red on Thursday, in good part because TSLA's dip scared the broader markets.

Analysts cut TSLA target price from $5 to $50 following the Q1 ER conference call. They don't like depending on FSD to mature, they didn't like Elon saying that AGMs could go to zero and it would still make sense to produce max vehicles, and they don't like a lack of guidance for AGMs, going forward.

Balancing those negative changes to price targets, Tasha at ARKK Invest just issued a $2000 price target for TSLA. ARKK was the only firm that predicted the extent of TSLA's big run higher a couple years ago.

As investors, our challenge is to get the best handle on where the stock price goes from here. Powell's do anything to achieve 2% inflation approach to the economy will result in either higher interest rates than what we currently see, a recession, or both. My feel is that Tesla's decline in orders was far more related to economic factors of buyers (fear of recession, higher auto rates) than to concerns about Elon's Tweet. At least a few quarters in 2023 was heading for tough sledding for the auto portion of Tesla, and management chose to cut vehicle prices rather than cut production.

The three questions we need to think about are:
* What's the bottom of the immediate dip?
* What events will cause TSLA to fall more?
* What events will cause TSLA to climb?

For the immediate dip, let's see if the 160 put wall can hold on Friday now that the shorts have had a tool removed. Tesla's ER is over and it shouldn't be pulling the NASDAQ down on Friday.

I'll give some ideas on the other two questions during this weekend's report.

Yields on 10 yr. treasury bonds fell to 3.54% on Thursday

Max pain dipped slightly to 183.33 by Thursday morning (before the nearly 10% stock price drop). It'll be lower Friday morning, but pertinent put walls are more important and max pain is mostly irrelevant at this point in the dip.

Thursday's options volumes

While the lower bollinger band just chases the stock price after Thursday's big dip, the 160 strike put wall was not breached.

Conditions:
* Dow down 110 (0.33%)
* NASDAQ down 98 (0.80%)
* SPY down 2 (0.55%)
* TSLA 162.99 (9.75%)
* TSLA volume 211.0M shares
* Oil 77.29
* IV 51.2, 5%
* Max Pain 183.33
* Percent of TSLA selling tagged to shorts: 53%

 

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TSLA Chart above

QQQ chart above (chart was gorked in after-hours trading and so this is the fallback image)

Friday's TSLA trading was a breath of fresh air after Thursday's nearly 10% fall. The alternative uptick rule was in effect, (shorts had their hands tied), and the market makers were busy doing their usual end of week adjustments to maximize profits from option sales. For these reasons it's too soon to conclude the immediate bottom is in but there is hope.

Percent of selling by shorts was moderate-to-low at 49%. Still, the manipulations were apparent as TSLA plateaued at 165 shortly after noon and then as excursions above 165 were brought down to 165 multiple times and especially for the close. I'd say that TSLA looked to be ready to climb higher than 165 on Friday but the option sellers had over ideas.

What matters most is where TSLA goes from here. The Q1 earnings results matched analyst expectations, but the new reality of Tesla willing to trade margins for volume splits investors into two camps:

The Dead Money Camp
With a strong possibility of declining Auto Gross Margins in future quarters, this camp consists of traditional analysts and fund managers who use AGM and deliveries to compute profits and then use P/E (profit to earnings ratio) plus a growth component to compute the value of the stock. These types are more concerned about TSLA in the future than the recent analyst downgrades suggest. Analysts are for the most part chickens and they'll let someone else stick their neck out while they make predictions that respond to the stock price. In their mind, if AGMs are decreasing, so will the P/E ratio, and for a long time, possibly years, money invested in TSLA will produce no positive returns. They're ready to follow the herd by lowering their price targets to move closer to the stock price any time Tesla lowers vehicle prices again or delivers a smaller profit in an ER.

The Brilliant Future Camp
The other extreme is entities that see Tesla's enormous lead in manufacturing plus EV and battery technologies. They typically realize that Full Self Driving will eventually become a significant marketable asset. They follow Munro and Associates and realize that the $25K EV of the future will be coming in a few years and with decent margins. The lead here is ARKK Innovations, which has recently given TSLA a $2000 price target for 2027. You also have more traditional analysts such as Alex Potter with his $300/share target. These optimists see Tesla's future as very bright with a short to medium term hurdle as buyers endure higher interest rates plus fear of a recession.

Inevitable Volatility
With two completely different expectations for TSLA's valuation, you can expect increased volatility. When the stock price is moving down, sentiment gravitates to the deal money camp, and when the stock price is rising, sentiment changes into FOMO and a more serious look at the brilliant future camp thesis.

