Papafox's Daily TSLA Trading Charts

[Papafox]

TSLA chart above

QQQ chart above

Time constrained post

Thursday morning brought a PCE inflation report that was about as expected. Given the recent job numbers I'm happy with an "as expected" PCE report. It's one more reason why the Fed should stand down from any additional raise come September. Also, the Atlanta Fed on Thursday said that interest rates are high enough now and need not go higher. The broader markets were choppy as the day progressed, with the Dow closing down 0.48% and the Nasdaq closing up 0.11%, making TSLA's 0.46% gain look okay. Within 15 minutes of market close TSLA ascended through 260, but a big macro dip into close stole much of TSLA's gains. I contend that we're seeing upward pressure on TSLA this week but the market makers are taking every opportunity for a stealthy negative push in an effort to minimize the Friday close amount that is above $250.

After hours, Tesla announced that Model 3 highland has been unveiled for Asian, Australian, and European customers. Apparently, some deliveries will begin in October and the new highland versions will be priced higher than the current Model 3. My expectations are that the Highland Model 3 is good enough looking and attractive enough to initially sell out production at that higher price point, but since Highland is undoubtedly cheaper to produce, Tesla can (and will) lower the price later as needed to keep moving the inventory. Personally, I like the look of the vehicle and its higher starting price. That higher price will help Tesla clear out the old-style Model 3 in China and Europe with less discounting.

To get a nice rundown on the Highland version of Model 3, consider viewing one of the following webcasts:

On Tesla Daily, Rob Maurer did a quick run through a list of changes. Rob is a bit concerned that with likely reduced number of M3 deliveries and discounting of existing inventory, September could have a negative effect upon Q3. He's bullish long term, though.

The nicest way to get a more detailed introduction to Highland with lots of detailed shots may be to view Farzad Mesbahi's webcast on the subject. During the rundown, followers of his live show kept chiming in "I want one". I think the redesigned Model 3 will indeed give Tesla's lineup a nice shot in the arm until the Gen 3 vehicles can start being produced in GigaMexico.

In TMC's main investor forum, the discussion is covering a cut in FSD price from $15K to $12K and concerns about U.S. production timetable for M3 Highland (since we have heard no official word about what's going to happen at Fremont. In China S&X received some price cuts (free paint) and now Model X most basic configuration qualifies for the IRA tax credits. With Model 3 moving up market a bit with better range, looks, and a screen for backseat passengers, it probably makes sense to do something to S&X to keep M3 Highland from stealing too many of these higher-priced models customers. Mr. Market could be unhappy until the Highland timetable in the U.S. is sorted out satisfactorily. The market makers might indeed get their shot at below 250 this week.

Yields on 10 yr. treasury bonds dipped to 4.11% on Thursday

Max pain was once again 245, which makes the market makers salivate at the though of a Friday close of 249.98.

Thursday morning's options volumes

TSLA has been hanging in there around the 50 DMA following Tuesday's big run higher.

Conditions:
* Dow down 168 (0.48%)
* NASDAQ up 16 (0.11%)
* SPY down 1 (0.15%)
* TSLA 258.08, up 1.18 (0.46%)
* TSLA volume 108.6M shares
* Oil 83.85
* IV 44.6, 10%
* Max Pain 245
* 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: 7.73m shares (including -$3 drop in ~15 min)

Here's TSLA and QQQ (Nasdaq-100 ETF) from 4:00 pm on Thu, Aug 31, 2023:

Cheers!

 

[Papafox]

TSLA chart above

QQQ chart above
Friday beckoned with the news of both an amazing upgrade to Model 3 (Highland Project) and price cuts on S/X and FSD. Retail investors mostly kept TSLA above the red/green line until market open, and then the big dogs got involved and the downward push began. Max pain was 247.50, which was reached about noon and then held until about 2pm. At that time TSLA felt a downdraft from the broader market and dipped into the lower 240s. The market makers were in no mood to see a large number of 245-strike puts paid out, and so they made sure that as the broader market recovered TSLA made it above 245. Closing price was 245.01. Imagine that.

Just to clarify, I held no certainty that TSLA would be pushed below 250 this week and at times really didn't expect it to be (even though there was max pain incentive for MMs to do just that), but when Tesla releases both good news (Highland M3 released for Europe and Asia) and bad news (S/X plus FSD price decreases, no Highland M3 yet for U.S.), it's pretty easy for the MMs to push down on uncertaintly, especially with the media giving the most emphasis to the negatives. Thursday night I finally expected a pushdown below 250 because of how the news would likely be spun.

The best summary of what's going on with Project Highland release and price action IMO came from Jeffrey Lutz appearing on this Brighter with Herbert video. In a nutshell, Lutz says that when Tesla issues both good and bad news at the same time, the Tesla-hostile media will emphasize the bad news in order to get more clicks. Lutz says that when products such as Tesla vehicles have become global products, you release new products simultaneously because otherwise you risk Osborning your product in the markets where its not released. Lutz felt that Tesla didn't plan to delay the release of Highland M3 in the U.S., something just happened that prevented it. Perhaps it was a supplier issue, perhaps an assembly line issue, and perhaps it was a decision to change the product (such as adding castings) because U.S. manufacturing is more expensive than Shanghai manufacturing.

Anecdotal evidence (what my friends are doing) suggests that the lower price for Models S and X are having a big effect as a number of people I know have just placed orders for one or the other. A month remaining in Q3 suggests there will be time to deliver a large number of these premium vehicles as demand heats up. Looking at the previously-large number of Model Xs in Honolulu inventory, I see only 3 left, and all of these are priced above the $80K maximum for the IRA credit.

As for Monday's TSLA trading, we should be helped by news (see this Teslarati article) that Tesla sold over 84K Shanghai-made vehicles in August, a jump of 31% over July. TSLA lost lots of value earlier in 2023 over word that the economy in China was tanking and so were vehicle sales, but this latest news provides a positive outlook for China deliveries going forward.

