Papafox's Daily TSLA Trading Charts

[Papafox]

TSLA chart above

QQQ chart above

Friday was the culmination of a wicked and wild week for TSLA. On Monday TSLA lost 3.3% on an up market when it fell prey to a bear attack with 65% of TSLA selling tagged to shorts, a clear sign of manipulations. On Wednesday afternoon Darth Powell pulled the rug from under the market's feet with his "higher for longer" rant. He doesn't yet know what the data will show for inflation in the months ahead and whether such a policy will actually be implemented, but every bit of pain the market feels right now helps him achieve his precious 2%, and so he goes negative. Thursday was the market's full playing out of the Powell poisoning. I rather expected TSLA to bounce back on Friday. Unfortunately, some big dog traders jumped in with shorting (58% of TSLA selling tagged to shorts) and despite NASDAQ closing about neutral for the day, TSLA was partially down 4.23% on a Barclay's note predicting a bigger than expected Q3 miss, and when mixed with the shorting the big dip resulted. With a robust 4 million shares trading hands in the 4pm closing cross there was plenty of opportunity for the day-shorters to cover.

In Thursday's post I mentioned various forces propelling TSLA either up or down. I'd like to add another, which was inspired by Friday's trading. You have some really huge hedge funds that can indeed influence TSLA's trading on a day to day basis, and some engage in swing trading (taking advantage of short-term price swings and willing to shift between shorting and holding long). Many chartists will draw both downtrend and uptrend lines (see this TMC post by @Chenkers). When the rising price approaches the downtrend line (such as 280 recently) you can sometimes see that shorting spikes high and the stock is artificially kept from penetrating the trend line. The stock starts heading down and miraculously bounces off the uptrend line so that it runs steadily shorter distances between the two trend lines until it is finally forced to depart to the upside or downside. The market gets caught up as a catch-up participant chasing these runs higher and lower but it's really the hedge funds that benefit most. Of course there are surprises sometimes that cannot be manipulated away.

The big news this weekend was a video of Optimus performing sorting duties and yoga poses. We also learned that Optimus is trained on tasks with end to end neural nets: feed in the video and Optimus learns how to perform the job. Here's a Solving the Money Problem video podcast that highlights the video provided by a Tesla engineer. For those of us in the Teslasphere, this is huge news because nobody is going to be able to match the speed at which an Optimus can be trained, the manual dexterity of the Optimus hands looks quite impressive, and balance issues appeared to be well under control as Optimus does the yoga moves. Humanoid robots should be a much bigger market than the auto market, and Musk has predicted back in 2022 that Optimus may be released in 3-5 years. Of course Wall Street is yawning in disbelief because of Elon's missed timetables for FSD. What Wall Street hasn't yet figured out is that optimus is way easier to safely release than FSD and it can be built in huge numbers for the available space. Here's a Teslarati article talking about recruiting right now for Optimus engineers and other essential development employees at the Austin Gigafactory. What's eye opening is how little coverage mainstream media is giving to this development. Sheesh! The good news is that the Adam Jonas catalyst not long ago was focused on Dojo and FSD, and this Optimus news raises the "brilliant future" bar just that much higher.

News:
* Joe Tegtmeyer Tweeted on Friday that vehicle production was still shut down on Friday but more employee cars were in the parking lot and there's rumors of production resuming next week

Percent of selling tagged to shorts rose on Friday to 53%, a likely result of a hedge fund or two getting frisky in a pushdown effort

Yields on 10 yr. treasury bonds cooled a little on Friday to 4.44%

Truflation shows that inflation has behaved itself since the August rise, which bodes will for the CPI, PPI, and PCE reports that will be released in October

Max pain Friday morning was 260. Friday's significant dip allowed those significant number of 250 puts to come into the money.

Friday's options volumes

Tesla fell hard this past week as the Powell rant and a Barclays note put the blinders on the "brilliant future" focus of TSLA and shifted it to the short-term Q3 results again. Chart by @JimS

For this coming Friday, max pain is 265, which is some $20 higher than Friday's closing price.

TSLA had been trading above the mid-bollinger band since late August, but this week's big dip placed it well below the mid-bb. Fortunately, the lower bollinger band is rising quickly to provide support, if necessary.

For the week, TSLA closed at 244.88, down 29.51 or 10.8% from the previous Friday's 274.39. It's been a rough and tumble week when good long-term Tesla news dominated. Such is life as a TSLA investor. Hoping you enjoyed this weekend with those who matter to you.

Conditions:
* Dow down 107 (0.31%)
* NASDAQ down 12 (0.09%)
* SPY down 1 (0.22%)
* TSLA 244.88, down 10.82 (4.23%)
* TSLA volume 126.3M shares
* Oil 90.03
* IV 55.6, 37%
* Max Pain 260 for Sep22, 265 for Sep29
* Percent of TSLA selling tagged to shorts: 53%
* Volume at 4pm closing cross: 4.0M shares

 

[Papafox]

TSLA chart above

QQQ chart above

Monday was pretty much a follow the macros day for TSLA. Nasdaq closed up 0.45%, and TSLA was up 0.86% for a 1.9X multiplier, pretty close to TSLA's usual 2.1X. Percent of TSLA selling tagged to shorts was a pretty normal 46%.

Eyes are looking toward a week from Monday when the Q3 Production and Delivery report should come out. Elon already gave the heads up that production in Q3 should be below Q2 because of the factory closures for line upgrades. TSLA took a hit when that news came out nearly a quarter ago, the stock recovered and has tested 280 as various positive news events for Tesla made it clear that the future looks bright for this company, and then last week TSLA lost more than 10% on a combination of bear raids and macro weakness. This coming trading week is a big unknown on what the stock will do but I like the after-hours strength of TSLA on Monday.

