Papafox's Daily TSLA Trading Charts

[neroden]

Sorry to be on the other side from you, but I'm hoping we see more shorts moving in, rather than covering. The result of my trades with SCTY is that I've ended up with a lot more straight-up TSLA stock (as opposed to the short puts I've been handling for the last couple of years). Which is great, but I wanna lend out my shares and get interest.

See, I wanna make some short-term income here, and I'm unwilling to sell covered calls at a strike less than $1000, which are shockingly not being bought or quoted.

 

[Papafox]

Today we saw sector rebalancing again. I'm guessing that the OPEC deal led to money flowing back into oil and gas stocks, and other stocks that will benefit under Trump (such as banks) also received a boost. Thus, the DOW was up and the NASDAQ was down. About 2pm ish, vgrinshpun published a chart of Fidelity TSLA short drawdown vs. covering and is showed little short drawdown at this point, which further suggests an explanation other than shorts. However, after 2pm TSLA took a steep, deep dip that other tech stocks did not. The dip could have been caused by shorts taking advantage of lower volume on a down day when buyers are already cautious, or it could be because of misinterpretations of yesterday's Inside EV delivery numbers within the U.S. I suggest that it's possible that the short percentage numbers at www.shortanalytics.com could suggest one explanation over the other, and I'll report these numbers if they look convincing, one way or the other.

We have recently seen TSLA suffer from portfolio rebalancing, and we have seen TSLA recover fairly quickly and run to nearly 200. Let's hope our recovery from this episode is even quicker. It may not be because the dip caught a number of new investors to TSLA. The next group may require more positive news to come forward in this volatile environment.

Conditions:
* Dow up 68 (0.36%)
* NASDAQ down 73 (1.36%)
* TSLA 181.88 down 7.52 (3.97%)
* TSLA volume 5.1M shares
* Oil 51.14, up 0.08 (0.16%)

 

[Navin]

Run Forrest run

 

[Papafox]

On Friday, www.shortanalytics.com pointed out that 64% of TSLA transactions on Dec. 2 were conducted by short-sellers. Longs barely made up a third of the trading done. Just as with two days ago, the large percentage of trading done by shorts on a day with nearly flat stock price change suggests that besides the robust short-selling, some covering by shorts took place, too. I suspect just as with Wednesday, the late-afternoon rise was mostly propelled by shorts covering

Most likely, the shorts were trying to push TSLA below 180 to create a fear that would propel more longs to sell, but we found plenty of buyers in the low 180s and so TSLA held its ground.Notice the large selling events at about 9:45am and 11:35am.

If there's a pattern emerging, it is that shorts are really challenged pushing TSLA much below its current level (unless some bad news or big macro event intervenes), Shorts have shown no willingness to back off on their significant strategies, but their efforts require considerably more effort than before the SCTY merger approval announcement. They have, moreover, been successful defending a crossing back above 200. We may need Q4 delivery numbers release or other substantial news from Tesla to return to the right side of 200.

In other news, Model S deliveries for U.S. customers are now pushed back to March, and so we likely are seeing very robust demand, which portends well for the Q4 delivery numbers, ER, and guidance delivered during that ER, particularly when you consider that Tesla Energy numbers are going to be substantial in 2017.

A mixed green and red day suggests we are transitioning from one pattern (down days) to another pattern (up days). I'd expect shorts to try a big mandatory morning dip, but there's so much buyer interest at this price point that I suspect it would not be successful for long.

Conditions:
* Dow down 22 (0.11%)
* NASDAQ up 5 (0.09%)
* TSLA 181.47, down 0.41 (0.23%)
* TSLA volume 4.0M shares
* Oil 51.68, up 0.62 (1.21%)

 

[Papafox]

Here's what's going on now, as best as I can tell. If you look at the short data from Fidelity that vgrinshpun posted today, Short-Term TSLA Price Movements - 2016 , you will see the shorts took out over 80,000 shares to short this early morning and the mandatory morning dip at around 10:00 am was the result. Buyers then overpowered the short sellers and the stock started marching up to exceed 188 at one point. Shorts started covering to protect themselves and so at noon we only had about 25,000 net shares drawn down. I suspect the shorts have been using shares in the afternoon, though, and here's why. From about 2:00 pm until about 2:30 pm, TSLA did a very orderly march down in the lower volume hours, which is consistent with the short strategy of walking the SP down in low volume afternoons. At about 2:30 pm, the buyers started resisting the push-down and so the shorts started capping operations just below 187. Thus, they're using ammo in the afternoon to minimize the damage. The big question is whether we'll see an upward push in the last half hour of trading like we saw twice within the past week.

