Papafox's Daily TSLA Trading Charts

[Papafox]

TSLA chart above

QQQ chart above

On Monday I think we did see Cybertruck production give TSLA a boost as the stock gained 3.20% compared to the NASDAQ's gains of 0.93%. Unexpected good news for investors was a settlement by TSLA BOD members that returns $735M of compensation to the company. The changes in total shares are small, but in a tiny way earnings per share should be just that much easier going forward.

Here are two views regarding the run up in price as the ER approaches. On the one hand, we saw 65% of TSLA selling tagged to shorts on Monday, which suggests the market makers were trying hard to minimize the stock's climb. A massive 5.9M shares trading during the 4pm closing cross suggests that lots of day shorting was being covered during the closing cross. OTOH, Wall Street analysts expect the Earnings Report to be a disappointment (earnings per share lower than in Q1) and so hedge funds may be prepared to push the stock price lower after the ER, even if there's some ambiguity to the results. The setup of the ER happening in a monthly options closing week with low max pain is an incentive for mischief. We'll just have to see how the ER results turn out. Many believe that if there is a post-ER dip that it can be remedied when cybertruck deliveries begin, provided that expectations are for a better Q3.

Percent of TSLA selling tagged to shorts ran up to 65% on Monday, suggesting lots of manipulations

Yields on 10 yr. treasury bonds have leveled off the past few trading days. Monday's closing yeild was 3.79%

Max pain on Monday morning was 250, which is irrelevant unless Wednesday's earnings report is really bad. The transition point between put-domination and call-domination is 275, which is a more relevant number to keep in mind.

Monday's options volumes

TSLA punched through the upper bollinger band on Monday but then closed below it. Volume continues to grow as we near Wednesday's ER.

Conditions:
* Dow up 76 (0.22%)
* NASDAQ up 131 (0.93%)
* SPY up 2 (0.35%)
* TSLA 290.38, up 9.00 (3.20%)
* TSLA volume 130.8M shares
* Oil 74.15
* IV 56.2, 37%
* Max Pain 250
* Percent of TSLA selling tagged to shorts: 65%
* Volume at 4pm closing cross: 5.9M shares

 

[Papafox]

TSLA chart above

QQQ chart above

Note: delayed report, TMC was down for maintenance late last night
With nearly 60% of TSLA selling tagged to shorts, the downward pressure continued to be applied to TSLA. You can see the big dips right after open and approaching 11am. Nonetheless, the macros turned strong as afternoon progressed and TSLA broke free to pass the NASDAQ before close.

The Q2 earnings report will be released after market close on Wednesday. Analysts are expecting 0.80/per share while many retail estimates are higher (see this post in TMC by @The Accountant ).

News:
* Sawyer Merritt Tweets that Tesla has secured orders for $418 million worth of megapacks in Massachusetts

Yields on 10 yr. treasury bonds have pretty much leveled off since getting safely below 4%. Monday's close was 3.78%

Max pain Monday morning was 247.50. The bulls are pushing 300 higher while the bears are buying 260 and 270 puts like they're going out of style.

Monday's option volumes

Six green days in a row have managed to bend the upper bollinger band to a steeper angle, which could be useful if the 2Q ER surprises to the high side.

Conditions:
* Dow up 367 (1.06%)
* NASDAQ up 109 (0.76%)
* SPY up 3 (0.74%)
* TSLA 293.34, up 2.96 (1.02%)
* TSLA volume 111.8M shares
* Oil 75.69
* IV 56.3, 38%
* Max Pain 247.50
* Percent of TSLA selling tagged to shorts: 59%
* Volume at 4pm closing cross: ?

 

[Artful Dodger]

Volume at 4pm closing cross: ?

Closing cross volume at 4pm on Jul 18, 2023: 5.37M shares

Cheers, @Papafox

 

[Papafox]

TSLA chart above

QQQ chart above

TSLA trading during market hours was highlighted by the stock getting within about $1.50 of 300 around 11:30am. This friskiness of TSLA did not sit well with the market makers and hedge funds, and so we saw 63% of TSLA selling tagged to shorts as (apparently) the Wall Street big dogs fought to keep TSLA safely below the very tall 300-strike call wall.

Shortly after close Tesla released the Q2 Earnings Report with a decent beat on non-GAAP earnings per share (0.91 vs. 0.81 expected and 0.85 in Q1). Initially, after-hours showed a big dip down, followed by a big recovery into the green then another big dip and recovery. After the gyrations, TSLA leveled off just below the red/green line as we awaited the conference call. My question is this? Why was TSLA trading so level at a loss after the beat? My guess is that someone was ironing out any upward pushes to maintain the story that the beat was actually a disappointment. Here's CNBC's take. Why would someone do this? Consider:
* Max pain is 260 and no big put walls until a descent to 270. That Mt. Everest call wall at 300 was getting way too close for comfort
* NASDAQ 100 rebalancing should take place during Friday's closing cross. Those hedge funds buying on Friday's close from the Nasdaq 100 index funds have likely already shorted the stock and will be making a nice profit as they buy to cover on Friday. The lower TSLA closes on Friday, the bigger the hedge fund profits from this front-running

Anyway, here's how both the spin and some actual disappointment of the earnings call evolved. Pierre Farragu suggested a Q2 miss but that Q2 would be the trough for this gross margins dip and so everything would be okay. At least one other analyst picked up on this Q2 is the trough idea and stated that Tesla needed to make it clear that Q2 was the bottom in terms of gross margins. The thing is that TSLA didn't miss in terms of earnings, and so there was no need for them to justify themselves. When Elon was asked for forward guidance regarding any possible future price cuts on vehicles, he gave the honest answer, which was to say it all depends upon the economy. If interest rates climb higher, price cuts might be needed to move vehicles, if the economy is good and rates hold stead or decline, maybe not. He mentioned that what happens in the short run is not of much consequence because with Full Self Driving coming, all vehicles sold in the near future are going to produce tons of profits when FSD is added. That argument briefly worked when Wall Street was enamored with AI, but this was an earnings call and Elon's sentiment received the typical pie-in-the-sky response.