As for the P&D Report itself, we're seeing Troy's estimates way below Wall Street estimates and Wall Street not doing much to revise as the various factory closures happened. It's a setup for a sale the news dip if deliveries are indeed closer to Troy's numbers. I just look at this Q3 as one of those quarters you just have to get out of the way so that we can move on to bigger and better things. Cybertruck reveal, cranking up M3 Highland at Fremont (and being deluged with orders), spinning up 4680 production and learning of FSD and Optimus advances will in time pull us higher in good time. Wall Street would like nothing more than to scare some retail TSLA investors after the P&D report, grab their shares, and then ride the stock up on the positive events coming our way. I don't plan to share my holdings with the pirates, thank you.

News
* Joe Tegtmeyer Tweeted that GigaTexas employees are back at work as the factory prepares to recommence building vehicles. Two "Master Candidate" Cybertrucks were spotted.

Yields on 10 yr. treasury bonds jumped above 4.5% on Monday

Max pain on Monday dipped to 255. The dividing line between put domination and call domination is about 252.50 right now. The put to call ratio is a fairly typical 0.76 right now. Last week a similar number rose to .85 as the stock sank and put buying picked up noticeably.

Monday's options volumes

During this morning's Mandatory Morning Dip, TSLA bounced off the lower bollinger band and then staged a nice recovery at trading's end.

Conditions:
* Dow up 43 (0.13%)
* NASDAQ up 60 (0.45%)
* SPY up 2 (0.42%)
* TSLA 246.99, up 2.11 (0.86%)
* TSLA volume 103.4M shares
* Oil 89.35
* IV 55.3, 33%
* Max Pain 255
* Percent of TSLA selling tagged to shorts: 46%
* Volume at 4pm closing cross: 2.2M shares

 

[Papafox]

TSLA chart above

QQQ chart above

Tuesday was day 2 of TSLA somewhat outperforming the Nasdaq. Nasdaq closed down 1.57% but TSLA closed down only 1.16%. Moreover, the dip for TSLA was backloaded to the afternoon. While QQQ was down throughout the day, TSLA was up in the morning. I think the reason TSLA typically performs worse in the afternoon than mornings is that lower afternoon volumes make it more vulnerable to manipulative pushdowns. Percent of TSLA selling tagged to shorts rose to 49% and we saw a hefty 2.9M shares trade hands during the 4pm minute.

So, the end of quarter plot thickens. Wall Street has been sticking with deliveries in the 460Ks, even though recent factory closures suggest lower. In this Tweet by Gary Black, analyst Pierre Ferragu is quoted as saying that deliveries will be closer to 438K in Q3 but that Wall Street understands the reason. "We believe this miss is well-anticipated by the buy side and retail influencers," said Ferragu. Personally, unless the numbers are unexpectedly low, I suggest there are plenty of investors waiting to buy the dip if it happens.

Yields on 10 yr. treasury bonds closed at 4.52% on Tuesday

Max pain dipped further to 252.50 on Tuesday. Calls now outnumber puts at 250, and so a dip to 250 is likely this week

Tuesday's options volumes

Notice the lowish volumes, just above 100M, again

Conditions:
* Dow down 388 (1.14%)
* NASDAQ down 208 (1.57%)
* SPY down 6 (1.47%)
* TSLA 244.12, down 2.87 (1.16%)
* TSLA volume 101M shares
* Oil 90.67
* IV 54.7, 35%
* Max Pain 252.50
* Percent of TSLA selling tagged to shorts: 49%
* Volume at 4pm closing cross: 2.9M shares

 

[Papafox]

TSLA chart above

QQQ chart above

On Wednesday we saw higher volume with TSLA but weakness compared to the NASDAQ. TSLA closed down 1.48%, compared to the NASDAQ's 0.22% dip. Some of the TSLA weakness could be related to a Deutsche Bank downgrade of TSLA from 300 to 285, reported here by Teslarati, due to lower deliveries in the forecast. Deutsche Bank dropped their TSLA estimate for Q3 to 440K units, vs. the Factset numbers of 462K units. It's odd that the analysts are not adjusting for recent production halts (for Tesla to upgrade the lines). It's for quarters such as this that Tesla has been querying analysts prior to quarter's end to develop their own, more accountable list. Looking forward to seeing those numbers.

West Texas oil exceeded $94 on Wednesday. If the price holds, gasoline prices will climb significantly. Bad news is fuel price effect upon inflation. Good news is that consumers will feel the pain at the pump and more seriously consider the move to an EV.

Finally, I'm reproducing a graph below that @Cobbler posted in the main investors' forum. Let that sink in...

Yields on 10 yr. treasury bonds closed at 4.55% on Wednesday

Max pain Wednesday morning was 250.

Wednesday's TSLA options volumes

On Wednesday TSLA bounced in the vicinity of the lower bollinger band

Conditions:
* Dow down 69 (0.20%)
* NASDAQ up 29 (0.22%)
* SPY up 0 (0.04%)
* TSLA 240.50, down 3.62 (1.48%)
* TSLA volume 136.2M shares
* Oil 94.54
* IV 55.7, 38%
* Max Pain 250
* Percent of TSLA selling tagged to shorts: 46%
* Volume at 4pm closing cross: 3.4M shares

 

[Papafox]

TSLA chart above

QQQ chart above

TSLA got off to a good start on Thursday as Adam Jonas reiterated his $400 price target for TSLA. With this catalyst, TSLA closed up 2.44% compared to Nasdaq's 0.83% gain, a nearly 3X multiplier. With the stock remaining a safe distance below the $250 call wall, market makers apparently behaved themselves and percent of selling tagged to shorts was a low 46%.

Friday will be the last trading day before the likely release of Tesla's Q3 Production and Deliveries report around 8:30am on Monday. Don't be surprised by volatility.

Meanwhile, in the main investors' forum, @Chunky Jr. brought our attention to this Troy Tweet, which shows U.S. inventory of Y and 3 declining to minimal levels as Q2 approaches its end.

Yields on 10 yr. treasury bonds closed up at 4.6% on Thursday

Max pain was 245 Thursday morning. Check out that big call wall at 250. The market makers definitely want to keep TSLA below 250 on Friday.

