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Check out after hours action
TSLA chart above
QQQ chart above
Wow, another monster day with TSLA up 5.34% during market hours and another 1.33% after hours. Congrats longs! This all happened on a day when the broader markets were down. As I said before, never underestimate how high a TSLA rally can go or how low a TSLA dip can go either. Investing in TSLA is not for the timid.
Thanks to @Artful Dodger with his research about S&P rebalancing (see post below this one), it turns out the rebalancing was at the end of TSLA market trading this past Friday. Consequently, some of Friday's gains would be caused by hedge funds front running the rebalancing and then selling to the index funds during the 4pm closing cross. As for the relatively low (50%) percent of TSLA selling tagged to shorts on Friday, I chalk that one up as professional courtesy between pirates, with the MMs tipping their hat and perhaps joining the hedgies on front running the 4pm closing cross.
Lest you worry that TSLA has lost its rally mojo without the help of an S&P rebalancing, Monday's trading put that worry to rest with TSLA gaining nearly $14 during market hours and more than $3 after hours. There was no professional courtesy extended by the market makers this trading day, and consequently we saw that TSLA was having the "sugar" shorted out of it to the tune of 66% of selling tagged to shorts. The 4pm volume of 4.5 million shares suggests the day-shorters were busy closing short positions. The MMs and hedgies may have not found enough shares to buy for covering at 4pm, which might explain the strength after hours shortly after market close.
As Curt Renz pointed out, Craig Johnson of Piper Sandler believes for TSLA a new leg higher is underway.
Tesla's NACS charging plug made additional gains with Reuters reporting that Texas will require NACS and CCS to both be present on chargers seeking Fed funding in Texas for EV chargers, plus Rivian has joined the NACS standard effective Spring of 2024. As much as the current administration tries to marginalize Tesla, the company always manages to turn lemons into lemonade. We all ought to consider investing in such a company.
News:
* Reuters reports that Tesla is looking seriously at a large investment in India
Percent of TSLA selling tagged to shorts jumped way up to 66% on Tuesday
Yields on 10 yr. treasury bonds closed at about 3.74% on Tuesday
Max pain Tuesday morning was 240, which already appears to be irrelevant for this week. Calls at 277.50 could be a battle zone if the rally were to cool, otherwise 292.50 could be a capping level if the stock price stays frisky.
Tuesday's options volumes
Check out the additional similarities between the May 23-24 dip and the June 14-15 dip. In both cases we saw a black candle (up but closing lower than opening price) on the first day of the recovery and a strong white candle on the next day. Meanwhile, the blue 50 day moving average is less than $4 below the red 200 day moving average and closing quickly.
Conditions:
* Dow down 245 ( 0.72%)
* NASDAQ down 22 (0.16%)
* SPY down 2 (0.52%)
* TSLA 274.45, up 13.91 (5.34%)
* TSLA volume 163.4M shares
* Oil 70.50
* IV 63.5, 61%
* Max Pain 240
* Percent of TSLA selling tagged to shorts: 66%
* Volume at 4pm closing cross: 4.5 million shares
TSLA chart above
QQQ chart above
Time constrained
So here's how TSLA's trading evolved on Wednesday. The market grew worried about Darth Powell's appearance on Capitol Hill. As expected, Powell gave his usual dog and pony show, exclaiming that we have a long way to go to get inflation under control and more increases for a total of 0.50% more is likely needed before year end. This is pretty much the same statement that the Fed gave at its recent FOMC meeting (which caused the market to turn fearful but then shrug off the Powell negativity. This time, without the good news of a pause included, his words created more damage for the market and Nasdaq ended up down 1.21%. TSLA ended up down 5.46% for a 4.5X multiplier. That's very excessive. Part of the excess can be blamed on traders jumping ship, but part is also due to the heavy shorting activity for the day, with hedge funds (and perhaps market makers) throwing gasoline on the fire to help cement a deep dip for TSLA and hopefully stall the rally. Percent of TSLA selling by shorts came in exceedingly high at 64%, suggesting lots of manipulations, especially with 7.9M shares trading hands during the 4pm closing cross. Someone was busy covering their day shorting.
For a quick reality check to Darth Powell's comments about "long way to go" on inflation to get it to 2%,, I post this latest truflation.com inflation estimate that does not have the exceedingly long delays for categories such as rent.
News:* Electrek says Tesla's Dojo computer is coming next month
TSLA shorts were tagged with 64% of selling on Wednesday, suggesting far above average level of manipulations
Yields on 10 yr.. treasury bonds came in at 3.75% on Wednesday
Max pain Wednesday morning was 260. As you can see, puts now dominate the 255, 260, 265 and 270 strikes. The market makers make less money if TSLA closes below 260 this week. OTOH, maybe some short term reduction in profits is worth it for the MMs to finally stall TSLA's strong rally.
Wednesday's options volumes
What the market gaveth on Tuesday, it tooketh away on Wednesday. The golden cross of the 50 DMA and the 200 DMA is less than $2.50 away.
Conditions:
* Dow down 102 (0.30%)
* NASDAQ down 165 (1.21%)
* SPY down 2 (0.51%)
* TSLA down 14.99 (5.46%)
* TSLA volume 200.2M shares
* Oil 72.41
* IV 65.1, 65%
* Max Pain 260
* Percent of TSLA selling tagged to shorts: 64%
* Volume at 4pm closing cross: 7.9M shares
TSLA chart above
QQQ chart above
Thursday was a nice bounceback for TSLA, moving from 250 at open to 264.61 at close. Nasdaq was up 0.95% vs. TSLA up 1.98% for an approx. 2.1X multiplier, which is just about right for TSLA. According to this post by TMC's @The Accountant, the initial jobless claims and existing homes sales numbers came in as expected, not too inflationary-trending, not too recession-trending, which made Mr. Market happy.
As far as tweaking of the results, the max pain chart showed that 260-strike was dominated by puts and 265 strongly dominated by calls, which suggested the MMs wanted a close above 260 but a safe distance below 265. That's what we ended up with. Most of the work to achieve this result was done by the market, and so we saw percent of selling by shorts fall to 54%.
Lots of cybertruck sightings are happening, suggesting that we're getting closer to start of production.
Electrek reports that U.S. inventory of Tesla vehicles has plummeting leading into the end of quarter. Some discounting of existing vehicles was going on and the public responded. We also know there's a sugar-load of Teslas about to be shipped from Shanghai to Canada, and so those vehicles will not be delivered until Q3. Overall, the fears of multiple price cuts to move Teslas in Q2 has not materialized.
Percent of TSLA selling tagged to shorts came in at 54%, suggesting a milder day for market maker and hedge fund manipulations of TSLA stock price.
Yields on 10 yr. treasury bonds advanced to about 3.79% Thursday afternoon
Max pain on Thursday morning was 257.50. Since 260 and below were put-dominated me thinks the MMs would prefer a close slightly above 260 in this scenario.