Following the stock price during the conference call, one of the first downward spikes came when the question about transfer of FSD came up and Elon said yes, but in Q3 only. That reply was seen as a suggestion that Q3 had some demand problems and needed help. In reality, the situation is that many Model 3 owners are indeed ready to trade up, but most are waiting for Highland with V4 FSD hardware. Thus we see one of the unique challenges of Q3 will be moving sufficient numbers of Model 3s until the Highland upgrade comes about. Moving FSD from a Model 3 to another vehicle type might provide some demand traction, however. Efforts to modify the production lines (presumably including Highland preparations) will reduce output in Q3 and production will be somewhat below Q2's, which did not sit well with investors (but makes total sense in the long run).

What you'll notice is that the events in the Q2 ER that were seen as negatives happened in the conference call, and some negative adjustments were warranted. Nonetheless, there's the issue of TSLA trading below Tuesday's closing price BEFORE the conference call began, and I think that low trading number was a pretty easy manipulation to pull off with the relatively low volume of after-hours trading and Q2 results being a small beat but not a blowout. The Wall Street pirates reached into their bag of tricks and did what was necessary to turn a beat into a dip. Such is life as a Tesla retail investor.

The good news? Inflation is toast and the economy is still strong. Darth Powell and his band may well raise rates a quarter percent in July just for bluster (even though inflation continues to come down at a rapid rate). Powell will threaten more rate hikes, but as long as inflation continues its descent, another hike after that is not likely. When we start seeing deflationary months the Fed will be forced to start cutting rates, and that's when being an auto manufacturer really gets good again. It's coming. In the meantime, Tesla is also an AI company and we're going to continue seeing rapid improvements in FSD. Tesla is in early talks to license FSD to another auto maker. Tesla energy products margins are in line with vehicles now. There's a 10% energy improvement in 4680 cells. Lots of good stuff still to go.

Percent of selling tagged to shorts came in high at 63%, suggesting lots of manipulations

Yields on 10 yr. treasury bonds closed at 3.76% on Wednesday

Max pain Wednesday morning was way up at 260, reflecting an average upward shift in puts and calls

Wednesday's options volumes

The big question is where does the stock price go this week after a beat that was spun as a disappointment? Max pain is 260, but I suggest we're more likely to see the fade stop short of the 270 put wall and then a recovery can begin.

Conditions:
* Dow up 108 (0.31%)
* NASDAQ up 4 (0.03%)
* SPY up 1 (0.22%)
* TSLA 291.26, down 2.08 (0.71%)
* TSLA volume 291.26, down 2.08M shares
* Oil 75.36
* IV 56.6, 41%
* Max Pain 260
* Percent of TSLA selling tagged to shorts: 63%
* Volume at 4pm closing cross: 2.5M shares

 

[Papafox]

TSLA chart above

QQQ chart above

Can I see a show of hands from those of you who believe Tesla as a company is 10% less valuable than it was yesterday. Anyone? OK, I thought so. Nonetheless, TSLA got a haircut of over 10% at one point on Thursday and ended the day down 9.74%. That drop triggered the alternative uptick rule, and so on Friday we'll see how the stock trades without manipulative short-selling. This is an important issue because IMO various entities were shorting the "sugar" out of TSLA on Thursday. The alternative uptick rule makes it more difficult to push the stock down with shorting but using shorting to cap the stock remains an option on Friday. Percent of TSLA selling tagged to shorts was 53% on FINRA exchanges, but hedge funds sometimes borrow from dark pools to avoid exposing their shorting to FINRA counters. We did see a massive 9.1M shares trade hands during the 4pm closing cross on Thursday.

I suggest that even if TSLA missed on earnings Wednesday (which it did not), there was nothing to warrant such a steep decline. When I checked the stock price Thursday morning as it was hovering above 270, I was not surprised because this is where the market makers would push the stock if they had the leverage. A close closer to 260 brings the stock price right to Thursday max pain number, which should in theory be even better for the market makers, but I suspect the majority of the pushing below 270 involved the efforts of hedge funds who had already shorted the stock strongly in order to cover during Friday's closing cross (when I would expect index funds for the NASDAQ 100 to be selling TSLA).

With the NASDAQ falling over 2% for the day (but the Dow was up nicely), a 4% or 5% dip for TSLA would not be out of the question. I think we have this strange convergence of fears about the NASDAQ 100 selling on Friday, a bad macro day, over-the-top manipulations by market makers and hedge funds before a monthly options closing Friday (with unusually low max pain due to recent stock price gains), and a grandiose overreaction to anything negative that could be found in the earnings report or conference call. Sigh. This is part of the package deal of being a TSLA shareholder.