Yields on 10 yr. treasury bonds rose to 4.18% on Friday

Max pain was 147.50 on Friday. It looks like our friendly MMs added some push to the downward movement so that level was reached around noon, but a macro dip pushed TSLA lower in the final two hours.

Friday's options volumes

Friday's dip was deep, but not as strong as Tuesday's rally, and so TSLA closed up for the week, with max pain and stock price getting close to each other once again.

For this coming Friday, we have lots of high strike price calls (including many 300s) that are left over from an earlier time, since I believe this is a monthly expiration. The big call wall at 250 will be potentially fought by the market makers. Much can happen early in the week that can still work out fine for the MMs, though, so we don't typically see the manipulations become strong until the week has sorted out a bit. In other words, if TSLA was to run above 250 on Tuesday there is still enough week left for the options market to adjust to the new reality and the MMs can still end up doing well.

I'm glad to see that the red 200 day moving average is now drifting upward. Let's get TSLA above the blue 50 DMA and we'll have a positive trend going.

For the week, TSLA closed at 245.01, up 6.42 from the previous Friday's 238.59. Hoping you enjoyed a delightful weekend with those who matter!

Conditions:
* Dow up 116 (0.33%)
* NASDAQ down 3 (0.02%)
* SPY down 1 (0.19%)
* TSLA 245.01, down 13.07 (5.06%)
* TSLA volume 132.1M shares
* Oil 85.86
* IV 44.8, 12%
* Max Pain 247.50 for Sep1, 245 for Sep8
* Percent of TSLA selling tagged to shorts: 52%
* Volume at 4pm closing cross: 5.6M shares

 

[Papafox]

TSLA chart above

QQQ chart above

What a difference a trading day makes. On Friday we saw the expected pushdown of TSLA as the market makers wanted the stock price below 250 and an excuse for that pushdown (S&X price cuts) facilitated the dip. Come Tuesday, you can see that retail investors were tentative in pre-market but the big dogs started snapping up TSLA shares with the opening bell. When the dust settled, TSLA had regained Friday's losses, allowing the market makers to profit on Friday and big dogs to buy TSLA at a discount. Anyone surprised?

Tesla's gain for the day was 4.69%. Although QQQ closed in the green, Nasdaq closed slightly in the red. We have been seeing heavy trading in the closing cross minute at 4pm with 5.4M shares trading during that minute on Tuesday. The low 45% percent of selling tagged to shorts on Tuesday could be partially explained by those shorting TSLA resorting to dark pools for borrowing their shares. A hefty 5.4M shares traded in the final minute suggests manipulations, but the other part of the story could simply be that market makers weren't trying too hard to hold TSLA down on Tuesday. It'd be better to let it run to a more market-friendly price early in the week so that it can be tweaked getting closer to Friday's close.

Of course the good news over the weekend was the strong China deliveries in August. On Tuesday, we got to see that Tesla has already matched European deliveries of last year:

From this Sawyer Merritt Tweet, we see Tesla registrations in Europe have already surpassed those of 2022

News:
* This Drive Tesla Canada story says that North America won't see the Highland Model 3 until early 2024. Crash testing in October was given as a partial explanation. I'd be somewhat careful about taking the story as fact until additional verification takes place

Yields on 10 yr. treasury bonds rose above 4.25% on Tuesday

Percent of TSLA selling tagged to shorts was a mere 45% on Tuesday. Yellow line is stock price and blue area on top of grey (and magenta) is percent of selling tagged to shorts.

Max pain Tuesday morning was 245. That number should rise on Wednesday as the market adjusts to Tuesday's TSLA strength.

Tuesday's options volumes

What the market (and market makers) stole on Friday, they gave back on Tuesday. Once again, TSLA is gravitating toward that 50 day moving average line.

Conditions:
* Dow down 196 (0.56%)
* NASDAQ down 11 (0.08%)
* SPY down 2 (0.43%)
* TSLA 256.49, up 11.48 (4.69%)
* TSLA volume 128.0M shares
* Oil 86.77
* IV 46.0, 16%
* Max Pain 245
* Percent of TSLA selling tagged to shorts: 45%
* Volume at 4pm closing cross: 5.4M shares

 

[Papafox]

TSLA chart above

QQQ chart above

Wednesday saw a dip in the macros as inflation fears took hold. Basically, the market gets a knot in its knickers every time the economy is doing too well (inflation fears) or not well enough (recession fears). Mr. market likes the predictable middle ground. On Wednesday this Reuters article covers the stronger than expected service-sector data released in the ISM report. The fears are that the strong economy will prolong the need for keep interest rates high. The other worry for investors is that oil prices have risen quite quickly lately. This oilprice.com report says that much of the increase is due to a decrease in inventory in the United States plus apparently successful efforts by Russia and Saudi Arabia to curtail production enough to send prices higher.

What we saw was a slow dip in QQQ initially, but TSLA dipped much more deeply and definitely was down more than its normal 2.1X beta. The dip bottomed out just a tad above 245. Hmm, sounds like a dip that might have received some juice from the market makers to get it back closer to max pain. Alas, the big dogs were buying TSLA on Tuesday and you can see that TSLA began a recovery around 10:30am whereas QQQ didn't bottom out until afternoon. I suspect the big dogs were buying the dip once again on Wednesday. The good news is that buying gave TSLA a better recovery than QQQ or Nasdaq and TSLA's 1.78% dip was considerably less than 2.1X the Nasdaq's 1.06% dip.

News:
* @Tesla China Analyst Tweeted that Tesla Shanghai is (maybe soon will be) producing 1200 new Model 3s/day. Consider this a rumor until verified
* Joe Tegtmeyer Tweeted that it looks like GigaBerlin is not producing Model Ys while new production equipment is being installed on Wednesday
* Tesla Asia Tweeted that GigaShanghai just produced it's 2 millionth Tesla and the second million only took 13 months
* Rob Maurer ran the numbers and drew conclusions of decent China production after hearing of the 2 millionth Tesla being made in China

Yields on 10 yr. treasury bonds have continued their recent increase as inflation fears have increased.

Max pain Wednesday morning was 247.50. Interestingly, there's a big call wall at 245 and a big put wall at 250, and max pain is splitting the difference.