 

[Papafox]

Well, what do you know, we saw an upward trend in the last half hour of trading. Who could have guessed? Also, the green-red fluctuation on Friday with a robust turn upward at end of day served us well as a warning that today could be an up day.

The buying spree at 10:09 am was for 33,000+ shares and the one at 10:33 am was for 31,000+ shares.

Conditions:
* Dow up 49 (0.24%)
* NASDAQ up 53 (1.01%)
* TSLA 186.80, up 5.33 (2.94%)
* TSLA volume 3.9 M shares
* Oil 51.08, down 0.6 (1.16%)
* News: Analyst Trip Chowdhry reported after touring the Tesla factory that 25,000 deliveries would be easy this quarter, with higher GMs likely due to high uptake of glass roofs on Model S vehicles and high uptake of various autopilot 2.0 software options.He reported double the truck activity compared to December of last year.

 

[TMSE]

View attachment 204711

Here's what's going on now, as best as I can tell. If you look at the short data from Fidelity that vgrinshpun posted today, Short-Term TSLA Price Movements - 2016 , you will see the shorts took out over 80,000 shares to short this early morning and the mandatory morning dip at around 10:00 am was the result. Buyers then overpowered the short sellers and the stock started marching up to exceed 188 at one point. Shorts started covering to protect themselves and so at noon we only had about 25,000 net shares drawn down. I suspect the shorts have been using shares in the afternoon, though, and here's why. From about 2:00 pm until about 2:30 pm, TSLA did a very orderly march down in the lower volume hours, which is consistent with the short strategy of walking the SP down in low volume afternoons. At about 2:30 pm, the buyers started resisting the push-down and so the shorts started capping operations just below 187. Thus, they're using ammo in the afternoon to minimize the damage. The big question is whether we'll see an upward push in the last half hour of trading like we saw twice within the past week.

Is it safe to assume that today's rally is not short covering? If I understood your post correctly, shorts still increased their short position about 25k net today. Right?

I hope rest of the month turn out to be like today or better with both shorts and longs increasing their position, all the while stock goes up.

 

[Papafox]

Is it safe to assume that today's rally is not short covering? If I understood your post correctly, shorts still increased their short position about 25k net today. Right?

I hope rest of the month turn out to be like today or better with both shorts and longs increasing their position, all the while stock goes up.

Looking at the shortanalytics.com chart for today, they show a mere 40% short participation in transactions, which is about where you'd expect it on a day with large gains. With 60% of transactions involving longs, buying by longs was indeed the principle reason for TSLA going up today. I think we've seen TSLA get pushed down to about 180ish twice in the past month or so and both times it bounced back nicely. I think longs have figured out that the upside significantly exceeds the downside when you're at such a low price point. We really saw the stock drop from 196ish to 182ish with two really tough days: Nov29 and Dec1. Nov29 was a combination of FUD and short-selling while Dec1 was sector rebalancing with perhaps a short push at the end of the day. We're going to see fewer sector rebalancings in the future, so we need not anticipate a visit by this ghost in the near future.

I believe that we'll start working our way back towards the high side of the 180-198 range. The shorts haven't at all given up, though, and it may take some good news or strong momentum to get back into the 200s before the Q4 delivery numbers are released. The good news is that the shorts get defeated when using their tactics most days now (since the SCTY merger date) and their power is definitely in question as longs get enthused about TSLA again.