The good news is that this dip has preciously little to do with the company's prospects going forward. It's all about where the stock price ends at close on Friday. In fact, after Thursday's Q2 ER, we saw the following adjustments to analyst price targets:
* Mizuho Securities raised its TSLA price target from $300 to $330
* Wedbush raised its target from $300 to $350 and kept its strong buy rating
* Deutsche Bank raised its price target from $270 to $300

So, does TSLA deserve price target increases to anywhere between $300 and $350 or a 10% drop in value, due to the earnings report? That's your decision, but I know where I stand on the subject.

Yields on 10 year treasury bonds closed at 3.76%

Max pain Thursday morning was 260. Market makers don't want a dip below 260 and would have settled for 270, but the hedge funds who will be buying NASDAQ 100 index rebalancing shares on Friday's close want TSLA as low as they can get it come Friday close.

Thursday's options volumes

Thursday's big dip brought TSLA below the mid bollinger band for the first substantial dip below since early May.

Conditions:
* Dow up 164 (0.47%)
* NASDAQ down 295 (2.05%)
* SPY down 3 (0.66%)
* TSLA 262.90, down 28.36 (9.74%)
* TSLA volume 173.2M shares
* Oil 75.63
* IV 46.7, 5%
* Max Pain 260
* Percent of TSLA selling tagged to shorts: 53%
* Volume at 4pm closing cross: 9.1M shares

 

[Papafox]

TSLA chart above

QQQ chart above

It was quite a week. As we approached the Earnings Report, TSLA was flirting with 300, just a few dollars below. Tesla beat on the report, but I think the report would have had to have been really smooth and analyst-friendly to avoid a dip because some big dogs were shorting to front-running the Friday closing cross when a lot of NASDAQ 100 funds would be shedding shares (and they could be bought to cover), and the week turned out to be all about overcoming the surprise beat and still pushing TSLA lower. Granted, word that Q3 production would be lower than Q2's (because of production line upgrades) was seen by Mr. Market as a negative and granted that Wall Street has kittens when Elon say's don't worry about margins, FSD will make up for it in the long run.

We saw a willingness to bid TSLA back up at times on Friday ($265 would have been plenty low for the MMs), but someone was intent on pushing lower. At 4pm we saw no less than 12 million TSLA shares trade hands as the expected Nasdaq 100 redistribution happened.

Where do we go from here? On the one hand, when TSLA has a big dip you have some investors or funds sell simply because it is going down. There's momentum to deal with. OTOH, Given the quality of the Q2 ER, 260 is a price that can attract buyers. Max pain for this coming Friday is 275 with Puts dominating up through 270 strike. The market makers would prefer to see this stock go up, not down. The NASDAQ 100 speculation is over. On July 26, Wednesday, expectations are 92% that the Fed will raise interest rates another quarter percent. Although the market is definitely expecting a rate increase, TSLA may be punished for fears that more price cuts will result.

Hoping for a recovery day on Monday.

We saw 55% of TSLA selling tagged to shorts on Friday, even with the alternative uptick rule in effect, suggesting above normal levels of manipulations.

Yields on 10 yr. treasury bonds closed at 3.84% on Friday

Max pain was 255 on Friday, a number I originally though was just way too low to be relevant.

Friday's options volumes

That massive gaps between max pain and closing price early in the week was the result of the options expiration being a monthly expiration during a month was really big gains. The big gap between max pain and share price, combined with front-running of the NASDAQ 100 rebalancing presented the hedge funds with a potent opportunity for making money by pushing TSLA lower for Friday's close. The Q2 ER happened to be used as a tool to achieve the desired end.

For this coming Friday, Strike 270 is strongly put-dominated and even 280 is put-dominated. Max pain is 275.

For the week, TSLA closed at 260.02, down 21.32 from last Friday's 281.34. It's been a wild week. Hoping you enjoyed the weekend with those you love.

Conditions:
* Dow up 3 (0.01%)
* NASDAQ down 31 (0.22%)
* SPY up 0 (0.00%)
* TSLA 260.02, down 2.88 (1.10%)
* TSLA volume 159.2M shares
* Oil 77.07
* IV 45.5, 4%
* Max Pain 255 for Jul21, 275 for Jul28
* Percent of TSLA selling tagged to shorts: 55%
* Volume at 4pm closing cross: 12.3 million shares

 

[Artful Dodger]

At 4pm we saw no less than 12 million TSLA shares trade hands as the expected Nasdaq 100 redistribution happened.

**apologies for posting the below here if inappropriate. If so, MODS pls move to main. TIA

NASDAQ reported 28.3M shares traded at 4:00 pm, Fri Jul 21, 2023. This provides a huge insight into the amount of shorting which occurred between Wed and Friday Close.

**This morning, TSLA got it's new weight on the NASDAQ-100 NDX: 3.171

Note the Rebalance Weight announced on July 14th for TSLA was 3.4 (no other Magnificent 7 equity was down as much vs their Rebalance weight).

And at 9:00 ET this morning:

Nasdaq 100 QQQ Components​

#	Company	Symbol	Weight	Price	Chg	% Chg
1	Apple Inc	AAPL	11.616	192.73	0.79	(0.41%)
2	Microsoft Corp	MSFT	9.835	345.90	2.13	(0.62%)
3	Amazon.com Inc	AMZN	5.132	130.54	0.54	(0.42%)
4	NVIDIA Corp	NVDA	4.211	446.43	3.34	(0.75%)
5	Meta Platforms Inc	META	3.511	295.46	1.20	(0.41%)
6	Tesla Inc	TSLA	3.171	256.10	-3.92	(-1.51%)
7	Broadcom Inc	AVGO	3.085	900.86	4.11	(0.46%)
8	Alphabet Inc	GOOGL	2.744	121.16	1.14	(0.95%)
9	Alphabet Inc	GOOG	2.719	121.47	1.16	(0.97%)

Best part? The NASDAQ 'rules' which 'govern' these 'special rebalancing' events only apply to an equity once it's weight in the NDX goes beyond 4.5 (which only happened for TSLA a few days PRIOR to the index date in early July, after being well down vs NDX since Oct 2022.)