Wednesday's options volumes

See that series of trading days in mid-August when TSLA was running higher one day, lower the next day, with big daily changes but staying within a relatively small trading range? I'm wondering if we're in another of those cycles. It's a great way to amp up the options buying, both puts and calls, and then close at a profitable price for the options sellers.

Conditions:
* Dow down 199 (0.57%)
* NASDAQ down 148 (1.06%)
* SPY down 3 (0.67%)
* TSLA 251.92 (1.78%)
* TSLA volume 115.9M shares
* Oil 87.25
* IV 46.2, 16%
* Max Pain 247.50
* Percent of TSLA selling tagged to shorts: 52%
* Volume at 4pm closing cross: 3.6M shares

 

[khorton]

* Joe Tegtmeyer Tweeted that it looks like GigaBerlin is not producing Model Ys while new production equipment is being installed on Wednesday

Typo alert: the above should be GigaTexas, not GigaBerlin

 

[Papafox]

TSLA chart above

Nasdaq chart above- market hours trading (QQQ chart got gorked from an after-hours big dip)

Thursday was a down day for NASDAQ, which closed down 0.89%. Normally, you'd expect TSLA's 2.1X multiplier to result is a loss of about 2% on such a day, but TSLA once again outperformed the NASDAQ with a much lower loss of 0.17%. Apple pulled the Nasdaq down on Thursday as China announced that government officials would not be allowed to use iphones and the embargo may soon be extended to state employees. My hunch is that China is retaliating for Apple doing the sensible thing and moving some of its manufacturing out of China as hostilities have heated up. Apple closed down nearly 3%.

Comparing the two charts above you can see a disproportionate dip of TSLA going into market open, but a much stronger recovery of TSLA compared to Nasdaq as the day progressed. In fact, TSLA actually went green a number of times Thursday afternoon. I see the situation as much the same as Wednesday's trading with market makers giving the push to slightly below max pain at market open and then big dog institutional investors loading up on TSLA shares during the sale.

Consider checking out this video podcast by Farzad Mesbahi where he graphed price of EVs vs. range. The line you see touching the pointer represents the average gain of range as price rises. What Mesbahi was showing is the Teslas (shown in red) are all above that average line in terms of range for their price points. His point is that Tesla is succeeding among other reasons for offering more performance for the dollar than other car makers.

News:
* This CNBC article tells of Tesla's big deal with Hilton. The hotel chain is going to install somewhere between 12,000 and 20,000 Tesla chargers (capable of both NACS and CCS) throughout the various hotels, with a minimum of 6 chargers per hotel.

Yields on 10 yr. treasury bonds thankfully dipped on Thursday to 4.22%

Max pain Thursday morning was 245. Looking at the open interest chart above, you can see how significantly the puts have been catching calls at strike 245, compared to earlier in the week. Consequently, there's not a lot of incentive for a pushdown to 245 on Friday. Wednesday's big put wall at 250 has faded away. Thus, the market makers just have some incentive to keep TSLA below 255 on Friday and lots of incentive to keep the stock below 260.

Thursday's options volumes

The week really has turned into one of those up and down rollercoasters going nowhere, just as we saw in mid-August. To be fair to TSLA, the past week has been a difficult one for the macros and yet TSLA has mostly held its ground.

Conditions:
* Dow up 58 (0.17%)
* NASDAQ down 124 (0.89%)
* SPY down 1 (0.31%)
* TSLA 251.49, down 0.43 (0.17%)
* TSLA volume 113.5M shares
* Oil 86.28
* IV 47.5, 20%
* Max Pain 245
* Percent of TSLA selling tagged to shorts: 48%
* Volume at 4pm closing cross: 3.6M shares

 

[petit_bateau]

News:
* This CNBC article tells of Tesla's big deal with Hilton. The hotel chain is going to install somewhere between 12,000 and 20,000 Tesla chargers (capable of both NACS and CCS) throughout the various hotels, with a minimum of 6 chargers per hotel.

If it helps, here are the existing charger statistics for comparison so as to put the Hilton deal in perspective. (If it doesn't help, please delete or relocate). It is quite material.

 

[Artful Dodger]

(QQQ chart got gorked from an after-hours big dip)

Here's the NASDAQ chart for QQQ at the Closing Cross: (4:00 pm ET)



Thanks again for all your steady work, @Papafox Greatly appreciated!

Cheers!

 

[Papafox]

TSLA chart above

QQQ chart above

Friday's trading should have been no great surprise to TSLA watchers. TSLA quickly rose to 256 on a day when the market makers wanted a close closer to the 245 max pain number (someone else's source showed a max pain of 247.50). I get my max pain number from www.maximum-pain.com . Keep in mind that some observers, such as TMC's @Curt Renz compute more up to date likely max pains. The max pain that I used is issued before market open and uses the previous day's trading for computations. The market makers obviously are operating on a more up to date set of numbers that includes the current day's options activities.

In any event, TSLA ended the week up about 1.4%, compared to the NASDAQ being down nearly 2%. I mention this disparity because it made pushing TSLA down on Friday just that much easier. On the TSLA chart, I drew a line that perhaps shows the manipulation push to get TSLA closer to the desired max pain. Notice these manipulation downward pushes can be quite linear, and I think that could be because some MM has turned on the sledgeomatic machine, which is doing the short-selling as necessary. Overall, we saw some large enterprise buying TSLA this past week. After the Tuesday rally, we typically saw a Mandatory Morning Dip (likely MM induced), and then substantial buying of that dip which allowed TSLA to do MUCH better than the Nasdaq this past week. So, who was the whale feeding on TSLA? One possibility was Morgan Stanley or some Morgan Stanley treasured client who knew that Adam Jonas was going to release this upgrade to TSLA from $250 to $400. Whenever Goldman-Sachs or Morgan-Stanley does a big TSLA upgrade, the market takes notice. Monday could be fun.