Thursday's options volumes
Check out that 50 DMA about to cross the 200 DMA on Friday. A true golden cross hasn't happened in years!
To illustrate the golden cross point better, here's a chart showing TSLA's blue 50 DMA rising through the 200 DMA in late 2019. TSLA almost pulled off a golden cross in late summer of 2022 but then the Elon selling shares to pay taxes and then to buy Twitter dip began just before a cross. Throw in Fed interest rate hikes. This time the cross looks like it is going to be strong.
Conditions:
* Dow down 5 (0.01%)
* NASDAQ up 128 (0.95%)
* SPY up 2 (0.36%)
* TSLA 264.61, up 5.15 (1.98%)
* TSLA volume 164.1M shares
* Oil 69.44
* IV 63.6, 61%
* Max Pain 257.50
* Percent of TSLA selling tagged to shorts: 54%
* Volume at 4pm closing cross: 5.3M shares
TSLA chart above
QQQ chart above
Friday was an interesting day to top off what now looks like a consolidation week for TSLA. On the one hand, you can see the substantial similarities between the TSLA chart above with the QQQ chart just below it. OTOH, TSLA traded at about a 3X multiplier to Nasdaq on Friday, which is clearly high (especially with no substantial news), suggesting various forces other than the market could have been at work. For example, you can see a very quick dip and recovery of TSLA which bottomed out at 10:27am. This sharpness of this dip makes me think that it was a manipulation attempt, but the market makers had no incentive to push TSLA down below 253, and so we might have see someone (such as shorts or hedge funds) with a negative incentive pushing TSLA lower for much of the day (after all, percent of TSLA selling tagged to shorts was a high 58%). Then take a look at the quick push upward of TSLA in the final 8 minutes of market trading which would have brought TSLA up to max pain with 4 minutes left. That upward push could have come from market makers. You don't see a similar jump higher in the QQQ chart. Pirates battling pirates? That's kind of a fun picture.
As for the 4pm closing cross volume of 13.5 million shares, I tend to agree with @Artful Dodger that most of this is likely the end of the S&P rebalancing for the 2nd quarter.
The big question is where does TSLA go from here? On the one hand, the switch in market sentiment from the short term yield worries to the longer term "brilliant future" view was a nice $100 pop for us longs. OTOH, as end of quarter approaches the emphasis becomes short-term again. Let's hope the P&D report numbers are sufficient to reinforce TSLA's recent climb. The bigger test will be the Q2 ER, when we get to see the margins and profits. With the emphasis turning more short-term for the next few weeks, volatility is likely. Catalysts that could help outweigh any negative Q2 ER numbers could be Model 3 highland launch and then (likely later) the cybertruck deliveries beginning. Joe Tegtmeyer photos through windows into the Texas Gigafactory show the enormous casting machines in place for production. Tick, tick, tick.
Percent of TSLA selling tagged to shorts came in high at 58% on Friday
Yields on 10 yr. treasury bonds dipped to 3.74% on Friday
Max pain Friday morning was 257.50. With max pain rising by Tuesday and the stock price falling, the max pain number became surprisingly relevant on Friday, with a close just 90 cents below max pain. With Strike 260 slightly put-dominated (but close to neutral), I would have expected the market makers to push for a close slightly above 260 on Friday. Instead, we saw a macro dip pull TSLA lower in the final two hours and the final close, near max pain, was still a highly profitable conclusion to the week.
Friday's options volumes
The biggest movement this week in max pain took place on Monday when TSLA moved out of a triple-witching expiration week and into a normal week. All in all, the week's trading looks much like a consolidation week, where the options are allowed to catch up with the stock price. Starting in the coming week attention drifts toward Q2 Production and Deliveries numbers and a more short-term emphasis vs. the longer term "brilliant future" view that helped TSLA enjoy a hundred dollar rally. Chart by @JimS
For the week expiring on June 30, the Mt. Everest sized call wall stands at 300. Since P&D report results will not yet be released, there's little chance of hitting that number unless unknown good news suddenly breaks. Strike 255 and below are put-dominated while 260 and above are call dominated.
The golden cross occurred on Friday as the 50 DMA rose above the 200 DMA. This is a bullish technical development last seen right at the start of the 2019 massive rally. After hours weakness could indeed have been some gamesmanship by the shorts to remove expectations that TSLA is poised to run to the high side now.
For the week, TSLA closed at 256.60, down $3.96 from the previous Friday's 260.54. Hoping you've enjoyed your weekend with those who matter most to you.
Conditions:
* Dow down 219 (0.65%)
* NASDAQ down 138 (1.01%)
* SPY down 3 (0.76%)
* TSLA 256.60, down 8.01 (3.03%)
* TSLA volume 175.5M shares
* Oil 69.16
* IV 61.6, 50%
* Max Pain 257.50 for 6/23, 247.50 for 6/30
* Percent of TSLA selling tagged to shorts: 58%
* Volume at 4pm closing cross: 13.5M shares
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TSLA chart above
QQQ chart above
Extremely time constrained on Monday, no time for research
Despite a start to the week that broke into the green Monday morning, the market was out to punish high-flying ai companies such as Tesla (down 6.06%) and Nvidia (down 3.74%). Goldman downgraded TSLA from buy to hold, which certainly influenced the day's trading. Add in 63% of TSLA selling tagged to shorts and you have a recipe for a down day.
What's notable is that max pain was 250 Monday morning and TSLA nonetheless withstood substantial shorting from some entity that's not likely to be market makers.
TSLA Shorts were busy chipping away at TSLA's stock price on Monday. They were tagged with 63% of TSLA selling for the day.
Yields on 10 yr. treasury bonds closed around 3.74% on Monday
Max pain Monday morning was 250. That strike price was put-dominated and market makers would have no real incentive to push below 250. Look elsewhere for the rather hefty shorting activity that contributed to TSLA's dip.
Monday's options volumes
Despite the poor stock performance on Monday, the golden cross remains.
Conditions:
* Dow down 13 (0.04%)
* NASDAQ down 157 (1.16%)
* SPY down 2 (0.41%)
* TSLA 241.05, down 15.55 (6.06%)
* TSLA volume 176.4M shares
* Oil 68.54
* IV 61.8, 52%
* Max Pain 250
* Percent of TSLA selling tagged to shorts: 63%
* Volume at 4pm closing cross: missing
TSLA chart above
QQQ chart above
Very Time Constrained on Tuesday- Little Time for Research
A quick review: on Monday the NASDAQ dipped 1.16% and TSLA lost 6.06% for a more than 5X multiplier. On Tuesday the market were up with NASDAQ gaining 1.65% and TSLA 3.8%, for an approx 2.3X multiplier. Seems unfair but TSLA managed to "coincidentally" close 21 cents from Friday's max pain
Looking forward to getting some time back, hopefully on Wednesday
News:
* CNBC says Volvo will be adopting Tesla's NACS EV power delivery standard
* Electrek says Chargepoint has joined Tesla's NACS
* This Tweet says Tesla has begun advertising on Google. Note that Tesla energy was well represented in the advertising, and so the impression is that Tesla is not scrambling to save sales in Q2.