Magical coincidence? No, this was a jack. Bernie would be proud (then he'd Madoff w. ur $$).

 

[Papafox]

**apologies for posting the below here if inappropriate. If so, MODS pls move to main. TIA

NASDAQ reported 28.3M shares traded at 4:00 pm, Fri Jul 21, 2023. This provides a huge insight into the amount of shorting which occurred between Wed and Friday Close.

View attachment 959157

**This morning, TSLA got it's new weight on the NASDAQ-100 NDX: 3.171

Note the Rebalance Weight announced on July 14th for TSLA was 3.4 (no other Magnificent 7 equity was down as much vs their Rebalance weight).

View attachment 959160

And at 9:00 ET this morning:

Nasdaq 100 QQQ Components​

#	Company	Symbol	Weight	Price	Chg	% Chg
1	Apple Inc	AAPL	11.616	192.73	0.79	(0.41%)
2	Microsoft Corp	MSFT	9.835	345.90	2.13	(0.62%)
3	Amazon.com Inc	AMZN	5.132	130.54	0.54	(0.42%)
4	NVIDIA Corp	NVDA	4.211	446.43	3.34	(0.75%)
5	Meta Platforms Inc	META	3.511	295.46	1.20	(0.41%)
6	Tesla Inc	TSLA	3.171	256.10	-3.92	(-1.51%)
7	Broadcom Inc	AVGO	3.085	900.86	4.11	(0.46%)
8	Alphabet Inc	GOOGL	2.744	121.16	1.14	(0.95%)
9	Alphabet Inc	GOOG	2.719	121.47	1.16	(0.97%)

Best part? The NASDAQ 'rules' which 'govern' these 'special rebalancing' events only apply to an equity once it's weight in the NDX goes beyond 4.5 (which only happened for TSLA a few days PRIOR to the index date in early July, after being well down vs NDX since Oct 2022.)

Magical coincidence? No, this was a jack. Bernie would be proud (then he'd Madoff w. ur $$).

@Artful Dodger
Thanks for posting the correction. I actually posted 28M when I first put the post up, but it was late and I corrected it to another source that said 12M, which was in error. Yes, the 28 million traded Friday during the closing cross gives you an idea of how much front running from shorting was going on. Hedgies had plenty of buying power Friday afternoon during the close because they were closing their profitable short positions. Tesla is a manipulator's dream because of its volatility. It has so much volatility first because of the nature of deriving a value for a company that Wall Street just can't believe is still growing at nearly 50% per year and it's a company with lots of moving pieces (FSD, energy, robotics, etc.) that are not being priced in yet but will eclipse the value of the company some day. Secondly (and more importantly), TSLA has YUGE options exposure, and when the stock is moving up or down the delta-hedging compounds the rate of movement.

 

[Papafox]

TSLA chart above

QQQ chart above

The macros smiled upon TSLA on Monday with NASDAQ closing up 0.19% and the Dow closing up even more. That's all TSLA needed to add about $10 to its stock price and unwind some of Thursday and Friday's losses. I don't look at last week's losses so much as an overreaction by investors as I do a manipulative pushdown both to benefit the market makers and also the hedge funds who were focused on NASDAQ 100 rebalancing. As always, the manipulations lead to other selling but I choose not to believe everything was hunky dory last week as the efficient market repriced TSLA. Bullsugar.

Where TSLA goes in the coming week depends to a large extent upon the macros, especially after Wednesday's FOMC meeting news conference.

Personally, I'm looking forward to cybertruck's first deliveries and then Project Highland reveal later this year as catalysts.

News:
* Electrek says that Tesla has begun offering 7 year loans on Teslas. Elon says these longer term loans are a response to rising interest rates
* While three analysts have raised TSLA's price target since last week's ER and we heard little about the upgrades, one analyst at UBS downgraded TSLA and the media has spread the story far and wide

Yields on 10 yr. treasury bonds closed higher at 3.88% on Monday

Max pain Monday morning was 270. TSLA closed in after hours trading at 270.04. Any questions? That 270 put wall is enormous and the market makers want to close above it on Friday, even by a few pennies.

Monday's options volumes

Monday's climb brings TSLA nearly back to the mid-bollinger band.

Conditions:
* Dow up 184 (0.52%)
* NASDAQ up 26 (0.19%)
* SPY up 2 (0.45%)
* TSLA 269.06, up 9.04 (3.48%)
* TSLA volume 134.8M shares
* Oil 78.56
* IV 42.7, 0%
* Max Pain 270
* Percent of TSLA selling tagged to shorts: 50%
* Volume at 4pm closing cross: 6.4M shares

 

[Papafox]

TSLA chart above

QQQ chart above

Tuesday was an odd day for TSLA trading. I had originally expected TSLA to drift with the macros, but we saw selling pressure that came from who knows where. The market makers are not likely the culprits because 270 close on Friday would suit them very well. The seller(s) is probably not a big institution trimming TSLA shares because you can see really big gyrations in the stock price after open and a big institutional seller would not be selling in such a fashion to maximize the dip. The tie breaker could be the dip into close, which is a common technique used for manipulations.