 

[neroden]

Sadly, if the shorts don't pile in in a big way, I don't get to earn money from lending out stock. And I was really enjoying that. Of course I hope longs pile in to keep the stock price up, but I also want crazy short-sellers to keep throwing money at me

 

[Papafox]

Sadly, if the shorts don't pile in in a big way, I don't get to earn money from lending out stock. And I was really enjoying that. Of course I hope longs pile in to keep the stock price up, but I also want crazy short-sellers to keep throwing money at me

One of the big differences between the longs and the shorts is that the longs look at TSLA's stock price as something completely out of their control and big shorts actually succeed in influencing the stock price through selling in big blocks and other forms of creative trading. I don't expect the situation to change, but could you imagine what would happen to the stock price if longs started recalling their shares and thereby inducing a short squeeze? i certainly don't expect that to happen but just wanted to point out the differences between the two groups. In the short term, TSLA longs are paying a huge price for making that 1-2% income through lending their shares to short-sellers. If Model 3 is delayed because of Tesla constraining spending after being unable to do an equity raise at a reasonable stock price, then the lending of shares to shorts will have materially harmed the company. I'm not suggesting that such a delay will happen, I am merely pointing out various cause and effect possibilities.

I understand your position, Neroden, that you don't do options and you're in TSLA for the long run, so the short sellers will eventually be cycled out when the progress at Tesla becomes too great for the market to ignore. Personally, I'm more in Curt Renz's frame of mind, which is to place a high sell order for my shares so that they are not lent out.

 

[Papafox]

I will likely wait for the shortanalytics.com numbers to come out later today before posting my comments. I'll try to get the chart and conditions posted in a timely fashion, though.

 

[Papafox]

A theory I've been pursuing since the SCTY merger is that the abilities of the shorts to manipulate the stock price have been compromised in some ways. Please excuse my being so focused on short activity lately, but this is one area where I think I could have something meaningful to contribute to the group if my theory pans out. I based this theory on my observations of how TSLA trades on a daily basis before and after the SCTY merger date of Nov 17. Initially, I saw resilience in trading to short selling strategies. I started seeing more of the capping ability failing to hold the stock price down, and I believed I saw more docile mandatory morning dips. Most importantly, I saw low-volume afternoon shallow declines in the stock price often defeated by robust upturns within the final hour of trading. I am intrigued.

So far, my findings are inconclusive. I see a general ability of longs to fare better on positive trading days than before the merger. On the other hand, on Nov 29 and Dec 1 when we saw big drops in the SP (one due to FUD+short-selling and the other to sector rebalancing+possible late afternoon short-selling) I saw the ability of the shorts to manipulate on down days as still being pretty potent.

And so today arrived with an apparent bout of short-selling in the morning and an attempt to push the SP down on an otherwise-neutral day. Initially, the strategy worked, but then the shorts had trouble pushing below 183 (too much buying by longs) and then a slow rising slope developed in the afternoon, which took away most of the drop we saw today (just the opposite of what we expect in the pre-merger days). As the Fidelity data does not indicate shorts drawing down shares this morning, the FIdelity data is in contrast to my observation of deep downward dips followed by immediate partial-recoveries, which is a hallmark of short-selling. Without any IB numbers to look at, I will wait to see the shortanalytics.com numbers to try and get an idea of short shares activity today and then I will report back.

Conditions:
* Dow up 36 (0.18%)
* NASDAQ up 24 (0.43%)
* TSLA 185.85, down 0.95 (0.51%)
* TSLA volume3.4M shares
* Oil 50.91, down 0.88 (1.7%)

 

[Papafox]

Hmm, www.shortanalytics.com reports that shorts accounted for only about 40% of today's trading. This is a surprise to me because I had expected higher, due to the significant dips and immediate near recoveries in the morning trading. These dips could indeed have been engineered by shorts who received their shares from a source other than Fidelity, but with numbers this low (I was expectecing 50-55% short percentage) I think we can safely say that the majority of the buying in the afternoon which led the stock price higher was due to longs buying in.

We'll have to wait for another day when we can confirm the morning dip was induced by shorts before we can try and use that day as an example of a short-induced dip on a neutral day. The evidence for today is just too light.

What we can say, though, is the typical scenario of a slow drift-down in SP in the low-volume afternoon hours is just as often being replaced now be a slow drift-up of SP in the afternoon hours, and the swan-dive in the final half-hour of trading is often replaced with a zoom upward during that time period.