Let me suggest traders to be on their toes this coming week as information from the Walter Isaacson biography of Elon is pre-released and then the biography itself is released on Wednesday. We've learned that Gen 3 will initially consist of both fully-autonomous and driver-enabled versions that will initially be built in Austin, rather than in Mexico. Thus, the GigaMexico delay is not the big threat we initially thought. More information, both positive and negative, will come out this week.

On Wednesday we learn the CPI numbers for August and on Thursday that month's PPI numbers come out. The market is keenly interested in the numbers this month since we've seen worries of prolonged high interest rates pulling the markets lower.

News:
* Rob Maurer Tweets that Tesla Shanghai has produced 80,832 vehicles in August, show that the transition to highland Model 3 has been far smoother than most anticipated

Yields on 10 year treasury bonds closed at 4.2% on Friday, after peaking on Wednesday

Percent of selling tagged to shorts came in at 49%

Max pain Friday morning was 245. That strike was slightly call dominated. OTOH, strike 250 was slightly put-dominated. Thus, there wasn't one apparent best closing price.

Friday's options volumes

The week's max pain chart is illuminating because even though this past week had lots of ups and downs for TSLA, the closing price on Wednesday, Thursday, and Friday was a steady stairstep down to near max pain.

Max pain next Friday is 230. That number will likely rise as traders anticipate Friday's closing price.

The difference between that group of volatile up and down days starting about August 22 and this past week is the in the latter, the weekly closing prices were all lower, as if someone was working to bring the stock price closer to max pain by Friday. Notice, too, how the blue 50 day moving average was a magnet in the previous week and then a ceiling this past week.

For the week, TSLA closed at 248.50, up 3.49 from the previous Friday's 245.01. It's been a turbulent but still positive week, my friends. Hoping your weekend was a good one!

Conditions:
* Dow up 76 (0.22%)
* NASDAQ up 13 (0.09%)
* SPY up 1 (0.15%)
* TSLA 248.50, down 2.99 (1.19%)
* TSLA volume 117.5M shares
* Oil 87.51
* IV 46.4, 17%
* Max Pain 245 for Sep8, 2320 for Sep15
* Percent of TSLA selling tagged to shorts: 49%
* Volume at 4pm closing cross: 2.8M shares

 

[Papafox]

TSLA chart above

QQQ chart above

Anyone for a 10% ($25) rise in the TSLA stock price. Yep, I thought so. The Morgan-Stanley note had the desired effect and we saw every bit of a bump we were hoping for.

Part of the reason TSLA ran higher so well on Monday was that the Nasdaq had a good days as well. Make no mistake, TSLA's big run higher was part of the reason why NASDAQ was up on Monday. With support from the macros, TSLA kept climbing until it threatened to reach 275 in late afternoon. If you look at the open interest (max pain) chart below, you'll see that as TSLA was finishing the day, 275 was the one nearby strike which was strongly calls with few puts. That's the incentive for the MMs turning on the capping machine, IMO. The percent of selling by shorts chart below suggests nothing was happening in manipulations, but I suggest other data including 4pm closing cross volume of 5.9M shares suggests there was plenty of effort extended to trim TSLA's climb so that it closed below 275. Wasn't the dip into close caused by macros, however? Using the Yahoo charts, it looks like TSLA topped out at 3:28pm and Nasdaq topped out closer to 3:40pm. I'd be more inclined to think TSLA's dip from its high led to the Nasdaq dip into close, rather than the other way around.

I really feel that Monday's strength greatly strengthens the thesis that last week's TSLA strong recoveries from the Mandatory Morning Dips was the result of front-running by those who were clued in on this Weekend's Morgan-Stanley note and rise of price target from 250 to 400. With a 550 bull case target, this stock at 270ish looks like it has plenty of upside potentially ahead.

The Adam Jonas price target rise was a particularly potent posting because it rekindles the excitement of Tesla being an AI company and deflects worry about Tesla being an auto manufacturer at a time of higher interest rates. With China and Europe delivery data looking good in Q3, there's reason to pause on the myopic short-term worrying and consider the company's brilliant future.

Naturally, the market makers will try for a walkdown in the price as the week progresses. If CPI and PPI on Wednesday and Thursday are hotter than expected, they'll run with the ammo. OTOH, cool numbers would suggest there's more upside this week. It's going to be interesting.

Does the plunge in selling tagged to shorts make sense on such a big run higher? No! I suspect market makers and hedge funds were borrowing from dark pools or naked shorting in an effort to slow down Monday's climb. Percent of FINRA selling tagged to TSLA shorts was a low 42%

Yields on 10 yr. treasury bonds closed up at 4.29%

Max pain Monday morning was 232.50. That number is irrelevant at the moment. What's relevant was the lowest big call wall that market makers had a chance of blocking. That number turned out to be 275, which somehow lacked the puts of 270 and 280.

Monday's options volumes. Looks like it was quite a busy day!

TSLA's 10% climb put it well above the upper bollinger band. After two days above the band the stock usually pulls back to within the band or else the climb is so strong that the upper bb spends prolonged time chasing the stock price. Notice that the volatile up and down grouping that began around Aug 22 resolved in a big climb, as did this one. One possibility is that another strong up and down band of days forms after Monday's big run higher. The optimistic view would be that Monday's rise is the start of "brilliant future for an AI company, part 2".

Conditions:
* Dow up 87 (0.25%)
* NASDAQ up 156 (1.14%)
* SPY up 3 (0.66%)
* TSLA 273.58, up 25.08 (10.09%)
* TSLA volume 173.2M shares
* Oil 97.28
* IV 48.0, 22%
* Max Pain 232.50
* Percent of TSLA selling tagged to shorts: 42%
* Volume at 4pm closing cross: 5.9M shares

 

[Papafox]

TSLA chart above (note: a glitch in the after-hours Nasdaq-produced chart required that I use this Yahoo chart of market hours instead)

QQQ chart above

For the first half hour of market trading TSLA defied the red QQQ and NASDAQ and ran as high as 278. Alas, the pull of the macro forces plus some shorting by the pirates caused TSLA to descend from the heights and eventually go red. TSLA spent much of the day with a thinner loss than the usual 2.1X multiplier x Nasdaq's loss, and showed relative strength in the final two hours of market trading by trading level when QQQ continued down. Nonetheless, TSLA closed down 2.23% compared to the Nasdaq's dip of 1.04%. That's a 2.14X multiplier, which is very close to Tesla's traditional 2.1X multiplier. In a nutshell, TSLA ran higher on momentum but ended the day trading with the macros.