Volume was low (112M shares), which would have made any manipulations easier.

The QQQ dip after 6pm would likely be some negative reactions to earnings calls. Microsoft was down in after-hours but Google was up, according to CNBC. Tesla did a disproportionately large reaction to the after-hours macro dip.

News for the day included:
* Sawyer Merritt Tweets that the Fremont factory has been idled (presumably for the planned factory production line upgrades). The potential good news here is that if factories like Fremont come back up faster than the market expects, this could be a catalyst for TSLA. The reverse of course would be true if the closures lasted longer than expected.
* Electrek says that Tesla now outsells Toyota in California

On Wednesday afternoon we get to hear from Darth Powell. The market has already baked in a quarter percent rate hike, but attention is on guidance for future raises and whether there will be a rate pause in the next FOMC meeting. Expect Darth Powell to be as hawkish as possible because that's how he operates, folks. Here's CNBC's take.

Yields on 10 yr. treasury bonds rose to 3.89% on Tuesday, in anticipation of Wednesday's FOMC meeting results

Max pain remained at 270 on Tuesday morning. The big options action is at 270 as well with a put wall that exceeds 50K contracts

Tuesday's options volumes

TSLA briefly climbed above the mid-bollinger band on Tuesday, only to fall below going into close

Conditions:
* Dow up 27 (0.08%)
* NASDAQ up 86 (0.61%)
* SPY up 1 (0.27%)
* TSLA 265.28, down 3.78 (1.40%)
* TSLA volume 112.1M shares
* Oil 79.12
* IV42.7, 0%
* Max Pain 270
* Percent of TSLA selling tagged to shorts: 53%
* Volume at 4pm closing cross: 2.3M shares

 

[Papafox]

TSLA chart above

QQQ chart above

'Twas another interesting day. TSLA's Mandatory Morning Dip got rejected pretty quickly, which led to a zoom into the green, even though the NASDAQ was still slogging through red. When the 11am dip you see in QQQ came about, TSLA lost the morning gains and most of the day was spent treading water. Of course the Fed moved forward with it's quarter percent rate hike, but word that the Fed might not raise at the September meeting caused a brief run into the green for QQQ and TSLA. Here's CNBC's take. In that article financial experts weigh in and suggest this is likely the end of the raise period and beginning of the hold the interest rate until time to go down. Alas, Darth Powell has some sixth sense that the market may be going up and he reliably rattles enough chains and speaks enough horrors so that the green goes away. As a few hours pass, the market separates what was actually decided by the Fed versus Powell's spin, and the market improves. Thus, TSLA recovered it's day's loss just prior to the end of after-hours trading. It's not as predictable as a Hallmark romance, but nothing that happened on Wednesday was a surprise, either.

News:
* Reuters says that in a challenge to Tesla, automakers plan to launch U.S. charging network (note: Ford was conspicuously absent from that group).

Yields on 10 yr. treasury bonds retreated slightly to 3.85% after Powell's address

Max pain on Wednesday was again 270. I still expect the market makers to persuade TSLA above 270 by Friday close if macro conditions permit.

Wednesday's options volumes

Compare the volume at present to the past six months. This is one of the quietest trading periods we've seen for TSLA in many months.

Conditions:
* Dow up 83 (0.23%)
* NASDAQ down 17 (0.12%)
* SPY up 0 (0.02%)
* TSLA 264.35, down 0.93 (0.35%)
* TSLA volume 95.2M shares
* Oil 78.94
* IV 41.9, 0%
* Max Pain 270
* Percent of TSLA selling tagged to shorts: 52%
* Volume at 4pm closing cross: 2.9M shares

 

[Papafox]

TSLA chart above

QQQ chart above

Up until about 1pm I thought TSLA closing above 270 on Friday looked very doable. Then the macros started descending and TSLA sank far faster. NASDAQ finished down 0.55% while TSLA lost 3.27%. Here's a little perspective to consider. TSLA has long been a momentum stock. When it's hot, people feel FOMO because of Tesla's brilliant future, and they're buying. When TSLA is descending, many investors look at the negatives, which often include EPS for the coming quarter or two, and disappointment can result. When the market starts looking at Tesla and trying to explain the negative stock performance, lots of incorrect conclusions can be drawn and those investors looking for quicker returns jump ship. The whole brilliant future vs. short term myopia of Wall Street focus on near-term EPS numbers accelerates the volatility of this stock.

And so the pressure is on to reverse TSLA's trajectory when it is climbing and flying high. TSLA has been climbing recently to a large extent because in the past few months Tesla's advantages over the rest of the automotive world has become apparent and we see Tesla stretching that lead, rather than the pack gaining on Tesla. The industry pretty much moving to Tesla's charging plug shows just how much leadership Tesla has not just in the EV world, but the overall auto world because it is now apparent that EVs are the future.

The reversal of Tesla's climb came, IMO, when the Q2 ER was released. We saw green, red, green, and then red, but the the after-hours stock price flat-lined just below the green/red line while we awaited the conference call. That was a clear manipulation after an earnings beat and with every less-than-terrific answer given during the conference call came more downward push. I believe a good number of the big dogs decided that TSLA was going down after the Q2 ER results (unless the results were stellar), and so we saw the 10% drop in a quarter when automotive non-GAAP gross margins ROSE from 18.1% to 19.1%.