Thursday's TSLA options volumes

The week's trading has been rather benign, with the lower bollinger band yielding bounces.

Conditions:
* Dow up 116 (0.35%)
* NASDAQ up 108 (0.83%)
* SPY up 2 (0.58%)
* TSLA 246.38 up 5.88 (2.44%)
* TSLA volume 115.9M shares
* Oil 92.11
* IV 53.0, 32%
* Max Pain 245
* Percent of TSLA selling tagged to shorts: 46%
* Volume at 4pm closing cross: 2.7M shares

 

[Papafox]

TSLA chart above

QQQ chart above

So, the plot thickened when Tesla on Friday released Production and Delivery numbers solicited from individual, respectable analysts. Instead of the 461K deliveries that FactSet has been transmitting, analysts polled by Tesla expected 455K deliveries when Tesla releases its P&D report on Monday morning. Gary Black figures that if a reasonable miss in the vicinity of 445K to 455K takes place, Wall Street will already have anticipated the lower number. A few important analysts made major downward revisions to their expected delivery numbers. The big change from FactSet numbers shows thje advantage of having an involved Tesla Investor Relations team working to minimize game playing as important reports beckon. We know that some Tesla antagonists were upset with this fairness process because Gordon Johnson got his knickers in a knot and suggested the SEC look into the matter. Sigh!

Looking at the daily TSLA chart, and knowing that the market makers wanted Tesla to close at least a penny below 250 on Friday, you can see that TSLA took an unusually big dip between about 12:30pm and 2pm, when compared to QQQ. I suggest that the MMs were accelerating TSLA's dip. Alas, once QQQ leveled out around 2pm, TSLA started climbing while QQQ danced around in the red zone for a while. Buyers were clearly giving the stock upward pressure. Once TSLA reached 250, the capping began with the Wack-a-mole machine turned to max resistance mode any time cute little TSLA stuck its head above 250. Some recovery of QQQ (and Nasdaq) led to buyers overpowering the market makers and driving TSLA 22 cents above 250 for the close.

Expectations are that the Production and Deliveries report gets released at 8:30am Monday morning. Anything is possible with the reaction, but I agree with Gary Black that many investors are prepared for a deliveries number between 445K and 455K. Troy's final estimate is for 441K deliveries. The big question mark is how much the significant drawdown in U.S. inventory during Q3 will affect the results.

News:
* Reuters reports that Tesla has released an updated Model Y in China at the same price as before.

Except for the big jump in late August, inflation has been tame in September, according to Truflation.com

Percent of TSLA selling tagged to shorts on Friday was a benign 46%, which does not line up well with the very apparent afternoon capping at 250. Most likely, shorted shares were borrowed from non-FINRA exchanges or naked shorting was imposed to control TSLA's price into the close.

Yields on 10 yr. treasury bonds closed at 4.57% on Friday

Max pain Friday morning was 245, but the big call wall was at 250, which is where the market makers drew the line and entered battle.

Friday's options volumes

After the previous weeks big dip, this past week's small climb was a welcome change. Movement in the coming week will be dependent upon results of Monday's Production and Deliveries numbers

Max pain this coming Friday is 250

Trading on Friday began and ended near the 50 day moving average, once again reinforcing this value as being significant. Also, we saw two bounces in the vicinity of the lower bollinger band, reinforcing that value's support status. All bets are off for Monday as P&D numbers could give strong up or down pressures on the stock.

For the week, TSLA closed at 250.22, up 5.34 from the previous Friday's 244.88. Hoping your weekend has been a good one!

Conditions:
* Dow down 159 (0.47%)
* NASDAQ up 18 (0.14%)
* SPY down 1 (0.24%)
* TSLA 250.22, up 3.84 (1.56%)
* TSLA volume 128.2M shares
* Oil 90.79
* IV 53.7, 34%
* Max Pain 245 for Sep29, 250 for Oct6
* Percent of TSLA selling tagged to shorts: 46%
* Volume at 4pm closing cross: 4.3M shares

 

[Papafox]

TSLA chart above

QQQ chart above

Tesla's 435K delivery numbers came in below most expectations, and of course we saw the knee-jerk dip in pre-market to below 240. I believe you had investors on the sidelines waiting for this dip, and once the buying began in earnest the deep dip disappeared. TSLA managed to gain 0.55% for the day, compared to the Nasdaq's gain of 0.67. Tesla reaffirming guidance of "about" 1.8 million for 2023 was a critical ingredient in TSLA's strength on Monday. Moreover, Tesla announced that the Model Y RWD would become available in the United States. This is a potent demand lever that Tesla was holding off using, and so the introduction of Model Y RWD bodes well for Q4 deliveries.

I added up Q1, Q2, and Q3 deliveries and got 1,324K so far. For TSLA to hit 1.8M deliveries in 2023, that works out to about 476K deliveries in Q4. Seems doable, especially with Model 3 Highland in Asia and Europe and a less expensive Model Y (RWD) coming to the U.S. in Q4.

Not everybody was happy with Tesla's surprising strength on Monday. We saw 61% of TSLA selling tagged to shorts, suggesting the big Wall Street dogs were at work trying to temper TSLA's rise. Trading during the 4pm minute was a robust 3.7M shares.

Kudos to James Stevenson for just about nailing the delivery numbers in Q3. Likewise, Pierre Ferragu came in just a few thousand high.

There's plenty of room for volatility this week.

Yields on 10 yr. treasury bonds climbed higher on Monday, to 4.68%

Percent of selling tagged to shorts was a surprisingly-high 61%. Looks like someone didn't like TSLA climbing above 250

Max pain Monday morning was 250. Strike 250 and 255 have nearly evenly-matched puts and calls, and so it makes sense for the MMs to want to keep TSLA from heading much higher. Strikes 260 and 265 and strong call walls.