Or at least that's what it looks like to the untrained eye. I would like to point out that in the chart immediately below, 62% of TSLA selling on Tuesday was tagged to shorts, suggesting LOTS of manipulations. In other words, the market makers had to do strategic shorting to convince the market that TSLA was just trading with the macros on Tuesday.

Wednesday morning before market open is CPI numbers reveal, and Thursday morning before market open we will see the PPI numbers. The numbers, whether cool or warm, will likely be the determining event that sends TSLA higher or lower this week from its current price.

News:
* This Tweet says that China has given approval for the Highland Model 3 to be sold within the country

Percent of TSLA selling tagged to short sellers rose all the way to 62% on Tuesday, suggesting lots of manipulations

Yields on 10 yr. treasury bonds closed at 4.28% on Tuesday

Max pain during this triple-witching week was 245 Tuesday morning. Looking at the open interest chart above, it's hard to see why the max pain was that low, since 255 was the lowest strike price where calls dominated. You can see that 265 would be an obvious pushdown target for the market makers since it is a relatively-tall call wall without any substantial puts.

Tuesday's options volumes

On Tuesday the negative Nasdaq led TSLA lower and the close put TSLA about $7 below the upper bollinger band. TSLA could easily regain that $7 if CPI numbers come in cool Wednesday morning.

Conditions:
* Down 18 (0.06%)
* NASDAQ down 144 (1.04%)
* SPY down 2 (0.55%)
* TSLA 267.48, down 6.10 (2.23%)
* TSLA volume 135.5M shares
* Oil 88.79
* IV 47.9, 22%
* Max Pain 245
* Percent of TSLA selling tagged to shorts: 62%
* Volume at 4pm closing cross: 2.9M shares

 

[Artful Dodger]

View attachment 973469
TSLA chart above (note: a glitch in the after-hours Nasdaq-produced chart required that I use this Yahoo chart of market hours instead)

Here's the NASDAQ chart for TSLA from 04:00 to 16:00 ET on Tue, Sep 12, 2023:

Cheers!

 

[Papafox]

TSLA chart above

QQQ chart above

The day began in earnest at 8:30am when the CPI numbers came out a bit warmer than expected. Here's CNBC's take. QQQ dipped a couple dollars into the red before recovering while TSLA took a very quick dip then resumed flirting with 270. After market open TSLA momentarily exceed 274 then fell with a macro dip at 10:14am before resuming its exploration above 270. For the day, TSLA closed up 1.43% to the Nasdaq's 0.29%. TSLA's resilience after Monday's climb shows that Adam Jonas's positive TSLA long-term views are lingering for more than a day with investors.

TSLA's and the market's strength after a CPI "miss" could be described as the market believing the feds will hold interest rates steady at their September meeting and the CPI numbers weren't bad enough to change that expectation.

TSLA might have been helped by this Ron Barron appearance on CNBC. At 7:15 in this Brighter with Herbert video podcast (with Brian White), Barron compares Tesla right now with the company he bought into in 2014-15. He says Tesla is going to grow from 1.8M vehicles to 20M vehicles and that Model 2 (Gen 3) will be as profound an event for Tesla as when Model S was introduced. He then speaks highly of Dojo and the implications there (and builds upon Adam Jonas's points). So, TSLA is worth a bundle if you look a few years down the road, rather than just concentrating on the next few quarters. As long as the market's focus can be steered further forward, there will be buyers willing to pay more for TSLA.

Fingers crossed that PPI behaves itself on Thursday.

Regarding the trajectory of inflation, consider the following two charts from truflation.com .

While the CPI now shows CPI at 3.7%, Truflation shows it at 2.62%. Notice how inflation bottomed in August but then climbed noticeably at the end of that month.

To understand the rise in inflation that happened this summer, it's best to zoom in on the truflation.com chart. You can see the peak of the inflation rebound took place around Aug. 27, according to this chart. That full rise would have been reflected in the CPI numbers for August. The good news is that truflation.com shows decreasing inflation since Aug 27, suggesting that the September CPI numbers could be better than the August numbers. Question marks include the timing of how truflation and CPI measure inflation and also the effect that the recent spike in oil prices will have on inflation. Although the core inflation is what matters most to the Fed (excludes oil and food), higher oil prices manage to raise virtually all prices at some point since most products need to be transported to market, etc.

Meanwhile, option sellers are shorting the sugar out of TSLA, trying to break the stock's rise this week. Percent of selling tagged to TSLA shorts climbed further on Wednesday to a very high 64%

The knee-jerk reaction to slightly above estimate CPI numbers was for 10 yr. treasury bond yields to climb above 4.3%. The market rethought that thesis and we saw a nice decline of yields in the afternoon.

Max pain Wednesday morning was 245. Again, looking at the open interest chart above, I can't see why it's not 250. There continues to be a big call wall at 280 and so the option sellers will be working to keep TSLA below 280 this week.

Wednesday's options volumes

Volume subsided a bit on Wednesday, which isn't so terrific but TSLA continues to outperform NASDAQ.

Conditions:
* Dow down 70 (0.20%)
* NASDAQ up 40 (0.29%)
* SPY up 1 (0.12%)
* TSLA 271.30, up 3.82 (1.43%)
* TSLA volume 110.4M shares
* Oil 88.82
* IV 47.7, 21%
* Max Pain 245
* Percent of TSLA selling tagged to shorts: 64%
* Volume at 4pm closing cross: 2.8M shares

 

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TSLA chart above

QQQ chart above

TSLA and QQQ took a momentary dip around 8:30am when the PPI headline number came in hotter than expected. Alas, the core PPI number was a mere 0.2% for August, and the market realized that Darth Powell likely has no reason to raise interest rates this month and so the pre-market trading headed higher. Here's CNBC's take on the PPI.