Yields on 10 yr. treasury bonds rose to about 3.76% on Tuesday
Max pain Tuesday morning was 250. Close was 250.21. Any questions?
Tuesday's options volumes
Conditions:
* Dow up 212 (0.63%)
* NASDAQ up 220 (1.65%)
* SPY up 5 (1.10%)
* TSLA 250.21, up 9.16 (3.80%)
* TSLA volume 163M shares
* Oil 67.78
* IV 58.4, 40%
* Max Pain 250
* Percent of TSLA selling tagged to shorts: 54%
* Volume at 4pm closing cross: 4.5M shares
TSLA chart above
QQQ chart above
Wow, what a week it's been so far. On Monday we had a combination of the Goldman downgrade plus high levels of TSLA shorting and a red NASDAQ to give TSLA a greater than 5X decline vs. NASDAQ. As far as Wall Street was concerned, it was time for TSLA to begin it's post rally dip so as to render those short-term call option bets worthless. On Tuesday, the NASDAQ headed higher and TSLA managed a 2.3X multiplier on the climb. On Wednesday, the NASDAQ and Dow were lukewarm up a quarter percent, but TSLA managed to pull off a nearly 9X multiplier on the NASDAQ.
Much has to do with good news such as recent China numbers.
This chart from a Roland Pircher Tweet shows just how profoundly the wave is being unwound in 2023, compared to 2022. The other takeaway, of course, is that the 2023 China insurance data chart shows a very nice improvement over 2022 as Q2 prepares to be completed. While parts of Europe may not exceed Q1 deliveries, China is going gangbusters. As for Gigaberlin, its output continues to increase rapidly according to this Tweet.
Then there's this Solving the Money Problem Youtube post highlighting the plans by Tesla to increase Dojo's computing power by October of 2024 to 100 Exa-flops, which is just an unreal amount of power and should not only speed up FSD improvements but also give Tesla a machine that can generate income as others contract for its use.
What's happening is that the various projects that Tesla has had percolating for a long time are finally coming to fruition. Behold the migration of EV makers and charging companies to Tesla's NACS standard in order to take advantage of the only company on the planet that so far has been able to build a truly dependable charging network. Wall Street's recent $100 increase in the value of TSLA is proof that investors are starting to understand what a powerhouse Tesla is rapidly becoming.
Let me offer two stories from over an hour on the highways today. For a portion of a trip, I disengaged autopilot in an area where we have lots of cheaters trying to pass other vehicles in the merge to the next highway lane and then duck into that lane at the last minute. Autopilot is more friendly than I am and so I was manually driving. I could see two cheaters were coming up on my rear and the truck behind me let the first in. He entered the lane okay, but then his buddy in a sedan came around in front of him and tried to squeeze between my Model 3 and his buddy's truck. The problem was there just wasn't enough room and even though I went as close as possible to the stopped car in front of me I still got bumped from behind. I got out and took a look. The young man's vehicle lost a light and had a chewed up front bumper. We started wiping the white paint off my blue Model 3's bumper and discovered there wasn't even a dent in the Tesla bumper, nor was any of my paint removed. In other words, the Tesla bumper did one of the things it was built for: preventing the need for costly repairs in an under 5 mph collision. I was relieved and so was the fellow who hit me.
On the return trip, Tesla FSD 11.4.4 decided to bring us one lane to the right in preparations for our upcoming exit. As a driver, I try to never make a lane change when there's a driver on the other side of the desired lane, just in case that driver heads for the lane at the same time I do. My Model 3 signaled and then began the lane change. I was aware of a lady in a sedan on the other side of our intended lane who was half a car's length behind us. Unexpectedly, my Tesla abandoned the lane change halfway through and returned to the original lane. Sure enough, that lady decided to try occupying the same lane as us at the same time, but Tesla was watching and very smoothly extricated us from the threat. I was impressed. This is a prime reason why I drive with FSD more than 90% of the time I'm on a highway.
Just between you and me, I think we ought to buy some stock in this Tesla company!
Percent of TSLA selling tagged to shorts came in at 53% on Wednesday.
Yields on 10 yr. treasury bonds closed at 3.73% on Wednesday
Max pain Wednesday morning actually dipped 2.50 to 247.50 despite Tuesday's climb. We had an interesting layout of puts and calls with calls dominating slightly from 240 (except 242.50) to 252.50. From 255 and above calls dominated strongly. This arrangement gave the market makers wiggle room on the low side (that they didn't need on Wednesday).
Wednesday's options volumes
It has taken strong climbing on Tuesday and Wednesday to overcome Monday's dip.
Conditions:
* Dow down 74 (0.22%)
* NASDAQ up 36 (0.27%)
* SPY up 0 (0.05%)
* TSLA 256.24, up 6.03 (2.41%)
* TSLA volume 159.0M shares
* Oil 69.08
* IV 58.5, 41%
* Max Pain 247.50
* Percent of TSLA selling tagged to shorts: 53%
* Volume at 4pm closing cross: 3.8 million
TSLA chart above
QQQ chart above
Ah yes, once again TSLA was denied 260. We saw trading above 260 in pre-market and early during market hours, but the market makers have those 28K 260-strike call option contracts to protect through Friday, and so the games get played. Although QQQ spent almost all of market hours in the red, TSLA jumped quickly from red to green numerous times as a bit of whack-the-mole was played to keep the stock safely below 260.
Percent of TSLA selling tagged to shorts came in middle of the road at 53%, which makes sense because there was no strong upward push on TSLA stock price and therefore only a few tweaks managed to keep it under 258 for the close. Trading during the 4pm closing cross likewise came in an an elevated but not remarkable 2.6 million.
Friday could be another matter, good or bad, however. The PCE inflation data comes out before market open and a big deviation from expectations could stir up the market. Friday is also the last day to place bets on the Q2 Production and Deliveries numbers. Recent data suggests positive momentum going into the quarter's end, and so that momentum might encourage some Friday buying.
Yields on 10 yr. treasury bonds spiked upward to close at 3.84% on Thursday
Max pain was again 247.50 Thursday morning. The strike 252.50 was neutral in terms of puts vs. calls, with puts dominating below and calls dominating above.
Thursday's options volumes
TSLA is about to complete three weeks of efforts by Wall Street to keep TSLA from holding onto prices above $260. All things considered, TSLA has weathered the storm well.