Monday's options volumes

Once again, the blue 50 day moving average worked as a near top for the afternoon recovery of TSLA

Conditions:
* Dow down 74 (0.22%)
* NASDAQ up 88 (0.67%)
* SPY down 0 (0.04%)
* TSLA 251.60, up 1.38 (0.55%)
* TSLA volume 123.5M shares
* Oil 88.48
* IV 51.4, 30%
* Max Pain 250
* Percent of TSLA selling tagged to shorts: 61%
* Volume at 4pm closing cross: 3.7M shares

 

[Papafox]

TSLA chart above

QQQ chart above

Tuesday was the day to tesl how well TSLA would hold up after its Q3 P&D numbers were released when the macros were down. It turned out to be not so bad. Nasdaq was down 1.87% and TSLA was down "only" 2.02%. Remember that at a typical TSLA multiplier of 2.1X, TSLA would be down 3.93%. Looking at other high-flyer stocks, Amazon was down 3.66%, Nvidia down 2.82%, ARKK down 2.74%, and Microsoft down 2.61%. All in all, TSLA is behaving more strongly than typical.

The markets were down because bond yields were way up. The chart below shows 10 year treasury yields at 4.8%. As treasury yields rise, money flows from stocks to bonds because bonds are seen as a safe alternative to stocks, particularly when the yields are up. That outward flow of funds from stocks is a reason why stock prices fall when bond yields are reaching attractive rates.

As for TSLA, you have a situation in which investors have been willing to tiptoe back into the stock because they feel that Q3 was the bottom for TSLA and the stock will rise from here. OTOH, you've had some selling as a reaction to the lower-than-expected deliveries in Q3. Additionally, we normally see a put-to-call ratio of about 0.75 with TSLA, meaning there's only 75% as many puts expiring at week's end compared to calls. At the moment, the put-to-call ratio is about 1, reflecting a higher than normal ratio of puts to calls. That ratio is the result of many investors betting that TSLA would fall after the Q3 P&D report release. Some who bet on a fall of TSLA are not happy with the stock's strength, and so we saw percent of TSLA selling tagged to shorts rise to 66%. Keep in mind that 68% is about as high as we ever see for this measurement. Volume during the 4pm closing cross minute was a high 4.2 million shares, which gave lots of opportunity for day-shorters to cover.

A few words about Walter Issacson's biography of Elon Musk
I've finished reading (actually listening to) this biography and I have a few observations from an investor's standpoint. Compared to the Ashley Vance biography, this depiction really gets into the details and shows both how stressful working for Elon can be as well as how extraordinarily useful he can be when the company is in a crisis situation. I came away with a better understanding of why top employees such as Zach chose to leave, and I also came to understand how essential Elon was during manufacturing hell periods. Overall, I see how important Elon has been to the success of Tesla and why this company is running away with the lion's share of the EV market. Yes, there is indeed key man risk, but the good news is that he's working for us., not a competitor. I also saw with the decision to make Gen 2 both with and without steering wheels and other driving tools that if Elon does make what many of us would consider to be a bad decision, there are brave and talented managers who can talk him out of it. All in all, I would recommend the book to investors. It's brutally honest.

Yields on 10 year treasury bonds rose all the way up to 4.8% on Tuesday. Expectations of rising rates spooked the markets and caused the equities weakness.

Percent of selling tagged to shorts was a very high 66% on Tuesday, revealing lots of efforts underway to push TSLA lower.

Max pain was again 250 on Tuesday.

Tuesday's options volumes

Conditions:
* Dow down 431 (1.29%)
* NASDAQ DOWN 248 (1.87%)
* SPY down 6 (1.34%)
* TSLA 246.53, down 5.07 (2.02%)
* TSLA volume 101M shares
* Oil 89.55
* IV 53.5, 35%
* Max Pain 250
* Percent of TSLA selling tagged to shorts: 66%
* Volume at 4pm closing cross: 4.2M shares

 

[Papafox]

TSLA chart above

QQQ chart above

This post will be fun ; )
On Monday the Q3 P&D Report was released and TSLA dove to 240 before recovering to close slightly green that day. Buyers on the sideline planning to "buy the dip" did just that. On Tuesday, Nasdaq was down 1.87%, but it took percent of TSLA shorting at 66% to get TSLA to close barely worse than the Nasdaq. Our tip off to the potential from a strong Wednesday was the high level of shorting needed to keep TSLA down while the NASDAQ tanked nearly 2%. Come Wednesday, data showed private jobs weakness in September vs. expectations. That coupled with declining oil prices (they were above $90/barrel oh so recently) caused the markets to head upward. Quite simply, the market makers were unable to hold TSLA back, try as they might. You can see TSLA near 250 for the first 45 minutes of trading, then the plateau headed to $255 and by 2pm it looked like TSLA could in fact be held below 260. Alas, you can see QQQ going into climb mode for the final two hours of market trading and there was no way that TSLA could be held below 260 with that macro strength.

Interestingly, the MMs managed to coax TSLA below 260 a couple hours after market close but it then regained it's shallow after-hours climb heading to the 8pm hour.

I consider a failed manipulation to be bullish, and TSLA closing a dollar above 260 was indeed a failed manipulation. Bravo TSLA!

Percent of TSLA selling tagged to shorts fell to 57% on Wednesday, despite significant apparent shorting over much of the day. I see the reduction in shorting from Tuesday as a false signal, an attempt to keep the SEC from realizing just how significantly the market makers were working to keep TSLA first, near 250 and second, from climbing above 260. Naked shorting and borrowing shares from non-FINRA exchanges are two methods for sweeping evidence of significant shorting activity under the rug.

Fortunately, yields on 10 year treasury bonds fell to 4.71% on Wednesday

Max pain dipped to 247.50 by Wednesday morning. Strike 250 was definitely call-dominated and 260-strike call contracts numbered well over 30K. Market makers wanted to minimize TSLA's gains above 250 early in the day, but as afternoon evolved they switched their tactics to capping TSLA below 260 (which failed as well).