Now we're seeing the FUD layered on. Articles such as this stinker from Electrek suggest that the range discrepancies could be upwards to 30%. Notice that the Society of Automotive Engineers who came up with that bogus number are a podcast supporter of Electrek. Some reports say Elon himself told Tesla's team to fudge the algorithm to make Tesla's range look better than it is. Reuters (of course) started the whole range fraud story with their "investigation". The thing is, though, the the EPA actually drives these vehicles in controlled conditions and recently came within 3% of previously stated range numbers. Was the EPA covering up a 30% discrepancy? Of course not. What's apparent is the timing of this issue. Some big Wall Street dogs want to make money on options losing value and an opportunity to hop aboard TSLA at a good price for the next run higher. The media reveals not a peep that there might be games being played here and it's all blamed on a "disappointing" Q2 ER or upon a devious CEO named Elon Musk who has pushed for gaming the EPA numbers in an over-the-top fashion that's the equivalent of dieselgate. What a steaming pile of horsesugar.

Anyway, remain alert because these bear attacks on TSLA happen from time to time and in the longer term they are overridden by Tesla's successes. Cybertruck is about to be released and it is eagerly awaited. Project Highland will make Model 3 a cheaper vehicle to build than Model Y, which sets Tesla up for either cutting prices further for greater demand or else accepting higher margins and bigger profits overall. Generation 3 vehicles will be manufactured no later than 2025 in Mexico and elsewhere, and the gross margins should be eye-popping while demand will be off the charts. Full Self Driving will become usable for its intended purpose at some point in the future. I drive in a corner-case-rich environment (Hawaii) and just completed a drive across the island and then back (on many city street and on highways) today with no need to intervene.

Yields on 10 yr. treasury bonds exceeded 4% on Thursday

Percent of selling tagged to shorts was 52% on Thursday. If a big hedge fund is manipulating, we have no idea what the actual percent of selling by shorts was because the dark pools data is hidden from our eyes.

Max pain on Thursday was once again 270. I suspect that enormous call wall at 270 is preventing the max pain number from moving down

Thursday's options volumes

Hopefully that lower bollinger band at 250.86 will not be called upon to support TSLA during this bear raid

Conditions:
* Dow down 237 (0.67%)
* NASDAQ down 77 (0.55%)
* SPY down 4 (0.66%)
* TSLA 255.71, down 8.64 (3.27%)
* TSLA volume 103M shares
* Oil 80.18
* IV 42.9, 1%
* Max Pain 270
* Percent of TSLA selling tagged to shorts: 52%
* Volume at 4pm closing cross: 3.5M shares

 

[Papafox]

TSLA chart above

QQQ chart above

This past week has been a wild week for TSLA, with 4% climbs and descents not uncommon. I had hoped the craziness of Wall Street big dogs manipulating TSLA would have calmed down after Monday's partial recovery from the crazy post-ER plunge, but no. Tuesday, Wednesday, and Thursday were red days to return TSLA to it's pre-Monday levels, and then on Friday we saw a 4.20% up day materialize on no news. What I suggest is that this is more than market maker manipulations, and I think some big hedge fund(s) made bets for this Friday and was working to maximize their return. Alas, the Tuesday, Wednesday, and Thursday retreat allowed max pain to dip by $5 on Friday, which made possible a runup to above 265 that could potentially have suited the needs of both market makers and hedge funds (the latter trying to push lower). This is just a guess.

What we did see was trading during the closing cross of a massive 8.2M shares. Something was afoot via Wall Street big dogs this past week (as with the week before) but we mere retail investors are not privy to know the details. If you look at next Friday's max pain chart, you can see the options bets are far smaller than the past two weeks. Perhaps this will be the proverbial follow the market week for TSLA. We often see retail push TSLA higher on Monday opens, and so it'll be curious if we see that weekend-generated buying materialize this Monday morning.

Looking at potential for macro positivity in the coming months, let me point out that Truflation.com is now showing 2.25% inflation rate in the U.S. Working against quick resolution to the inflation worries is rising oil prices. West Texas crude exceeded $80/barrel this past week. Nonetheless, we see low inflation on goods, strong demand still for workers, and some wage growth for workers as well. That strikes me as a recipe for a decent economy at least until something changes.

True to tradition, once yields on 10 yr. treasury bonds rose above 4% they dipped back below very quickly. Let's see if they stay below. Friday's yields closed at 3.96%

Max pain on Friday was 265, close was at 266.44. Hmmmm. What happened to the 50K high put wall at 270-strike and look at that 26K high put wall at 250? What happened is the market responded to the changing stock price on Thursday, which allowed the max pain to drop $5. The effective movement of puts from 270 strike to 250 strike allowed a nicely profitable close just above 265 on Friday. I sometimes speculate on hedge fund vs. market makers tug-of-war with TSLA price, but it's interesting to see how strong volatility and a close this week not far from last Friday's close generated a ton of options traffic and then allowed a close extremely near (and on the right side of) max pain. In other words, the week's unique trading of TSLA turned out to be a very profitable combination for the market makers and hedge fund options sellers. Hmmm.

Friday's options volumes

The trading this past week was not nearly as volatile as the week before

For this coming Friday, the call and put walls are not nearly as tall. IV is bouncing off 0%.

You can see that after the big fall following the ER, the stock price has been volatile both up and down, but staying within the 260s for the most part. I'm guessing lower option numbers this week compared to last might take some of the crazy volatility away this coming week. Fingers crossed.

For the week, TSLA closed at 266.44, up 6.42 from the previous week's 260.02. Hoping your weekend was a good one!