Conditions:
* Dow up 270 (0.80%)
* NASDAQ down 0 (0.00%)
* SPY up 2 (%)
* TSLA 257.50, up 1.26 (%)
* TSLA volume 130M shares
* Oil 69.81
* IV 59.6, 44%
* Max Pain 247.50
* Percent of TSLA selling tagged to shorts: 53%
* Volume at 4pm closing cross: 2.6M shares
TSLA chart above
QQQ chart above
Friday morning got off to a good start when the PCE inflation numbers came in cooler than expected- CNBC story here. If you compare the TSLA and QQQ charts you will see lots of similarities. One notable difference, however, would be the post-2pm downtrend of TSLA that didn't happen at QQQ. I'll chock that one up to market makers trying to push for 260 just before the close but the dip getting bought by Friday afternoon bargain hunters. At it's peak, TSLA was up about 2.1% for the day, it closed up 1.66% after the afternoon pushdown, and QQQ meanwhile closed up 1.54%. That's not much of a multiplier, and I think we had our pockets picked to the tune of about 0.5% for the day.
The big suspense this weekend is the expected release of the Q2 Production and Deliveries Report Sunday morning. Personally, I've decided to never hold my breath or bet on these numbers because there are so many moving pieces that it's hard to nail down a good number consistently. With well over 400K deliveries every quarter now, a mere 1% error equates to 4,000 vehicles, and can be the difference between Wall Street adulation and Wall Street scorn. Troy tries to get his estimates within a +/- 3% range, which is 6% from end to end, and sometimes his best efforts fall outside. It's a tough nut to crack consistently. What we do know, however, is that Tesla makes vehicles that are in demand by consumers, it's developing a cybertruck and 3rd generation vehicles that will sell well, and the company is dedicated to rapid growth. In the long run we will see profits continuing to climb as production continues to scale up rapidly. I bet the long view for this reason.
Estimates for Q2 deliveries suggest that above about 446K will be considered good, and below will be considered a miss. Let's see how it shakes out.
News:
* Steven Mark Ryan did a video podcast here on the Dan O'Dowd and Ross Gerber Full Self Driving stop sign fiasco. It's a great summary. In particular, notice Dan O'Dowd's mannerisms in the video. If a new casting call came out for a future Star Wars movie and they needed the perfect commander for a new death star, all I can say is they have their man right here.
* Sawyer Merrit Tweets that Tesla has just lowered the cost of Model 3 and Model Y in Australia by $2600. That cut allows Model 3 RWD to qualify for an additional $2300 government incentive.
* Troy Teslike released on Twitter an updated Q2 deliveries estimate of 448,000. His estimate now exceeds the average analyst estimate.
Percent of TSLA selling tagged to shorts was a rather low 49%, suggesting reduced manipulations
Yields on 10 yr. treasury bonds were 3.84% at close on Friday
Max pain Friday morning was 250. Call domination began at 255 and we can see quite a large call wall at 260, and so I suspect the market makers really would have enjoyed a close at least a couple pennies below 260.
Friday's options volumes
For the week, TSLA had the big pushdown on Monday and then spent the rest of the week reclaiming the 260 beachhead.
Next Friday, July 7, max pain is currently showing 252.50. The max pain chart is similar to this past week's with a big call wall at 260, but there's also another at 270. In the event of negative trading next week, the 240 put wall looks to be a good support level.
TSLA managed to reclaim 260 at week's end. You can see the continually-decreasing volume as the week progressed, suggesting that investors were mostly holding their positions going into the Q2 Production and Deliveries Report.
For the week, TSLA closed at 261.77, up $5.17 from the previous Friday's 256.60 and up $1.23 from two Fridays ago at 260.54. In other words, TSLA has been trading pretty much horizontally for the past two weeks. That's not bad in a post rally consolidation and if Tesla news provides a catalyst (such as a positive P&D Report), the stock would be well-positioned to take the next step higher. Best wishes to us longs on that report and be sure to enjoy your weekend!
Conditions:
* Dow up 285 (0.84%)
* NASDAQ up 197 (1.45%)
* SPY up 5 (1.18%)
* TSLA 261.77, up 4.27 (1.66%)
* TSLA volume 110.8M shares
* Oil 70.37
* IV 58.9, 42%
* Max Pain 250 for 6/30, 252.50 for 7/7
* Percent of TSLA selling tagged to shorts: 49%
* Volume at 4pm closing cross: 5.9M shares
TSLA chart above
QQQ chart above
Anyone for 280? TSLA shrugged off its consolidation ways and gapped up to (and above) 280 on Monday. The catalyst was, of course, Tesla's Q2 Production and Deliveries report, linked here. Particularly impressive was the nearly 480K production, which is just 20K/quarter away from a 2 million vehicles per year production rate. These production numbers, along with record-setting 466K deliveries, drives a stake through the heart of claims that TSLA's rapid growth is over.
TSLA peaked at 9:48am with a price of nearly 284. I suspect the dip through noon would be partly due to QQQ's dip over the period and partially due to downward pressure from the 59% TSLA selling tagged to short sellers number. In other words, some option sellers worked on Monday to minimize the damage. As QQQ rose in the final hour of trading, TSLA joined in, but at a much more subdued response.
Where does the stock go from here? With all those puts at 255 strike and below, the option sellers have no appetite for a deep dip. Further, there's likely no appetite from investors for much of a dip because Tesla's prospects in 2023 and 2024 look noticeably better after these Q2 delivery and production numbers. For example, in 2022 Tesla's deliveries grew 40%, down from the traditional 50% annual growth in deliveries. Analysts were calling for a thirty-something percent growth of Tesla deliveries in 2023, a story of continued declines in growth with the added insult of lower margins. The year 2022's deliveries reached 1.31 million, and if Tesla is to beat 2022's 40% growth, it'll need to delivery 1.834M vehicles in 2023. That's a need for an additional 945K vehicles in the 2nd half of 23 or 473K/quarter. Since TSLA is already up to 466K in Q2, that mark should be easy to beat. The year will likely end with 40-something percent growth in deliveries, which is a rebound from 2022 growth rate. Those numbers may push the stock price higher.
As for margins, production growing from about 440K in Q1 to 480K in Q2 with roughly the same workforce should yield some efficiencies of scale. Tesla nearly doubling deliveries of S & X should also help a bit because these are high margin vehicles. There should now be less worry about the ER, which is scheduled for July 19. Just one week earlier, on July 12, we'll see the CPI inflation rate report, which should include that big (greater than 1%) removal of the highest-inflation growth month of the year. Analysts know this and will take that number into consideration with their expectations, but if the CPI inflation rate drops from 4% to something less than 3% in a single month, that move would nonetheless take the wind out of Darth Powell's sails. To give you an idea of what the actual inflation rate is in the U.S. (using data that is not overly stale), I present the latest truflation.com results:
Finally... Sunday's top "did not age well" article:
The headline got amended when reality struck.
There's no trading on Tuesday, July 4.
Percent of TSLA selling tagged to shorts bounced up to 59% on Monday, suggesting plenty of manipulations.
Yields on 10 yr. treasury bonds closed at 3.86% on Monday
Max pain was 255 on Monday. Look at 255 and you see put domination there and below, look at 260 and you see call domination there and above. You know where the MMs would like the stock price to be. Check out the heavy puts open for the week, though. July 4 week has historically been an opportunity for bear attacks, but the sensational production and delivery numbers have declawed the beast, at least temporarily. Interestingly, 280 strike showed very little open interest coming into Monday's trading.