Wednesday's options volumes

The day's rally put TSLA back above the mid bollinger band

Conditions:
* Dow up 127 (0.39%)
* NASDAQ up 177 (1.35%)
* SPY up 3 (0.73%)
* TSLA 261.16, up 14.63 (5.93%)
* TSLA volume 129.1M shares
* Oil 84.39
* IV 52.0, 32%
* Max Pain 247.50
* Percent of TSLA selling tagged to shorts: 57%
* Volume at 4pm closing cross: 5.8M shares

 

[Papafox]

TSLA chart above

QQQ chart above
Market trading opened with a nice spike upwards of TSLA to above 263. Fortunately for the market makers, QQQ started dropping quickly in the morning and TSLA followed to some extent. Still, for much of the day TSLA traded stronger than QQQ and Nasdaq. Alas, in the final minutes of market trading TSLA took a much deeper dip than QQQ. One possibility is that was the timing for news of Model 3 getting a price cut in the U.S. The other possibility is simply that Friday is the next trading day and the market makers want TSLA below $260 for Friday's close.

News:
* CNBC says Hyundai and Kia will adopt Tesla's NACS charging standard in 2024
* Electrek says Tesla is doing preliminary hiring for Reno Gigafactory

Thankfully, climbing yields on 10 year treasury bonds has settled down. Yields closed at 4.72% on Thursday

There's a big change in open interest since Wednesday. Notice the tall put walls at 240 and 250? The purchasing of puts places downward pressure on TSLA as market makers delta-hedge the sale of these puts. The put-to-call ratio has changed from about 0.75 earlier in the weak to 1.1 Thursday morning, showing that there was an unusually high percent of puts compared to calls at that time. Nonetheless, TSLA remained reasonably strong compared to the NASDAQ on Thursday.

Thursday's TSLA options volumes

I see TSLA's remaining above 260 on Thursday as a sign of strength. It's remaining above the mid bollinger band and holding onto Wednesday's gains are both positives.

Conditions:
* Dow down 10 (0.03%)
* NASDAQ down 16 (0.12%)
* SPY down 0 (0.04%)
* TSLA 260.05, down 1.11 (0.43%)
* TSLA volume 118.1M shares
* Oil 82.86
* IV 52.7, 33%
* Max Pain 252.50
* Percent of TSLA selling tagged to shorts: 55%
* Volume at 4pm closing cross: 2.9M shares

 

[Papafox]

TSLA chart above

QQQ chart above

Friday morning in pre-market trading TSLA and QQQ did a simultaneous dip when jobs numbers came in hotter than expected (Here's CNBC's take). Alas, the part of the report the market initially ignored is that wages didn't rise much at all with that increase in jobs. Mr. Market thought about the wages side of the news, changed his mind and started buying. Unfortunately for TSLA, the market makers had already used the early market dip as an excuse for a deep Mandatory Morning DIp, and as the rest of the market ran well into the green TSLA lagged seriously behind. Note the Whack-a-mole action in early afternoon as TSLA dared to break 260. In the end, TSLA managed to close slightly above the 260 line in the sand, at 260.53 and a tiny gain. Nasdaq, OTOH, closed up 1.6%

There was Tesla news out on Friday that could have affected TSLA price action, but we scarcely heard a whisper of it from the mainstream media. TSLA first cut prices in the U.S. on Model 3 and then followed with some specific Model Y cuts. One of the TMC posters suggested that the more affordable Model Y RWD was such a bargain Tesla was losing too many orders for the higher-priced variants, and so those variants came down in price to be more competitively priced with the new Model Y RWD. Over in Europe we saw some price increases in Scandinavian countries.

What comes on Monday? Futures are down for the broader markets. TSLA underperformed the Nasdaq considerably on Friday, but perhaps Monday will be its make-up day. Market makers prefer to see the big TSLA moves (up or down) early in the week so that there's time for the stock price and max pain to come closer together by Friday. Perhaps the media has been saving price cut stories until Monday morning, which would counter any TSLA spring back. Never a dull moment with this stock.

The ER for Q3 will be Wednesday, Oct. 18.

The U.S. Treasury Department published more information about the IRA credits, as noted on X.com by Sawyer Merritt. Overall, I'm bullish on the changes taking place Jan 1 because too many potential buyers have been unable to use the full $7500 incentive to offset 2023 Fed income taxes (credits cannot be carried forward). OTOH, some incentives could well be reduced come Jan 1 as battery sourcing requirements tighten. The uncertainty should provide an incentive to a buyer capable of using most or all of the incentive for purchasing in 2023's Q4 and receiving the tax savings early in the year.

Yields on 10 yr. treasury bonds closed the week at 4.8%

It took nearly 60% of TSLA selling tagged to shorts to keep TSLA from running higher with the broader markets on Friday, but the shorting managed to keep TSLA's climb in check

Max pain Friday morning was 255. You can see the tall put wall at 250, which would discourage the MMs from pushing below 250. Meanwhile, 260 puts had grown to about half the height of calls at that strike, making 260 somewhat less frightening to MMs. OTOH, strike 265 was hugely call-dominated and would have been a problem if it was breached.

Friday's options volumes

This week was all about Wednesday's run above 260 and both Thursday and Friday's ability to maintain that substantial gain.

For this coming Friday, max pain is once again 255. Put to call ratio is about 1.0, just about an even split between puts and calls verses put contracts typically only amounting to about .75 of call contracts.

Notice how TSLA has been hit with the whack-a-mole this week any time it suggested it would climb much above 260.

For the week, TSLA closed at 260.53, up 10.31 from the previous Friday's 250.22. It's been a good week, my friends.

Conditions:
* Dow up 288 (0.87%)
* NASDAQ up 212 (1.60%)
* SPY up 5 (1.19%)
* TSLA 260.53, up 0.48 (0.18%)
* TSLA volume 117.8M shares
* Oil 82.79
* IV 50.6, 29%
* Max Pain 255 for Oct6 and 13
* Percent of TSLA selling tagged to shorts: 59%
* Volume at 4pm closing cross: 2.9M shares

 

[Papafox]

TSLA chart above

QQQ chart above

The big news that was blamed for TSLA's Monday morning dip was this story echoed by CNBC that Tesla's China deliveries were down 11% (compared to previous year) in September. Those of us in the know already understood they'd be down because of the Model 3 refresh and no M3 Highlands sold in China that month even though they were being manufactured. What a nothingburger of a story, but it got credit for the dip until the dip went away.