Conditions:
* Dow up 177 (0.50%)
* NASDAQ up 267 (1.90%)
* SPY up 4 (0.98%)
* TSLA 266.44, up 10.73 (4.20%)
* TSLA volume 108.6M shares
* Oil 80.58
* IV 40.8, 0%
* Max Pain 265 for both Jul28 & Aug4
* Percent of TSLA selling tagged to shorts: 50%
* Volume at 4pm closing cross: 8.2M shares

 

[Papafox]

TSLA chart above

QQQ chart above

Very little research-Time constrained
After two weeks of various parties manipulating the "sugar" out of TSLA, the stock was ready to trade a bit higher that the luke-warm NASDAQ and QQQ. Notice the typical retail buy right on Monday-morning open, to be followed by the also typical Mandatory Morning Dip. The one point of mystery was the 3.5 million shares traded during the 4pm closing cross, especially considering that TSLA volume was an anemic 84M shares. Oh well, it's summer vacation time now, time for the Wall Street tycoons to be relaxing in the Hamptons.

Yields on 10 yr. treasury bonds crept up to 3.96% on Monday

Max pain was 265 on Monday. Strike 265 is put-dominated, 270 is call-dominated, and of course TSLA is drifting within the no-man's land at present

Monday's options volumes

Low volume while TSLA sings the "stuck in the 260s doldrum blues"

Conditions:
* Dow up 100 (0.28%)
* NASDAQ up 29 (0.21%)
* SPY up 1 (0.19%)
* TSLA 267.43, up 0.99 (0.37%)
* TSLA volume 84.3M shares
* Oil 81.85
* IV 40.5, 0%
* Max Pain 265
* Percent of TSLA selling tagged to shorts: 49%
* Volume at 4pm closing cross: 3.5M shares

 

[Papafox]

TSLA chart above

QQQ chart above

TSLA fared worse than the NASDAQ with its 2.38% drop vs. the NASDAQ's 0.43% drop on Tuesday. High flyers generally didn't do so well on Tuesday as the market turned a bit negative about the economy. Google was down 0.92%, Amazon down 1.5%, while some Chinese automakers were down 4%. Nasdaq futures are down this evening.

Naturally, the negative press continues with CNBC all too eager to write about an investigation of Tesla steering loss complains.

News:
* Teslarati reports that Tesla is seeking $100 million federal funding in the construction of a semi-truck charging network between Texas and California

Yields on 10 yr. treasury bonds crept above 4% on Tuesday, to 4.07%

Max pain Tuesday morning was 265. Strike 265 is balanced between puts and calls, with put domination below and call domination above. The put wall at 260 is nearly 18K high, but a big macro down day could push us below.

Tuesday's options volumes

The volatile trading in the 260s continues as volume is quite low during these dog days of summer.

Conditions:
* Dow up 71 (0.20%)
* NASDAQ down 62 (0.43%)
* SPY down 1 (0.29%)
* TSLA 261.07, down 6.36 (2.38%)
* TSLA volume 3.1M shares
* Oil 82.20
* IV 41.6, 1%
* Max Pain 265
* Percent of TSLA selling tagged to shorts: 49%
* Volume at 4pm closing cross: 3.1M shares

 

[Papafox]

TSLA chart above

QQQ chart above

Note: Time constrained, little research
Wednesday's trading got off to a rocky start with a rating company downgrading U.S. government from AAA to AA+. Bond yields responded by rising above 4.1%. TSLA bucked the trend after market open and regained much of the pre-market trading losses before reversing. Nonetheless, with NASDAQ closing down 2.17%, we would normally see TSLA descend 2.1X the NASDAQ's dip (something well over 4%), but instead TSLA lost only 2.67%. Reasons for TSLA's resilience could have included:
* Support at the convergence point of the 100 day moving average and the lower bollinger band ($249.xx)
* Encouraging news about Tesla as Drive Tesla Canada here and others noticed the delay of Model 3 availability on orders in Europe to October (later for performance) and noted that this pattern is similar to what we have seen in the past when a vehicle is about to undergo a production line change. A highland reveal can indeed move the stock price.

yields on 10 yr. treasury bonds shot above 4.1% on Wednesday as a debt downgrade for the U.S. government led to a yield increase. Less secure investments must pay higher interest.

Max pain fell to 262.50 Wednesday morning. That strike was right at the intersection between put domination and call domination

Wednesday's options volumes

The news of a government debt downgrade sank the markets. Notice how TSLA got a nice bounce off the intersection of the lower bollinger band and the 100 day moving average. Saved by the technicals.

Conditions:
* Dow down 348 (0.98%)
* NASDAQ down 310 (2.17%)
* SPY down 6 (1.39%)
* TSLA 254.11, down 6.96 (2.67%)
* TSLA volume 101.1M shares
* Oil 79.28
* IV 43.5, 3%
* Max Pain 262.50
* Percent of TSLA selling tagged to shorts: 49%
* Volume at 4pm closing cross: 3.4M shares

 

[Papafox]

TSLA chart above

QQQ chart above

The low volume dog days of summer continued on Thursday, but TSLA substantially outperformed the broader indexes, which were down slightly. TSLA notched a 2.05% gain. Rumors on Twitter that Highland is moving toward production soon may have buoyed the stock.

In after hours, Apple beat on profits but posted its third month of net sales decrease and the stock price dropped. OTOH, Amazon rose 7% on a big beat. NASDAQ futures are up nicely for Friday.

Yields on 10 yr. treasury bonds rose to 4.17% on Thursday

Percent of selling tagged to shorts was 48%

Max pain Thursday morning was 260. The call domination at 260 and above gives the market makers some incentive to keep TSLA from climbing much on Friday.