All in all, the Wall Street market makers, hedge funds, and other big dogs should do okay this week as Goldman and others managed last week to scare the market into buying a sugar-ton of puts that should mostly expire without value on Friday.
Monday's options volumes
Want to see what breaking out of a consolidation looks like? Voila! Notice how the upper bollinger band acted as a top for TSLA's Monday rise.
Conditions:
* Dow up 11 (0.03%)
* NASDAQ up 29 (0.21%)
* SPY up 1 (0.12%)
* TSLA 279.82, up 18.05 (6.90%)
* TSLA volume 118.2M shares
* Oil 69.88
* IV 56.0, 34%
* Max Pain 255
* Percent of TSLA selling tagged to shorts: 59%
* Volume at closing cross: 3.7M shares
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TSLA chart above
QQQ chart above
Wednesday was revealing of FOMC meeting minutes day, and with Fed members voicing plans for a little more interest rate hiking this year, the market was not overjoyed. The Dow closed down 0.38%, with NASDAQ down slightly and QQQ hanging on the the smallest breadcrumbs of a green day. Since TSLA was likely receiving downward pressure throughout the day (because of 63% TSLA selling being tagged to shorts), you can assume the market makers were doing their best to put the brakes on TSLA's climb, but to no avail. The nice climb into close by TSLA suggests continued buying pressure and the high 4.8M shares traded during the 4pm closing cross suggests plenty of covering from day shorting.
Wednesday was another day with TSLA outperforming the macros and the option sellers trying hard to limit that climb. Percent of TSLA selling tagged to shorts came in at 63.5%.
Yields on 10 yr. treasury bonds jumped up to 3.93% Wednesday afternoon when the FOMC meeting notes indicated that most members of the Fed favored additional rate hikes in the future
Max pain Wednesday morning was 262.50. That strike proved to be the neutral point where puts and calls balanced out. At lower strikes puts prevailed and at higher strikes calls prevailed. Seldom do you get such a clean mid-point where market makers would really like to see the stock price go. Nonetheless, even with 63% of TSLA selling tagged to shorts on Wednesday, the MMs couldn't hold TSLA back as it approached end of day trading and left 280 behind.
Wednesday's options volumes
Check out the upper bollinger band, which is starting to trend toward a steeper angle. When the BB is near horizontal, it tends to be more of a constraint to penetration. That's 6 green trading sessions in a row.
Conditions:
* Dow down 130 (0.38%)
* NASDAQ down 25 (0.18%)
* SPY down 1 (0.15%)
* TSLA 282.48, up 2.66 (0.95%)
* TSLA volume 130.2M shares
* Oil 71.79
* IV 55.1, 30%
* Max Pain 262.50
* Percent of TSLA selling tagged to shorts: 63%
* Volume at 4pm closing cross: 4.8M shares
TSLA chart above
QQQ chart above
Thursday's jobs data came in hot according to this CNN article, which caused the markets to go red and pull TSLA down with it. NASDAQ was down 0.86%, which gives a 2.6X multiplier to TSLA dip of 2.1%. That's a bit heavy, which could in part have been caused by manipulations aimed at restraining TSLA's recovery in the afternoon hours vs. the NASDAQ's. OTOH, Tesla as a company is more affected by inflation (suggested by the strong employment numbers) than most companies because of how auto loan rates affect vehicle purchases. Percent of selling tagged to shorts was a somewhat mild 53%, but the buying and selling during the 4pm closing cross was quite heavy.
Another pertinent issue affecting TSLA's price on Thursday was the growth of put options vs. call options. TSLA's put to call ratio is a relatively high 0.91, which reflects puts being purchased just below TSLA's Wednesday closing numbers. Market makers would typically sell TSLA shares to delta hedge against these puts coming into the money this week, and that hedge selling would have contributed to TSLA's weakness on Thursday.
The big question on Friday is where the Fed's employment numbers come in. If growth of new jobs is strong (such as Thursday's private source reported), then there's a reasonably good chance that Friday's numbers will be hot, too, which would unsettle the market yet again. We'll see. You can see that the threat of the Fed to do more interest rate increases in the future is having the desired effect. When economic data comes in, investors have to contend with either the sharks (bad economic data) or crocodiles (good economic data which means inflation threat and a reaction by Darth Powell and the Fed).
Besides affecting the stock market, the threats of rate increases from the Fed also affect bond yields. We've seen a steady escalation up to (and exceeding) 4% for 10 yr. bond yields on Thursday as the market is starting to see strong economic data likely to trigger the Fed into a couple more rate increases. It's really nutso that we're coming out of this inflation spike with (at the moment) strong employment, wage growth, but lack of substantial inflation on goods and the market is so worried. My hope is that the CPI will dip below 3% on a year over year basis in it's July report and tie the hands of the Fed for at least another month while we wait for the employment picture to cool a bit.
Yields on 10 yr. treasury bonds rose to 4.04% on Thursday. I attach a 12 month yields chart to give you an idea of how seldom these yields have gone above 4% and how quickly they tend to fall after crossing.
Max pain Thursday morning was 267.50, a huge jump from Wednesday's 255. Strike 267.50 is in put-dominated territory. You need to move to 272.50 or 275 to get to neutral put vs. call. Let's see where open interest is on Friday morning, but the market makers might be satisfied with a 272.50 to 275 close if things didn't change too much on Thursday.
Thursday's options volumes
Volume has receded to less than average as the market assesses how macros and economic activity will affect TSLA going forward.
Conditions:
* Dow down 366 (1.07%)
* NASDAQ down 113 (0.82%)
* SPY down 3 (0.78%)
* TSLA 276.54, down 5.94 (2.10%)
* TSLA volume 119.5M shares
* Oil 72.10
* IV 55.6, 32%
* Max Pain 267.50
* Percent of TSLA selling tagged to shorts: 53%
* Volume at 4pm closing cross: 5.6M?? (from memory)
Artful Dodger
"Neko no me"
That's a pretty good memory you've got there, Papa...
5.514M at the Closing Cross on Thu, Jul 06, 2023:
Cheers to @Papafox !
TSLA chart above
QQQ chart above
On Friday morning the jobs numbers came out weaker than expected and the market ran higher as it saw the weaker numbers making an interest rate hike (or two) less likely. Alas, the market then got to fretting that Powell might raise interest rates anyway, even with weaker jobs data, and so the market retreated in the afternoon. In a nutshell, we avoided the shark (good economic data=Powell raising interest rates) and ended up getting eaten by the crocodile (bad economic data = recession ahead) while the shark began feeding as well. The curse of Darth Powell continues.
I really enjoyed @Artful Dodger 's comment in this TMC post that the market makers showed us 4 times on Friday where they wanted the stock price for close ($274.50). You can see those steep dips followed by immediate recoveries which look like Kansas tornados. Those dips and rapid recoveries are a giveaway sign of manipulations because it was a move that the market immediately disagreed with and undid. The afternoon dip gave the market makers a blank check to tweak TSLA to whatever value they wished (within reason) and so they got their wish.