In many ways, TSLA trading on Monday was like Friday's. Market makers weren't trying as desperately on Monday to keep the stock down, but they did succeed in a game of whack-the-mole for the final two hours of trading that kept TSLA below 260 for the close.

Yields on 10 yr. treasury bonds closed lower at 4.65%

Max pain Monday morning was 255

Monday's options volumes

The price of TSLA has been so close to 260 for so long that the upper and lower bollinger bands are curving inward now

Conditions:
* Dow up 197 ().59%)
* NASDAQ up 53 (0.39%)
* SPY up 3 (0.64%)
* TSLA 259.67, down 0.86 (0.33%)
* TSLA volume 100.6M shares
* Oil 85.91
* IV 49.5, 26%
* Max Pain 255
* Percent of TSLA selling tagged to shorts: 51%
* Volume at 4pm closing cross: 2.0M shares

 

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TSLA chart above

QQQ chart above

Despite yet another day with TSLA doing its pre-market trading in the red, the stock shot higher minutes after open and peaked in late morning at nearly 269. On the surface, the market hours trading of TSLA and QQQ show similarities in terms of morning highs vs. afternoon levels, but the two differed in important ways. For example, TSLA's morning high was close to 3.4% up while QQQ's morning high was more like 1.2%. Also, note the unique shape of TSLA trading. The stock price headed up quickly, we saw a somewhat uniform slow march down (sledgeomatic turned on), the stock price zoomed up as MMs lost control of it, again we saw the shallow descent of the sledgeomatic operation, and the pattern repeated. At present, TSLA's put to call ratio was near 0;.8, which is pretty normal for the stock and reflects a bit more interest in call options than puts.

As far as evidence of manipulations, let me just say that the percent of TSLA selling tagged to shorts number of only 44% looks like a head fake to me because MMs had high incentive to defend 270 and get TSLA safely below 265, which they did with the sledgeomatic. Notice that QQQ didn't start its fall until about 1pm but TSLA's series of downward-sloping plateaus began around 10am. Trading during the 4pm closing cross minute was a robust 3M shares, which gave the MMs plenty of opportunity to cover their day shorting.

The MMs could not get TSLA back to 260, however, and I'll call that a manipulation failure, which is a bullish sign to me.

We're still seeing upward pressure on the stock price. I suspect much of that pressure is related to analysts such as Adam Jonas realizing (at last) that Tesla is more than just a car company. A bigger component of the pressure is likely associated with views that Q3 may well be the bottom for TSLA and that we'll see delivery and margin recoveries in Q4. Much will depend upon guidance at the Q3 ER to keep that positive sentiment alive.

Yields on 10 yr. treasury bonds held onto the deep dip that came Monday late afternoon and closed at 4.64%

Tuesday's max pain was 255, which corresponded with a strike that was even between puts and calls. Strike 260 only exceeded its puts by about 10K contracts, so it's no longer as critical for market makers to defend, but 265 is a call wall more than 30K contracts high and was vigorously defended on Tuesday. Strike 270 is nearly as high as 265 and would be defended should 265 is breached on a strong trading day. If there's weakness in Wednesday's market, getting TSLA below 260 would be the MM's play, and they might give a little "insurance" if conditions allow.

Tuesday's options volumes

You can see that at last the cap at 260 failed and TSLA was able to climb above it.

Conditions:
* Dow up 135 (0.40%)
* NASDAQ up 79 (0.58%)
* SPY up 2 (0.52%)
* TSLA 263.62, up 3.95 (1.52%)
* TSLA volume 122.3M shares
* Oil 85.95
* IV 48.2, 23%
* Max Pain 255
* Percent of TSLA selling tagged to shorts: 44%
* Volume at 4pm closing cross: 3.0M shares

 

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TSLA chart above

QQQ chart above

During pre-market trading the September PPI inflation numbers were released, and they came in somewhat hotter than expected: 0.5% month over month, instead of expectations of 0.3%. Fortunately, Mr. Market took the news in stride, perhaps because the core PPI numbers (which exclude food and energy, as pointed out here by CNBC, rose only 0.3% vs. expectations of 0.2%. Energy prices really rose in September but have subsided somewhat lately, if you hadn't noticed. Recent statements by some Fed members that rates are already high enough have calmed Mr. Market on the inflation front. Nonetheless, CPI gets more coverage than PPI, and we'll see what's cooking pre-market on Thursday.

News on Wednesday was positive, with Tesla celebrating the 20 millionth 4680 cell being produced. This is great news as it's additional confirmation that 4680 production is indeed ramping up in time for the Cybertruck release.

QQQ dipped to the red/green line about 2pm and then made a nice dash upward for the close as Mr. Market decided the PPI number just weren't going to be a problem. Unfortunately, TSLA did not follow in the late afternoon rally. Yep, I suspect it was all about the market makers wanting their close this week near 260 and being willing to turn the sledge-o-matic to high power in order to avoid a late afternoon rally. You are once again forced to consider two possible scenarios: there is just something about Tesla that causes it to trade more poorly than the rest of the market in low-volume late afternoons or we regularly have our pockets picked by the wheeler-dealer option sellers who are focused on Friday's closing price. Sorry, buying travelers checks doesn't save you on this one. The remedy, of course, is the big mega-rally that eventually happens when investors wake up after TSLA has been held down for too long.

Yields on 10 year treasury bonds dipped further on Wednesday, to 4.57%

Max pain Wednesday morning was finally 260. Looking at the open interest chart above, you can see puts and calls pretty much even at 260. Strikes 265 and 270, however, remain big call walls that the market makers seek to remain below this week.