 

[Papafox]

OK, here's a possible explanation for what has been going on with short trading on Monday and Tuesday. On Monday morning, vgrinshpun reported about 165,000 shares drawn down by shorts before opening and then most of those shares returned that morning.
Short-Term TSLA Price Movements - 2016

Then, on Tuesday, we saw every indication of short-selling starting right at market opening by looking at the daily chart, but no drawdown of short shares at Fidelity.

How does this fit together? I'm thinking the shorts who took out the shares on Monday morning planned for a dip that would prevent a run-up in the stock price, but they quickly realized that they weren't going to be able to hold the SP down. So, they did what made the most sense for them financially: they closed their short positions opened that morning and went long. You can see periods in the morning where the stock goes almost vertically up, and this might be one of those times when they bought in to close their morning short position, then bought in again to establish a long position. They then rode the stock price up. As for selling the long shares they acquired Monday morning, they did so Tuesday morning on opening and at various other times during the morning. Look, there's no way an institution is going to sell 25,000 shares in the first minute the market opens, wait several minutes and sell 10,000 more. That's not a reasonable tactic for a long to take. The shorts sold their long positions this morning at higher levels than they bought in yesterday, but low enough levels to wreck the day for the longs.

This is only a guess as to what happened these two days, but it does tie all of the pieces of the puzzle together- big drawdown of short shares Monday morning before open and a big return of short shares less than 2 hours later, no drawdown of short shares Tuesday morning but all the indications of short selling by looking at the daily chart. If this theory is true, then the shorts likely don't have shares to sell Wednesday morning unless there's a drawdown, and we'll see that drawdown if it happens.

 

[Papafox]

Today's large gain by Tesla may be related to macros. The Dow Jones Transportation Index is up over 2.5% today and the NASDAQ is up a bit over 1%. Ford and GM are up extremely close to 4%, just as with TSLA. Notice the two huge purchases at 12:52 pm and 1:10 pm with 47,000+ shares and 45,000+ shares traded within a minute, respectively. Originally I thought that these two huge purchases meant that some news was released which was behind the rise in the SP, but with the Dow Transportation Index up so high and with other auto stocks up so high I recognize that macros are likely behind today's excellent climb. We'll take it either way.

Conditions:
Dow up 298 (1.55%)
NASDAQ up 61 (1.14%)
TSLA 193/15, up 7.30 (3.93%)
TSLA volume 5.4M shares
Oil 49.89, down 1.04 (2.04%)
News: One of the SCTY merger lawsuits is in court and some forum members speculated that forward-looking details of Tesla's financial performance could be introduced during the hearing.

Edit: The manipulations the short-sellers work are profitable when the stock is descending but typically unprofitable when the stock is rising. The exception is when shorts switch hats for a day and ride the rising tide by going long, only to unload their shares at market open, the next day. Let's see if we see a repeat of Tuesday on Thursday.

Unless we can reach a point where a substantial number of shorts start to exit the stock, expect to see pressure from shorts intensify as TSLA rises higher within the current trading range. I still believe we may need the good numbers from Q4 deliveries before we can break out of this range.OTOH, if we have macros helping TSLA on days like today, then the picture can change.

 

[GoTslaGo]

View attachment 204933
Today's large gain by Tesla may be related to macros. The Dow Jones Transportation Index is up over 2.5% today and the NASDAQ is up a bit over 1%. Ford and GM are up extremely close to 4%, just as with TSLA. Notice the two huge purchases at 12:52 pm and 1:10 pm with 47,000+ shares and 45,000+ shares traded within a minute, respectively. Originally I thought that these two huge purchases meant that some news was released which was behind the rise in the SP, but with the Dow Transportation Index up so high and with other auto stocks up so high I recognize that macros are likely behind today's excellent climb. We'll take it either way.

Conditions:
Dow up 298 (1.55%)
NASDAQ up 61 (1.14%)
TSLA 193/15, up 7.30 (3.93%)
TSLA volume 5.4M shares
Oil 49.89, down 1.04 (2.04%)
News: One of the SCTY merger lawsuits is in court and some forum members speculated that forward-looking details of Tesla's financial performance could be introduced during the hearing.