Following Monday's Production and Deliveries beat, a number of analysts upgraded TSLA price targets:
* BofA to $300
* CFRA to $310
* Mizuho to $300
Such boosts in price targets will pave the way for TSLA's next run higher (when macros and news permit).
Fortunately, we've already seen some consolidation after the May and early June rally. Just what is a consolidation, though? With TSLA, it involves traders jumping out of the stock and selling to investors with longer time horizons. Often there's a dip with such a consolidation. A consolidation also allows the max pain to start catching up with the stock price. Whenever the stock price is noticeably higher than max pain, we can expect manipulations by option sellers (market makers and hedge funds) as they aim to bring the two closer by artificially pushing the price lower.
Besides the strong beat in Monday's Production and Deliveries Report, this week also saw Mercedes-Benz getting onboard Tesla's NACS charging plug. With a German automaker onboard now, expect others (such as BMW or VW) to follow. Such a win keeps Tesla in the catbird's seat, even though the current administration has really tried to bypass the company while handing out the goodies (qualifying for the IRA EV incentives, choice of an EV charging standard, etc.). With Tesla retaining a majority of U.S. market share for EVs as well as showing much stronger margins than the competition, Tesla has managed to create un unrivaled competitive advantage.
News:
* Tesla has sweetened the deal on referral credits to include Model 3 and Model Y. The buyer gets a $500 discount and the person referring receives Tesla credits for use with supercharging, etc. If you or someone you know is going to buy a Tesla, you can always PM another Tesla-owning TMC member (such as myself) to get a code.
Yields on 10 yr. treasury bonds remained above 4% for the second day in a row on Friday
Percent of selling tagged to shorts remained moderate on Friday at 52%
Max pain on Friday was 267.50. More importantly, strike 272.50 was put dominated while strike 275 and above were call dominated. The sweet spot for the market makers would be to push TSLA a bit below 275, and Friday's 274.43 did the job.
Friday's options volumes
Over the course of four weeks we've seen nice price appreciation of TSLA, but the biggest change has been max pain getting much closer to the stock price. When the two are close, the market makers don't feel as much pressure to manipulate TSLA downward for Friday close. Chart courtesy of @JimS
For this coming Friday, max pain is 265. Even though max pain is slightly lower than last week, look at the transition point from put domination to call domination. Puts for this coming Friday dominated 275 and calls dominated at 277.50 and above. That higher transition point removes some incentive to push TSLA lower early in the coming week.
Here's the story behind the chart. In May and early June TSLA ran nearly $100 higher as Wall Street came to understand that Tesla was more than just an automotive company. In particularly, Tesla is an AI powerhouse. We saw some consolidation but then on Monday of this past week TSLA zoomed above 280 as the Q2 P&D Report came out very strong. Macro weakness has weakened TSLA's climb lately.
For the week, TSLA closed at 274.43, up 12.66 from the previous Friday's 261.77. It's been a good week, my friends. Hoping you enjoyed your weekend!
Conditions:
* Dow down 187 (0.55%)
* NASDAQ down 18 (0.13%)
* SPY down 1 (0.25%)
* TSLA 274.43, down 2.11 (0.76%)
* TSLA volume 113.6M shares
* Oil 73.57
* IV 54.8, 29%
* Max Pain 267.50 for Jul7, 265 for Jul14
* Percent of TSLA selling tagged to shorts: 52%
* Volume at 4pm closing cross: 3.7M shares
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TSLA chart above
QQQ chart above
Despite coming into the week with positive trading pre-market, TSLA dipped into the red shortly after opening. We now know that a redistribution of weights for the NASDAQ 100 Index is coming later in July. According to this article, the purpose of the redistribution is to reduce the weighting of the "Magnificent Seven" stocks that account for more than half of the NASDAQ 100's weight currently. Tesla is at the bottom of this list and should not be affected as much as Microsoft or Apple, but such a redistribution results in a hit to the price of these stocks as funds that mirror the index must sell a certain number of shares of the affected "Magnificent Seven" companies in order to rebalance. What you saw on Monday was an initial adjustment of the market to the expected short term effect of that redistribution later in July. According to the article referenced above, the amount of redistribution will be shared on July 14, and the redistribution will be completed by start of business Monday, July 24.
As I understand it, hedge funds that were shorting TSLA on Monday would plan to cover on Friday, July 21 during the closing cross by buying TSLA shares that the various funds need to sell. That can be a bit risky for the hedge funds, however, since Tesla will hold their Q2 2023 earnings report after market close on Wednesday, July 19, and a good ER could boost the stock price. Keep in mind that the NASDAQ 100 has a tiny following compared to the S&P 500. It the long run, this readjustment doesn't really affect TSLA stock price, but on days like Monday we do see a short-term affect. Here's a summary of how a few "Magnificent Seven" NASDAQ 100 stocks fared on Monday: Apple- down 1.09%, Microsoft-down 1.6%, Nvidia-down 0.76%, Amazon- down 2.04%.
What could get the market and especially TSLA out of the current doldrums? Before market open on July 12 the CPI numbers will be released. It's possible that the 12 month inflation number could drop from 4% to 3% in that report, due to a very inflationary month being dropped from calculations. Before you bet the farm, realize that analysts already know about that month being dropped and if the month over month inflation numbers are warm, the bigger story could be somewhat ignored. Nonetheless, the potential for an eye-opening number is still there.
Percent of TSLA selling tagged to shorts was way up at 64%. This time it wasn't market makers pulling the levers. Instead, you likely have hedge funds and other opportunist types shorting TSLA on Monday to front-run any dip caused by the redistribution of NASDAQ 100 weights.
Yields on 10 year treasury bonds fell to 3.96% as the rise above 4% was a brief one. Another rise above 4% is indeed possible in the near term, but yields haven't tended to stay above 4% very long in recent times.
Max pain Monday morning was 270. TSLA closed 39 cents below 270.
Monday's options volumes
Due to macro weakness and strange events such as the NASDAQ 100 redistribution planned for later this month, TSLA has been in a slow decline after topping 280.
Conditions:
* Dow up 210 (0.62%)
* NASDAQ up 25 (0.18%)
* SPY up 1 (0.25%)
* TSLA 269.61, down 4.82 (1.76%)
* TSLA volume 118.7M shares
* Oil 73.43
* IV 54.0, 25%
* Max Pain 270
* Percent of TSLA selling tagged to shorts: 64%
* Volume at 4pm closing cross: 1.4M shares
TSLA chart above
QQQ chart above
Tuesday was one of those weaker-than-the-NASDAQ days when there's no negative Tesla news to justify. I think primarily we're riding the downward momentum both from the Fed minutes of the previous FOMC meeting plus the announced NASDAQ 100 readjustments for the "Fabulous Seven" stocks. Nvidia was about even with the NASDAQ and Apple was down on Tuesday, so TSLA may still be feeling a bit of a NASDAQ redistribution hangover. TSLA normally has volume of 130-140M shares, and the day's 91M volume suggests there's less buying going on until things turn upward.