Come market open, TSLA was hit with an immediate Mandatory Morning Dip that looks like it had nothing to do with macros nor news. It turns out that TSLA percent of selling tagged to shorts was a robust 63%, and I suggest that some of that shorting was used to generate the MMD. It didn't work. By 11am TSLA was flirting with 275.

Why so much strength? Tesla has seen just way more good news than normal this week. It started with the Morgan-Stanley upgrade, which was backed up by Ron Barron telling CNBC what a powerful and profitable beast Tesla is going to become in a few years. Then we heard that the UAW is set to strike the U.S. big auto makers (which will increase Tesla's advantage over them) See this Gene Munster post. On Thursday, Reuters published this article with the positive headline Tesla reinvents carmaking with quiet breakthrough. The article explains that with help from SpaceX metal experts, Tesla should now be able to cast the underbody of a vehicle in a single casting. The implications of course are that Tesla is innovating so fast they are becoming untouchable in the automotive space.

These positive pieces of news have allowed investors to look a few years down the road to FSD and Gen 3 release instead of worrying what the next couple quarters will bring. Thus, the current emphasis is causing buyers to push TSLA price higher.

Normally, I would expect the market makers to be successful in defending their Friday line in the sand (280-strike call wall), but this has been an extraordinary week for news and TSLA rose in after-hours trading. They've also been mostly unsuccessful with significant shorting the past few trading days. I'd be delighted to see 280 breached and even happier to see the close exceed 280.

News:
* Rob Maurer interviewed Walter Isaacson on Thursday. The interview is very much worth your time because Rob is one of us and asks the type of questions that a retail investor would ask.

Percent of TSLA selling tagged to shorts came in at 63% on Thursday, suggesting significant manipulations

Yields on 10 yr. treasury bonds rose to 4.31% for Thursday's close

Max pain Thursday morning was 247.50. Meanwhile the 280 strike call wall is over 40K high and will be defended by the market makers on Friday

Thursday's options volumes

Check out the nice setup on the tech chart for TSLA. The upper bollinger band is heading higher at a substantial angle and is at nearly 282 at Thursday's close. TSLA has been in an overall uptrend this week.

Conditions:
* Dow up 332 (0.96%)
* NASDAQ up 112 (0.81%)
* SPY up 4 (0.86%)
* TSLA 276.04, up 14.74 (1.75%)
* TSLA volume 107.2M shares
* Oil 90.35
* IV 46.5, 17%
* Max Pain 247.50
* Percent of TSLA selling tagged to shorts: 63%
* Volume at 4pm closing cross: 3.5M shares

 

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TSLA chart above

QQQ chart above

Friday was the culmination of a strong week for TSLA. While Nasdaq lost about 0.4% for the week, TSLA gained about 10.4%. Friday's TSLA dip of 0.6% was the apparent result of significant efforts by the market makers to improve their profitability for the week. As the max pain chart showed Friday morning, All strikes below 275 were put dominated and 275 and above were call dominated. For this reason, a close just 61 cents below 275 looks like a desired consequence of market maker manipulations.

Consider that a hefty 65% of selling on FINRA exchanges was tagged to shorts on Friday. The massive closing cross volume of 20.9 million shares Friday afternoon certainly would have given the day-shorters an opportunity to cover. Perhaps the max pain on Friday was 250 because of differences in prices paid for calls vs. puts, instead of the apparent 275 dividing line between call and put domination.

In terms of looking at the daily chart, you can see signs pointing to manipulations (never mind that MMs had LOTS of incentive to push TSLA lower on the Friday closing of a triple-witching options week). First, notice that TSLA was solidly green going into market open, suggesting positive sentiment regarding Tesla. Notice the strong pushdown and recovery cycles throughout the morning. Notice the almost linear dip of TSLA from its early afternoon flirt with the green until it bottomed out a bit before 3pm (looks like someone had turned on the auto-sledgeomatic). Notice buyers rejecting the mid-afternoon pushdown and began bidding TSLA higher into the close. I personally did a buy for short-to-mid term purposes not long after the recovery was well underway. Buying Friday's low and selling Monday's high is a pastime of some traders, provided the next week's outlook is decent. Overall, the week was a series of pushes higher because of good Tesla news and apparent manipulative pushdown efforts later in the week that mostly failed. I consider failed manipulations as a bullish sign that more upside is possible.

The Fed speaks about their September meeting on Wednesday, Sep 20. Nearly all Fed watchers are convinced there will be no interest rate hike at this meeting. Although oil has climbed above $90/barrel, energy watchers expect a gasoline price reversal after the busy travel season has subsided and refineries switch over to the less-expensive winter blend. As for Truflation's take on inflation, the rising numbers of late August have been replaced with falling numbers in September. Let's hope the official inflation numbers reflect this dip.

News:
* According to this Whole Mars Catalog Tweet, Tesla just produced their 5 millionth vehicle and the 4 millionth vehicle was produced March 1, 2023. Not bad!

Percent of selling tagged to TSLA shorts rose all the way to 65% on Friday, suggesting serious manipulations underway

Yields on 10 year treasury bonds closed at 4.34% on Friday, representing the highest rate seen since 2007

The inevitable finally happened and max pain Friday morning was 250. Strike 275 was the lowest price at which calls exceeded puts, and TSLA closed 61 cents below that strike. Coincidence? You already know the answer.

Friday's options volumes

For the past four weeks, we've seen substantial price increase on the first trading day of the week. Even so, the big option sellers were able to walk the stock price down by Friday so that it was reasonably close to max pain. This past week was the first week when the market makers failed to bring the two reasonably close together on Friday's close. Chart courtesy of @JimS

For next Friday, Sep22, max pain is 260. I would wait to see what kind of a bump up we get Monday to gauge where the stock price will end up by week's end.

That's a nice tech chart with the week's trading showing a nice upward movement and the upper bollinger band moving higher at an even steeper angle.

For the week, TSLA closed at 274.39, up 25.89 (10.4%) from the previous Friday's 248.50. Hoping you are taking time this weekend to enjoy those people who most matter to you.