Wednesday's options volumes

TSLA continues to hang onto those small gains above 260, despite the constant whir of the sledgeomatic.

Conditions:
* Dow up 66 (0.19%)
* NASDAQ up 97 (0.71%)
* SPY up 2 (0.41%)
* TSLA 262.99, down 0.63 (0.24%)
* TSLA volume 103.4M shares
* Oil 83.01
* IV 48.7, 25%
* Max Pain 260
* Percent of TSLA selling tagged to shorts: 49%
* Volume at 4pm closing cross: 3.7M shares

 

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TSLA chart above

QQQ chart above

Thursday was a day with quite a bit of news. Rob Maurer covered it well here in his video podcast, including CPI results coming in a bit warmer than expected, pay raises for Berlin Gigafactory employees, lower leases for Models 3 and Y, encouraging Model 3 production numbers in Giga Shanghai for September, and other news topics. As for Tesla cutting about a hundred dollars off the lease prices for Models 3 and Y, I think Farzad Mesbahi did a great job comparing lease rates and costs to run for Teslas vs. various Toyota models. With a Tesla available at the same lease price as a Toyota Prius, it's pretty insane the value that Tesla is offering to customers these days. The positive is why would you have to cut much lower than this to rule the market?

Of course Mr. Market can interpret all this news negatively or positively, depending on view. Perhaps TSLA's decline in after hours trading was a reflection of some margins concerns. OTOH, I think Nasdaq outperforming TSLA was primarily due to the slight of hand we've been routinely seeing in the final couple hours of market trading. Both QQQ and TSLA dipped quickly in afternoon trading, and both did a quick bounce initially. The difference is that QQQ kept rising into the close and TSLA was held level for nearly two hours. TSLA closed a few pennies below 259, which is exactly the sweet spot for this stock to close on Friday, so I'm pointing my finger at Mr. Market Maker on this capping exercise. OTOH, if we see weakness in TSLA on Friday (compared to the broader market) then the day's news on price adjustments would likely be the reason. Another potential negative would be Tesla pointing out (again) that the Tesla you're looking at could have its IRA subsidy cut by half in 2024 and that buyers would be wise to more in Q4 (It's a potential negative for 2024). Because of the various battery sources being utilized, LFP battery-containing vehicles could see the cut while others escape. I think Tesla is being intentionally vague to encourage as many buyers as possible to buy in Q4.

Yields on 10 yr. treasury bonds jumped a bit higher after Thursday's CPI report, closing around 4.67%

Max pain on Thursday morning remained 260, but calls crept higher than puts, giving market makers an incentive to see TSLA close below 260 on Friday

Thursday's options volumes

The weeks long game of keeping TSLA from climbing much above 260 continues

Conditions:
* Dow down 173 (0.51%)
* NASDAQ down 85 (0.63%)
* SPY down 3 (0.61%)
* TSLA 258.87, down 4.12 (1.57%)
* TSLA volume 110.7M shares
* Oil 83.45
* IV 48.6, 25%
* Max Pain 260
* Percent of TSLA selling tagged to shorts: 43%
* Volume at 4pm closing cross: 2.3M shares

 

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TSLA chart above

QQQ chart above

Looks like the recent cuts in lease prices (on top of some modest retail price cuts) was working against TSLA on Friday. Nasdaq closed down 1.23% for the day and the usual 2.1X multiplier would pull TSLA down 2.58%, and so TSLA dip of 2.99% wasn't far off that mark.

Percent of selling tagged to TSLA shorts ran higher at 52% on Friday, with a robust 3.4M shares trading during the closing cross minute at 4pm, suggesting someone was busy helping the stock go lower. Remember that the market makers aren't the only manipulators out there. Hedge funds sometimes play the game of swings within a range and TSLA has spent most of the past two months trading in the 250-260 range. Thus, it was time for TSLA to catch the down elevator. We also saw puts increase so that the Put to Call ratio moved from about 0.75 to much closer to 1.0 as the week progressed. Makes you wonder how much of that put buying was part of a manipulation (causing market makers to sell TSLA shares) and how much was a reaction to downward pressure on TSLA late in the week. The reality is that the two work together so that if fear of falling can be unleashed, the resulting put buying helps make the fear a self-fulfilling prophesy.

Wednesday will be Q3 ER and conference call after the closing bell.

As cybertruck gets closer to its release, other factors are at work to allow TSLA's future expansion. This Tweet says the CATL battery factory near Tesla's Shanghai GF is now complete and ready to begin production. My eyes will be on 4680 cell news this ER. If Tesla is satisfied with the state of 4680 production now, it can expand U.S. production and realize truly amazing economies eventually from the cell's advantages but more so from the IRA credits to Tesla for producing the cells within the U.S. and with ingredients sourced from friendly countries. Hoping to get an idea of just when the cost savings begin. Tesla's lithium refinery in Texas plays into this plan.

Truflation.com is showing U.S. inflation currently at 2.28%, roughly 1.4% below the official (CPI) computation.

Yields on 10 yr. treasury bonds cooled on Friday and closed around 4.61%

Percent of selling tagged to TSLA shorts ran up to 52% on Friday

Max pain on Friday morning was 260. You can see that both 250 and 255 were heavily put-dominated, and so there was no apparent reward to the market makers for pushing lower

Friday's options volumes

With the exception of Friday, TSLA traded mostly level this past week. Chart courtesy of @JimS

For this coming Friday, we have a longer (monthly?) expiration, which accounts for the heavy volumes and duplicate heavy puts and calls on many strikes. Max pain is 250

TSLA's decline on Friday was stopped by the blue 50 day moving average. Notice how the 50 DMA worked out to be the ceiling for the better part of two week's trading in late August/early September.

For the week, TSLA closed at 251.12, down 9.41 from the previous Friday's 260.53. Hoping you all spent your weekends spending quality time with those who matter to you.