If you haven't already, check out this post by @The Accountant, where he lists this week's coming CPI, PPI, and Initial Jobless Claim dates and stats. My guess is that the run higher into close on Tuesday was traders positioning themselves for these numbers, particularly the CPI numbers on Wednesday, withy the hope that cool numbers lift the market out of its current funk (on the hope that the Fed will refrain from raising rates during the July meeting). My hope is for the main CPI year over year number to fall below 3%, which I think would get the market in a frisky mood. Analysts are expecting a 3.1% number, so my hope remains not far from expectations.
Yields on 10 yr. treasury bonds continue to remain just below 4%, with 3.98% on Tuesday
Max pain Tuesday morning was 270. The transition point between put domination and call domination was between 267.50 and 270.
Tuesday's options volumes
The upper bollinger band remains relatively horizontal, which might discourage immediate ascents through it's 284.09 number.
Conditions:
* Dow up 317 (0.93%)
* NASDAQ up 75 (0.55%)
* SPY up 3 (0.64%)
* TSLA 269.79, up 0.18 (0.07%)
* TSLA volume 91.6M shares
* Oil 74.82
* IV 53.0, 22%
* Max Pain 270
* Percent of TSLA selling tagged to shorts: 55%
* Volume at 4pm closing cross: 2.8M shares
TSLA chart above
QQQ chart above
Well, it's official now... the U.S. 12-month inflation rate as depicted by the CPI fell from 4% to 3%, according to the latest data (CNBC article here). That drop, along with a better than expected 0.2% month over month change in inflation pleased investors, and the market (particularly TSLA) rose pre-market. Keep in mind that these improvements are despite the existence of absurdly inflated shelter numbers. Let's compare TSLA's activity at market open to that of QQQ. TSLA sank immediately as the market opened while QQQ shortly began a nice climb. Moreover, notice that QQQ pretty much maintained its 2pm price into close but TSLA (unlike other stocks on the exchange) began a near-linear (with one bump) descent to close pennies below 272. When I see these linear dips for no reason I really do believe that someone had turned on the sledge-o-matic. Percent of selling tagged to shorts was a rather mild 51%. My take: I think some entities were gaming the sugar out of TSLA on Wednesday and borrowing from dark pools to hide their activity. If you were a big investment house you wouldn't be trading the stock like this, even if you were trying to lighten your load.
Who might be doing the pushdown? Max pain was 270, and so that market makers had some incentive. The big drop going into market trading and the linear dip during the final two hours suggests that some pros were involved, and I suspect hedge funds. On Monday we saw lots of TSLA shorting (presumably in the 273-269 price ranges) by hedge funds (most likely) who would be front-running the July reallocation of NASDAQ 100 stocks and would be planning to cover their short positions by buying from NASDAQ 100 composition funds on the 21st closing cross. Alas, that's a dangerous bet when Tesla is involved, especially with an earnings report on July 19. Let's say the hedge funds averaged shorting at 270 on Monday. They want TSLA below 270 on July 21 to make a buck. I believe they're pulling all the sledge-o-matic levers to achieve that aim. They may fail because good Tesla news keeps coming forward this week:
* Mexico's gigafactory is nearly completed with the paperwork, which would allow construction to begin soon
* GigaBerlin has just applied to expand the factory (likely from 500K vehicles to 1M vehicles/yr), according to this Alex Tweet
* Tesla is in serious talks with India to build a factory in which Gen 3 vehicles will be produced, according to this Reuters article
* Cybertrucks are being seen regularly testing on the streets, suggesting that production is not too far away
* Gigashanghai just produced its millionth Model Y, according to this Tweet
So, with Tesla absolutely dominating the EV business, and EVs taking over the automotive business in good time, and with Tesla being very much an AI company with its FSD, Dojo, and Optimus, Tesla's prospects keep improving while we see a slow decline in the stock price. Makes sense? Nope, at least not until you realize that there are billions of dollars at stake on Wall Street when it comes to getting TSLA's stock price to land at the right closing price come each Friday. Now I suggest we have hedge funds betting they can hold TSLA below 270 through July 21. Please don't let short-term TSLA weakness deter you. In the long run, the stock goes where it's valued due to execution and expectations of execution. I don't know about you, but Tesla expanding into the largest markets of this planet's future with enticing products (Gen 2, Tesla solar, etc.) is pretty darn exciting to me.
PPI numbers come out Thursday morning at 8:30am. Hoping to see hedge funds squirming in their seats if the market approves and TSLA follows them upward.
News:
* Elon launches xAI
Cool CPI numbers on Wednesday caused yields on 10 yr. treasury bonds to fall below 3.9%
Max pain on Wednesday morning was 270
Wednesday's options volumes
Wednesday was yet another low volume day, which makes manipulations easier. Notice how the lower bollinger band has risen with the rather small price changes of the past week's trading.
Conditions:
* Dow up 86 (0.25%)
* NASDAQ up 158 (1.15%)
* SPY up 4 (0.80%)
* TSLA 271.99, up 2.20 (0.82%)
* TSLA volume 94.1M shares
* Oil 75.91
* IV 51.4, 17%
* Max Pain 270
* Percent of TSLA selling tagged to shorts: 51%
* Volume at 4pm closing cross: ?
TSLA chart above
QQQ chart above
Thursday was PPI inflation numbers day and as 8:30am rolled around we saw that the Producer Price Index numbers came in at 0.1% increase month over month, cooler than the anticipated 0.2% climb. That's quite a nice accomplishment when following a month with -0.4% wholesale prices change. Moreover, according to this Tweet by TMC's @The Accountant , jobless claims hit the sweet spot between not too few (inflationary) and not too many (recessionary). Add in Wednesday's cool CPI numbers and we're seeing inflation coming way down without harming the economy, the proverbial soft landing. Let me remind you that wholesale prices that are measured in the PPI give us an idea where inflation is heading when the goods sold at wholesale enter the retail environment in the not-too-distant future.
Fed watchers will be interested to know that James Bullard will be stepping down as head of the St. Louis Fed in order to become dean of a new business school at Purdue University, according to this Fox News story. Bullard has been one of the most hawkish fed members under Powell.
As the day progressed, you can see how QQQ grew stronger up until shortly before market close. Notice the continued upswing in QQQ in after hours trading, which is a bullish sign. As for TSLA, it actually dipped into the red for much of the late-morning trading. Again, I think there's manipulations afoot with the walkdown of TSLA beginning at market open. Alas, NASDAQ and QQQ remained strong and climbed relentlessly. There could have been positive TSLA news after 2:30pm that I was not aware of, but I think more likely we just saw investors taking advantage of TSLA being held artificially low and the Wall Street pirates losing control of their capping/suppression effort. Naturally, we saw a dip in TSLA going into the close. You might conclude that TSLA's dip was just a response to the NASDAQ's and QQQ's dip, but let me point out that TSLA topped out at 3:36pm while QQQ topped out at 3:42pm, a full six minutes later. It looks to me more like TSLA's dip into the close was a catalyst for QQQ's last half hour dip.