Factors Favoring the Dead Money Camp
* Every Tesla vehicle price cut leads to recomputed P/E ratios and recomputed lower price targets that more closely match the resulting TSLA price decline
* Every AGM decrease in an ER
* Projections of Tesla delivering less than 1.8-2.0 million vehicles in 2023
* Tesla stock price decreases for all reasons
* Continued interest rate increases by the Fed (because this means more consumer fear as well as higher financing costs for new vehicles)
* A recession (because people buy fewer vehicles in recessions)
* Anything that gives the impression that TSLA is toxic (Elon over-the-top comments, stock sales by Elon, etc.)

Factors Favoring the Brilliant Future Camp
* Higher than expected Tesla vehicle deliveries
* Any price increases or a long period of time before next price cuts
* Growing Tesla Energy revenues and margins
* Factors that show that dropping AGMs will not necessarily drop profits proportionally. Tesla Energy contributions is one input, realizing approx $600 million in deferred revenue in 2023 (including deferred FSD income) is another.
* Cybertruck deliveries beginning on time (before end of Sept.)
* Progress with 4680 cell production by Tesla
* Progress realizing IRA payments for Tesla-produced batteries and cells
* Interest rates topping out and then declining
* A long or sizeable recession being avoided by Darth Powell cutting rates soon enough

Factors to Watch
* Progress with FSD. I am a beta tester and see a noticeable improvement with Ver. 11, but with exceptions. Some of the exceptions include navigation regressions, but I see these as manageable issues while the big issues are tackled. I'll report perception changes in my experience going forward.
* Interest rates and the economy
* Pace of deliveries
* Speed at which 4680 cell production is speeding up

Special Considerations for Retired TSLA Investors
* I need revenue from my IRA to continue my retirement. The problem is that I've been invested only in TSLA and we could see a potentially-sizeable dip between now and the time the economy starts improving or FSD starts showing its inevitable promise. My solution has been to over time increase my cash or cash-equivalent balance so that I am not in need of selling any Tesla holdings for the next three years. The majority of my Tesla investment will remain. For deep in the money call options, I will be concentrating on 50-strike calls with expiration dates in 2025.

Discussion
If you wish to discuss these thoughts, please take discussion to the main investors' thread

Percent of selling tagged to shorts fell to 49% On Friday, suggesting a noticeable decline in manipulations

Yields on 10 yr. treasury bonds fell to about 3.54% on Friday.

Max pain Friday morning was 170. Looking closer, you can see that 165 was neutral but ever so slightly put-dominated, 167.50 was barely call-dominated, and 170 and above were call-dominated. For these reasons, 165 looked like a profit-enhancing choice for the options sellers and the daily trading showed the fingerprints of their directing TSLA to 165 on Friday.

Friday's options volumes

We continue to see close proximity with Friday closing prices vs. max pain or effective max pain. The current economic environment provides the manipulators with a fear-factor for pushing lower, and Tesla's long-term strengths provides an incentive needed for pushing higher. Mostly, the MMs work at capping and pushing lower. Here's a chart with the two red dots for "effective max pain" included. As you can see, with one exception the MMs have been nailing the most profitable end of week closing price. This is not coincidence. Chart courtesy of @JimS .

For this coming Friday, max pain is once again 170.

If TSLA could level off for a couple days, the lower bollinger band could catch up and provide some support again.

For the week, TSLA closed at 165.08, down 19.92 from the previous Friday's 185.00. It's been a fatiguing week. Be sure to use the weekend to recharge with the ones you love.

Conditions:
* Dow up 22 (0.07%)
* NASDAQ up 13 (0.11%)
* SPY up 0 (0.08%)
* TSLA 165.08, up 2.09 (1.28%)
* TSLA volume 123.5M shares
* Oil 77.87
* IV 47.3, 0%
* Max Pain 170 for both 4/21 and 4/28
* Percent of TSLA selling tagged to shorts: 49%

 

[Papafox]

TSLA chart above

QQQ chart above

Severely time-constrained this evening, no commentary, no research.

Good news is that the truflation index at truflation.com worked through a temporary increase in inflation and is now setting a new low for the year of 3.86%

Yields on 10 yr. treasury bonds fell again and are now back to about 3.5%

Monday morning's max pain was 170

Monday's options volumes

The stock price closed below the lower bollinger band

Conditions:
* Dow up 66 (0.20%)
* NASDAQ down 35 (0.29%)
* SPY up 0 (0.10%)
* TSLA 162.55, down 2.53 (1.53%)
* TSLA volume 140.0M shares
* Oil 78.77
* IV 46.4, 0%
* Max Pain 170
* Percent of TSLA selling tagged to shorts: 52%