Any information on short analytics? Just curious to see how it jives with the macros.

 

[Papafox]

Any information on short analytics? Just curious to see how it jives with the macros.

The shortanalytics numbers typically come in quite late in the day. I'll post. My expectations for such a positive day is something along the lines of 60% long, 40% short. If the short numbers are significantly higher, then that would suggest some shorts were covering today. Let's see.

 

[adiggs]

I visited the shortanalytics website, briefly at least; I was hoping to find more than a sentence talking about the methodology by which they collect the information they collect, and the interpretation that they make of that data.

One question I have - every trade has a buyer and a seller (whether they are <blah> to open or to close a position). So if somebody sells to open (establishes a short position), and somebody else buys to close (an open short position), does that could the shares on each side of the trade as being shares traded by shorts?

What if that trade where sell to open paired up with buy to open? That's a short selling to a long.

Is there market data available at that level of detail over all exchanges / market makers / all of the market, or are they sampling the market by only seeing this level of detail from a subset? Or are they seeing this detail over a subset of trades over the market?


I ask these questions not to challenge the data - rather I honestly don't know, and I know enough about analytics to know that the quality of the data underpins the quality of the analysis. If they're drawing a 60/40 short/long conclusion for a day of trading, and they're seeing 10,000 shares traded out of millions, my immediate reaction is that seems like too small of a sample. Of course, I might be wrong and that's plenty of sample. The point is I'd like to understand the assumptions and biases, and I didn't immediately find that on the website.

Anybody using shortanalytics (or some other site), have more detailed information on the data collection and reporting method being used?

Thanks

 

[Papafox]

I visited the shortanalytics website, briefly at least; I was hoping to find more than a sentence talking about the methodology by which they collect the information they collect, and the interpretation that they make of that data.

One question I have - every trade has a buyer and a seller (whether they are <blah> to open or to close a position). So if somebody sells to open (establishes a short position), and somebody else buys to close (an open short position), does that could the shares on each side of the trade as being shares traded by shorts?

What if that trade where sell to open paired up with buy to open? That's a short selling to a long.

Is there market data available at that level of detail over all exchanges / market makers / all of the market, or are they sampling the market by only seeing this level of detail from a subset? Or are they seeing this detail over a subset of trades over the market?


I ask these questions not to challenge the data - rather I honestly don't know, and I know enough about analytics to know that the quality of the data underpins the quality of the analysis. If they're drawing a 60/40 short/long conclusion for a day of trading, and they're seeing 10,000 shares traded out of millions, my immediate reaction is that seems like too small of a sample. Of course, I might be wrong and that's plenty of sample. The point is I'd like to understand the assumptions and biases, and I didn't immediately find that on the website.

Anybody using shortanalytics (or some other site), have more detailed information on the data collection and reporting method being used?

Thanks

Adiggs, your point is something I've wondered too. They really have to count both the seller and the buyer, so you have four possibilities: long to long, short to long, short to short, and long to short. If you introduce the concept of "to open" or "to close", then things get too complicated. I suspect they stick with buyer and seller. I do not take their data as gospel, rather I figure they have a methodology that they use all the time and as long as they stick with the same methodology, changes in the percentages can be useful for our purposes. If you or anyone else finds out more info about how they arrive at their values, I'd be most interested to hear.

 

[Papafox]

The website shortanalytics.com says that longs comprised 66% of the traders today, and shorts were 34%. This is the lowest percentage of shorts I have seen since tracking regularly. Typically, you see about 60% long on a nice up day, so this is an unusually high percentage of longs doing the trading.

The wild card is asking whether some of the shorts switched to being longs just for the day. I suspect this happened on Monday's runup and it explains the apparent short-selling Tuesday morning even though there was no appreciable drawdown of shares for shorting. If we see blatant short-selling dips on the chart Thursday morning and no real drawdown of short shares in the morning, I will assume that the shorts switched hats for a day and sold their long shares Thursday morning in bulk in order to cause as much havoc as possible, while still realizing a profit from the transactions.