Percent of TSLA selling tagged to shorts was again a mild 51%, but I suggest the pirates just moved their borrowing to black pools to avoid the FINRA scrutiny. More telling was the 4.9 million shares changing hands in the 4pm closing cross.
An alternative explanation for manipulations would be hedge fund anticipation on Friday's announcement of how much stock will be sold of the "Fabulous Seven" market leaders during the NASDAQ 100 readjustment. Some hedge funds might have been covering their initial shorts on Thursday from earlier this week, with plans to re-short at a later date.
In any event, market makers don't want TSLA above 275 and especially don't want it to close above 280 on Friday, so the day could be exciting if macros move higher.
Yields on 10 yr. treasury bonds fell again on Thursday, this time to 3.77%, reflecting the market's view that inflation is being tamed
Percent of TSLA selling tagged to shorts was again a mere 51%, but I suggest borrowing from dark pools allowed significant shorting on Thursday with the need for a 4.8 million shares 4pm closing cross to help with the covering
Max pain was again 270 on Thursday. You can see that strike 270 is nearly neutral for puts vs. calls and any higher strike moves into call domination territory. Notice how strong the 275 and 280 call walls are a day before options close Friday.
Thursday's options volumes
TSLA's climb on Thursday brought it about halfway between the mid and upper bollinger bands
Conditions:
* Dow up 48 (0.14%)
* NASDAQ up 20 (1.58%)
* SPY up 4 (0.79%)
* TSLA 277.90, up 5.91 (2.17%)
* TSLA volume 112.2M shares
* Oil 75.91
* IV 52.2, 21%
* Max Pain 270
* Percent of TSLA selling tagged to shorts: 51%
* Volume at 4pm closing cross: 4.9M shares
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TSLA chart above
QQQ chart above
TSLA definitely outperformed the NASDAQ on Friday as it closed up 1.25% to the NASDAQ close of down 0.18%. At 12:52pm on Friday TSLA rose above 285, but with options expirations at 4pm, the market makers went to work with the sledge-o-matic and pushed TSLA below 280 as 2pm approached and then played a game of whack-the-mole with TSLA. Alas, the buying pressure was too great and TSLA ran above 280 with about 15 minutes of trading left in the week to close at 281.38. I consider a failed manipulation (close below 280) as bullish because TSLA would have closed even higher without the intervention.
Friday was the day we were supposed to learn just how much each of the Magnificent Seven NASDAQ stocks (including TSLA) would be sold by close of next Friday for the NASDAQ 100 rebalancing. Word still has not come forward, and so we may see upward or downward pressure come Monday.
Other factors possibly affecting Monday's trading included news that the Cybertruck production line at Austin has just produced its first Cybertruck. Monday trading could be fun. Moreover, there were rumblings about Elon mentioning on an x.AI discussion that Tesla was making FSD development harder than it needed to be (with the implication that future progress will be much quicker). Elon Tweeting that version 12 of FSD will no longer be beta software add additional confidence.
My personal experience with FSD ver 11.4.4 has been quite favorable. Because I am conservative in what I allow my beautiful Model 3 to do in traffic and because Oahu, Hawaii, is a very crowded island with LOTS of corner cases, I seldom have allow FSD to drive across the island without an intervention. That changed this past week as I drove to a North Shore location along a winding coastline highway with zero interventions. There's still a detour near my house the FSD can't handle and it has never handled lanes correctly when passing northbound through the community of Wahiawa, but the progress continues quickly, with the smoothness of the driving experience now quite impressive.
Much of this past week's macro strength stemmed from attractive CPI, PPI, and unemployment claims pointing to low inflation and no imminent recession. I include the truflation.com graph below to add additional input on the progress bringing inflation under control.
truflation.com now says that the U.S. inflation rate has dipped to 2.15%. Nonetheless, expect Darth Powell to continue with his "we have a long way to go" rants right up until the Fed starts cutting rates, at which point the Fed pats itself on the back.
Wednesday, July 19, will be Q2 earnings report after market close. Analysts are forecasting earnings of 81 cents/share (compared to 85 cents/share non-GAAP income in Q1). Analysts are expecting weakness in Tesla's automotive margins due to recent price cuts. Analyst Pierre Farragu is one of those analysts expecting declining automotive margins in Q2 (see his detailed Tweet on the subject). Pierre expects Q2 to be the bottom for automotive margins, with improvements going forward. OTOH, some retail TSLA watchers such as TMC's @StarFoxisDown! see the possibility (in this post) of a beat in Q2. We'll see soon enough.
Keep in mind that it's dicey trying to anticipate any dip with TSLA. Q2 earnings could surprise to the positive and then off to the moon we go. Additionally, Model 3 Highland has been getting closer to production. When Tesla announces a reveal day for Highland (could come soon) the market will respond positively. Meanwhile, Cybertruck fever is spreading.
Percent of TSLA selling tagged to shorts was a moderately high 56% on Friday, suggesting plenty of manipulations
Yields on 10 yr. treasury bonds closed the week at 3.84%, as 4% yields were vanquished again.
Max pain Friday morning was 272.50, which was located very close to the put-domination to call-domination transition point. Strike 280 was a tall call wall that the market makers tried to protect Friday afternoon but fell short in doing so.
Friday's options volumes
Both the max pain and stock price lines continue to move up and to the right, which is what we hope to see . It's normal for them to be close together during a period of consolidation. Chart courtesy of @JimS
Max pain for this coming week is 245, which is too low to be particularly relevant. Strikes from 240 to 270 are pretty even in terms of puts vs. calls, and so the market makers are likely well hedged and not feeling much pressure. Look at that tall call wall at 300, though. That would be a price the MMs would defend with effort should TSLA approach it this week.
The tech chart shows the big gap up from the Q2 Production and Deliveries report and then the trading to return us to that level after a sag. That's four green days in a row now on increasing volumes.
For the week, TSLA closed at 281.38, up 6.95 from the previous Friday's 274.43. It's been another positive week for TSLA. Hoping you enjoyed your weekend with those you love.
This is my post 4000. If any of you wonder how I spend my evenings, now you know.
Conditions:
* Dow up 114 (0.33%)
* NASDAQ down 25 (0.18%)
* SPY down 0 (0.06%)
* TSLA 281.38, up 3.48 (1.25%)
* TSLA volume 120.1M shares
* Oil 75.42
* IV 54.2, 27%
* Max Pain 272.50 for Jul14, 245 for Jul21
* Percent of TSLA selling tagged to shorts: 56%
* Volume at 4pm closing cross: 3.0M shares
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