Conditions:
* Dow down 289 (0.83%)
* NASDAQ down 218 (1.56%)
* SPY down 5 (1.20%)
* TSLA 274.39, down 1.65 (0.60%)
* TSLA volume 133.3M shares
* Oil 90.77
* IV46.9 , 18%
* Max Pain 250 for Sep15, 260 for Sep22
* Percent of TSLA selling tagged to shorts: 65%
* Volume at 4pm closing cross: 20.9M shares

 

[Papafox]

TSLA chart above

QQQ chart above

In my mind, Monday was a pretty obvious bear raid. We saw percent of selling tagged to shorts sky high at 65% and plenty (3.3M) of shares trading in the 4pm closing cross to enable covering of day-shorting activity. No negative TSLA news of significance came forward and the macros were slightly positive. OTOH, you can see the very determined mandatory morning dip that was energized right after market open. Generally speaking, big investment firms do not sell like crazy at market open when they wish to reduce their holdings in a company. They usually spread the selling out over days to minimize the penalty in lower price that comes with selling too quickly. Unless there's news or macro weakness, a big MMD typically is a manipulative tool for lowering the stock price.

Overall, Monday was actually a news positive day for TSLA for those of us who look closely. This Tweet speaks of the new, higher number of chips that Tesla has ordered from TSMC for Dojo that will make the computer the most powerful on earth.

I'm time-limited with this report but hope to have more time for analysis tomorrow.

News:
* Clean Technica says that by 2030 two-thirds of vehicles sales will be EVs, which would potentially cut demand for oil by half

Percent of TSLA selling tagged to shorts was 65% on Monday. If you look at the chart above, you can see that often these 60+% selling by shorts streaks slightly precede local highs. In other words, the high shorting is often used to facilitate a downturn in the stock price.

Yields on 10 yr. treasury bonds dipped to 3.03% on Monday

Max pain Monday morning was 260. Looking at the open interest chart above for Friday expiration, Strike 255 is solidly put-dominated, 275 is solidly call-dominated, and strike prices in between are somewhat mixed. The market makers will likely want a close on Friday somewhere between 255 and 275. Unfortunately for us longs, MMs tend not to work very hard supporting a price on Friday but they're not shy about a pushdown. I think part of the reason for this bias is that TSLA over time rises and more calls are sold than puts. A dip in the TSLA price helps the MMs more in the long run than protecting a price point by propping up the share price as Friday approaches.

Monday's options volumes

Conditions:
* Dow up 6 (0.02%)
* NASDAQ up 2 (0.01%)
* SPY up 0 (0.06%)
* TSLA 265.28, down 9.11 (3.32%)
* TSLA volume 100.3M shares
* Oil 92.24
* IV 48.1, 23%
* Max Pain 260
* Percent of TSLA selling tagged to shorts: 65%
* Volume at 4pm closing cross: 3.3M shares

 

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TSLA chart above

QQQ chart above

Mercy, looking at the morning's TSLA chart reminds me of a nasty sky in tornado alley. Right after open TSLA shot up to nearly 268, then half an hour later down below 262, then right back up again to gyrate many times and close in the green. Folks, sentiment regarding TSLA just doesn't change this quickly. The pirates busied themselves with turning an exuberant opening into a dip to the max pain depths, but Mr. Market was getting wise to the manipulations and started buying.

Percent of selling tagged to shorts remained quite high, at 58%, and 4pm closing cross volume of 4.5M shares provided plenty of opportunity for the day-shorts to cover. What's positive is that the market called the pirate's bluff and TSLA went up on a down macro day.

Wednesday is FOMC meeting day. Expect no raise but then the inevitable Darth Powell "inflation is still too high, there's more work ahead, etc.", and he'll push the market a bit lower after the prepared meeting summary is released.

Overall, we're at a crossroads. On the one hand, various improvements to Tesla's production facilities and improvements to Model 3 are slowing down production at the moment and will have an effect upon Q3. On the other hand, we have the following positive developments:
* Model 3 highland is being produced quickly from Shanghai now and will give M3 the margin boost and sales interest it has needed
* This video by Cleanerwatt says that Kato Road's 4680 production may be closed for 3 months as Tesla upgrades the facility to produce the 10% more powerful 4680 2 cells with the same updated machinery recently installed at GigaTexas. Short term worriers will see reduced production while those with longer time horizons will see a strong indication that 4680 production has matured sufficiently for Tesla to export to Kato Rd. now. Significant improvement in 4680 production has been perhaps the biggest issue facing Tesla this year.
* This past week's news about a substantial size increase of Dojo sends the message that Tesla has increased confidence in the abilities to scale Dojo and the value of this soon to become the world's most powerful computer. With the combination of Dojo, and end-to-end neural-network learning through exposure to Tesla's enormous video stream of driving, Tesla should be on its way to making massive FSD improvements in the next year or two. Of course the short-term thinkers will be concentrating on the added spending needed to build Dojo. Tie breaker? Tesla has 22 billion dollars sitting around.

Thinking of 3rd generation vehicles coming, significant improvements in FSD coming, Model 3 highland selling well, optimus under development, and cybertruck about to be released makes me glad to own this stock.

Percent of selling tagged to shorts remained high on Tuesday at 58%, suggesting continued manipulation pressure

Yields on 10 year treasury bonds ascended to 4.36$ on Tuesday

Max pain Tuesday morning was 262.50. Strikes 260 and 265 are effectively neutral in puts vs. calls and the day's max pain number resides right in the middle. One of the great tug-of-wars with TSLA is when the stock price gets too far above its max pain number, such as what we saw last week. Option sellers such as market makers and hedge funds will actively work to pull the price more in line with max pain, or at least the strike price that is within reach and improve their profits. Once price and max pain are in synch again, the pressure lessens until the next run higher.