Thursday's options volumes

Trading started at the 100 day moving average on Thursday and went up from there

Conditions:
* Dow down 67 (0.19%)
* NASDAQ down 14 (0.10%)
* SPY down 1 (0.29%)
* TSLA 259.32, up 5.21 (2.05%)
* TSLA volume 97.3M shares
* Oil 81.89
* IV 43.0, 3%
* Max Pain 260
* Percent of TSLA selling tagged to shorts: 48%
* Volume at 4pm closing cross: 2.6M shares

 

[Papafox]

TSLA chart above

QQQ chart above

The past week was a volatile one for TSLA, which closed down about 3.2% for the week. The NASDAQ lost about 3% over the same time period, suggesting that macro pressures were probably the lead reason for TSLA's dip this past week. On Friday, TSLA lost its gains for the day during the final two hours of trading and headed 2.11% into the red before close as QQQ/NASDAQ went negative during this time period and pulled TSLA down with it.

Volume was weak for TSLA this past week, which gives option sellers the ability to easily manipulate. In this post, @Curt Renz suggested an hour or so before close that the 260-255 range looked like the most profitable for option sellers. You can see TSLA trying to hold onto 255 at about 2:45pm but the macro weakness ended up pulling TSLA down.

The good news is that Tesla is preparing to break the summer doldrums with introduction of both Project Highland Model 3 and Cybertruck. Recent rumors out of China suggest a mid-August beginning of Model 3 Highland vehicles in Shanghai. Other factories will presumably switch over in a similar timeframe. Leaked photos of Cybertruck show the production line is shaping up in GigaTexas. At some point, the dip influenced by fears of lower production in Q3 will give way to anticipation of Project Highland Model 3 and Cybertruck.

On a personal note, I've been very time-constrained this past week and will likely be so for the coming week as well, so expect less detailed commentary.

TSLA selling tagged to shorts stood at 51% on Friday, suggesting moderate manipulations

Yields on 10 yr. treasury bonds dipped to 4.04% on Friday, reversing a climbing trend

Max pain Friday morning stood at 260, which was very close to the transition between heavy puts and heavy calls

Friday's options volumes

On Thursday max pain and stock price were aligned for end of week close, but a macro dip in the final 2 hours of trading denied the market makers their perfect end of the week.

For this coming Friday, max pain is again 260. You can see that 265 is rather neutral, but 270 is strongly call-dominated.

Besides it's volatility, one salient takeaway from the tech chart above is the low volume during these dog days of summer. Although the overall trend has been downward since the Q2 ER, notice the last three trading days and the support the rising 50 day moving average has provided.

For the week, TSLA closed at 253.86, down 12.58 from the previous Friday's 266.44. Hang in there, the summer doldrums will give way to Project Highland reveal plus Cybertruck beginning of deliveries. Can't wait. Hoping you enjoyed this weekend with those who matter to you.

Conditions:
* Dow down 150 (0.43%)
* NASDAQ down 50 (0.36%)
* SPY down 2 (0.45%)
* TSLA 253.86, down 5.46 (2.11%)
* TSLA volume 99.5M shares
* Oil 82.80
* IV 43.5, 4%
* Max Pain 260 for Aug4, 262.50 for Aug11
* Percent of TSLA selling tagged to shorts: 51%
* Volume at 4pm closing cross: 2.6M shares

 

[Papafox]

TSLA chart above

QQQ chart above

Time constrained today- no research
The big news that moved TSLA lower on Monday was Zach Kirkhorn's announcement that he is stepping down as Tesla's CFO. Replacing him will be Tesla's chief accounting officer Vaibhav Taneja, a Tesla veteran. Here's CNBC's take. Although the stock ventured down into the 240s on a knee-jerk reaction to the news, it recovered most of its losses by end of market trading as the implications became more clear. Zach will be replaced with a Tesla financial veteran, and Zach will remain with Tesla until year end to help with the transition. Those two bits of information help to remove many of the worries.

Meanwhile, the Dow was up 1.16% and Nasdaq up 0.61%. We TSLA shareholders were lucky that Zach's departure announcement took place on a strong day for the market. Shorts could have really had a party with TSLA manipulations if Monday had been a down day for macros. Despite the news, TSLA's volume remained at an anemic 110M shares.

Yields on 10 yr. treasury bonds dipped to slightly above 4% on Monday

Max pain was 260 Monday morning. Looking at the chart, the relatively-neutral no-man's land between puts and calls was bounded by 255 on the low side to 260 on the high side. This is the same range that @Curt Renz gave on Friday as a likely target for the market makers, so it looks like Curt's methodology was good. Only a big macro dip kept the MMs from hitting their target.

Monday's options volumes

TSLA sank below the 50 day moving average on Monday but the stock bounced very near to the lower bollinger band. On a positive note, the red 200 day moving average, which was sinking throughout the recent rallies, has finally started to turn upwards.

Conditions:
* Dow up 408 (1.16%)
* NASDAQ up 85 (0.61%)
* SPY up 4 (0.87%)
* TSLA 251.45, down 2.41 (0.95%)
* TSLA volume 110.5M shares
* Oil 82.03
* IV 42.3, 2%
* Max Pain 260
* Percent of TSLA selling tagged to shorts: 52%
* Volume at 4pm closing cross: missing

 

[Artful Dodger]

Volume at 4pm closing cross: missing

Closing Cross Volume at 4pm: 3.32m shares

Thanks for all you do for us, @Papafox

Cheers!