Tuesday's options volumes

TSLA has so far managed to hold onto much of the gains from its Sep11 zoom, despite the pressure from option sellers

Conditions:
* Dow down 107 (0.31%)
* NASDAQ down 32 (0.23%)
* SPY down 1 (0.21%)
* TSLA 266.50, up 1.22 (0.46%)
* TSLA volume 103.5M shares
* Oil 91.56
* IV 48.2, 23%
* Max Pain 262.50
* Percent of TSLA selling tagged to shorts: 58%
* Volume at 4pm closing cross: 4.5M shares

 

[Papafox]

TSLA chart above

QQQ chart above

Wednesday was an overall strange trading day for TSLA. For much of late afternoon TSLA soared while QQQ dipped into the red. The prevailing rumor is that Tesla information at a Morgan-Stanley presentation caused the surge. TMC's @larmor said he knows what was included in the presentation and listed the items in this post. Meanwhile, Larry Ellison was giving a presentation about a new Oracle police car that will be a modified Tesla Cybertruck. Here's the Twitter link to the clip provided by Whole Mars Catalog. Among Ellison's statements was one saying that FSD would be realized within 12 months.

As expected, The Fed decided against raising rates at the September meeting and also as expected Darth Powell went to work sinking the market because that's what Darth Powell does to expedite the inflation dip. Here's CNBC's take. I listened to a reporter ask whether high rates are keeping rents high since there's less building and supply is being affected. Powell completely dodged the question by doing a dog and pony show about how people holding their current properties and not selling has no bearing upon rents. Sigh, it's simple demand and supply, Darth.

When the Nasdaq began falling from word that rates might be kept high for longer than previously expected, TSLA fell at an accelerated rate and lost about $10 from the day's high. I strongly suggest that some shorting was used to expedite the TSLA descent in order to get TSLA to max pain or below. Percent of selling tagged to shorts was a moderate 47%, but we saw elevated trading in the 4pm closing cross minute (3.5M shares). I think it was an easy manipulation to juice the macro dip and so it didn't require much resources.

Yields on 10 yr. treasury bonds shot above 4.4% when Darth Powell delivered his inflationary doom and gloom on Wednesday

Max pain Wednesday morning increased to 265. The day's close below that level would suggest that the market makers have no incentive to keep pushing TSLA lower this week. Unfortunately, there's often another band of pirates with ample motivation to try.

Wednesday's options volumes

Conditions:
* Dow down 77 (0.22%)
* NASDAQ down 209 (1.53%)
* SPY down 4 (0.92%)
* TSLA 262.59, down 3.91 (1.47%)
* TSLA volume 121.7M shares
* Oil 90.28
* IV 50.5, 28%
* Max Pain 265
* Percent of TSLA selling tagged to shorts: 47%
* Volume at 4pm closing cross: 3.5M shares

 

[Papafox]

TSLA chart above

QQQ chart above

Thursday was day two of the markets' meltdown because of Darth Powell's "higher for longer" speech. NASDAQ lost 1.82% for the day while TSLA was down 2.62%, bad but not nearly as bad as a theoretical 2.1X multiplier's 3.8% dip. Percent of selling by shorts was a rather normal 45% on Thursday, thus, most of what we were seeing with TSLA's dip was likely fear of the macros falling. We also saw yields on 10 yr. treasury bonds exceed 4.5%, which gives bondholders an attractive return and siphons some funds from stocks.

To understand the forces acting on TSLA at the moment consider:
* The upward pushing "brilliant future" effect of Morgan-Stanley's recent view of TSLA that pushed it above 270. A Ron Baron interview on CNBC and a second helping of Morgan-Stanley optimism have given upward push as recently as Wednesday. Recent Dojo increases in planned chip count and positive statements about FSD by the likes of Larry Ellison add to the "brilliant future" narrative
* The downward force of worry regarding Q3 perhaps delivering fewer vehicles than in Q2. Observers such as Ron Baron dismiss the quarter as being affected by factory upgrades. Such worries are short-term thinking.
* The downward force of high interest rates and fear of inflation or recession. The markets have recently caught this fear and Powell is eager to stoke it.
* The market makers will do day-shorting to coax TSLA closer to max pain. At times this week TSLA was nearly $10 above max pain but at close on Thursday it was some $7 below max pain.

And so we've seen TSLA at times bucking the broader markets and climbing on "brilliant future" mode at times when the rest of the market was retreating. This week we saw a big spike in shorting that coincided with TSLA reaching a local high and then falling. That shorting should be on hold Friday morning, As a general statement, when the market is retreating, investors tend to take shorter-term views and the shorter-term issues with TSLA prevail. When the market is climbing we have recently seen investors bidding TSLA up because of various "brilliant future" catalysts. It's really a dynamically unstable situation which leads to big climbs and big dips.

News:
* According to this Wuwa Tweet, Tesla is in negotiations to build a battery factory in India

Percent of selling tagged to shorts fell to 45%, suggesting a lack of manipulations. Notice the daily progression of the shorting zooming up to above 60% and within days resulting in a decline of TSLA's price. I suggest cause/effect because the shorting came slightly before the trajectory change in TSLA's movements, and once the downward movement was established, shorting backed way off and the market was left to sort things out.

Meanwhile, yields on 10 year treasury bonds exceeded 4.5% on Thursday. Mr. Market is very unhappy about Powell's "higher for longer" speech and is assuming that inflation will be a bigger issue for longer.

Max pain Thursday morning was 262.50, a decline of 2.50 from Wednesday. Strike 255 is solidly put-dominated and so the MMs have zero incentive to push downward. Unfortunately, they tend to not push upward in situations such as this, either.

Thursday's options volumes

TSLA closed near the intersection of the mid-bollinger band and the 50 day moving average. A couple weeks ago, the 50 DMA worked as a cap when TSLA was trying to move up. Let's see if the 50 DMA can act as support this time around.

Conditions:
* Dow down 370 (1.08%)
* NASDAQ down 245 (1.82%)
* SPY down 7 (1.65%)
* TSLA 255.70, down 6.89 (2.62%)
* TSLA volume 118.4M shares
* Oil 90.35
* IV 53.1, 33%
* Max Pain 262.50
* Percent of TSLA selling tagged to shorts: 45%
* Volume at 4pm closing cross: 4.5M shares