Conditions:
* Dow up 39 (0.12%)
* NASDAQ down 167 (1.23%)
* SPY down 2 (0.50%)
* TSLA 251.12, down 7.75 (2.99%)
* TSLA volume 101.9M shares
* Oil 87.69
* IV 51.2, 32%
* Max Pain 260 for Oct 13, 250 for Oct 20
* Percent of TSLA selling tagged to shorts: 52%
* Volume at 4pm closing cross: 3.4M shares

 

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TSLA chart above

QQQ chart above

Time constrained report
TSLA benefitted from the positive macro environment and climbed 1.12% compared to the Nasdaq's 1.20% gain, that's less than the Nasdaq gain and considerably less than the 2.1X multiplier. What's up? I'd day that with really low volume 0f only 88M shares, TSLA's trajectory was easy to "adjust". If you look at the max pain chart, you'll see that 250 was a tall put wall but 255 was a low call wall. Thus, 250-255 was the sweet spot and TSLA ended up solidly in that range.

Big news was a MotorTrend Review of Model 3 Highland. Tesla releasing a vehicle to MotorTrend for current drive report is a good indication that Highland sales are coming to the U.S. sooner rather than later.

Another important story was news that Tesla is looking for a country manager in Chile, according to Electrek. Yes, the expansion to South America is coming, too.

Yields on 10 yr. treasury bonds closed at 4.7% on Monday

Max pain Monday morning was 250. You can see that strike 250 is a tall put wall but strike 255 is a low call wall. Market makers want to be between 250 and 255. Strike 260 is a tall call wall and something to be avoided.

Monday's options volumes

TSLA began at the 50 day moving average, slightly dipped below, then gained by day's end. Monday market the end of three negative trading days. Note the low volume.

Conditions:
* Dow up 314 (0.93%)
* NASDAQ up 161 (1.20%)
* SPY up 5 (1.05%)
* TSLA 253.92, up 2.80 (1.12%)
* TSLA volume 88.7M shares
* Oil 86.91
* IV 48.0, 23%
* Max Pain 250
* Percent of TSLA selling tagged to shorts: 53%
* Volume at 4pm closing cross: 3.4M shares

 

[Papafox]

TSLA chart above

QQQ chart above

Tuesday got off to a rocky start as retail sales came in much hotter than Mr. Market expected, 0.7% month over month vs. 0.3%. That strength of retail sales translated to a big jump in yields for 10 yr. treasury bonds (see below) as the market figured that with consumers spending more money than expected, inflation is going to be higher. Both QQQ and TSLA experienced big morning dips, but TSLA managed on the recovery to climb into the green and remain there for the remainder of market trading.

Such TSLA strength didn't sit well with the market makers and they wanted to see TSLA below 255, and so with 54% of TSLA selling tagged to shorts, the big option sellers got their way again. A robust 3.1M shares traded during the 4pm minute.

Deceptive title of the day award goes to Reuters for this Tesla to recall nearly 55,000 Model X vehicles, auto regulator says. It's really a non-story because the recall will be handled by an over-the-air update, but no doubt some gullible albots got snookered by the title.

Wednesday will of course be Earnings Report day for Tesla's 3Q23. Yahoo's latest estimate from analysts is for a 70 cents per share earnings, which is few pennies lower than a few days ago.

Roland Pircher's latest X.com graphic shows that analysts typically underestimate non-GAAP EPS for TSLA

Yields on 10 year treasury bonds close up at 4.84%

Max pain Tuesday morning was 250 again, which coincided with a pretty tall put wall. Strike 255, OTOH, was nearly neutral and much lower. TSLA closing nearer to 255 as we set up for the ER is a comfortable place for the market makers.

Tuesday's options volumes

For the third day in a row, TSLA began or ended its day at the blue 50 day moving average.

Conditions:
* Dow up 13 (0.04%)
* NASDAQ down 34 (0.25%)
* SPY down 0 (0.00%)
* TSLA 254.85, up 0.93 (0.37%)
* TSLA volume 93M shares
* Oil 87.22
* IV 48.2, 25%
* Max Pain 250
* Percent of TSLA selling tagged to shorts: 54%
* Volume at 4pm closing cross: 3.1M shares

 

[Papafox]

TSLA chart above

QQQ chart above

ER day turned out to be pretty ugly with market and after-hours losses totaling 9%.
Shortcomings in the Q3 quarter included:
* non-GAAP EPS of 0.66 compared to analyst expectations of 0.70
*Gross automotive margins of 17.9% vs. expectations of a bit over 18%
* Elon reiterated how difficult Cybertruck will be to get to full production and suggested it'll take 18 months
* Elon saying that 50% growth rate is no longer the aim, GigaMexico construction is being delayed until 2024 due to economic uncertainty

Positives in theQ3 ER and conference call included:
* Cash and investments now total $26 billion
* Tesla energy revenue has doubled from previous year and profit margins are now 24%. That's an extra $500M to the bottom line in the quarter
* The size of Tesla's current AI computer web (used for FSD development) has doubled over the past quarter
* Cybertruck delivery date has been set for Nov. 30, 2023
* Tesla reiterated 1.8 M vehicles will be delivered in 2023. That's about 476K deliveries in Q4 to make it happen, which would be a record quarter.

As far as a balanced view of the ER, I suggest taking a look at Dave Lee's youtube video. Dave weighed the caution being shown by Elon regarding expansion versus the strong focus on AI and FSD development. I also agree with Dave that it's better to remain nimble with capacity during economic (particularly interest rate) uncertainty, rather than boldly keep the 50% growth going. Tesla can and will accelerate its plans once the car selling environment improves.

So, I imagine that some analysts will cut price targets in the short term to reflect slower growth. Mr. Market will get worried, as he is known to do. OTOH, the long-term growth story of Tesla still looks very good.

Here's another consideration. Automotive gross margins have dropped from 25% to below 18% within the past year. Check out the cadence, though: 3Q22: 25.1%, 4Q22: 23.8%, 1Q23: 19.3%, 2Q23: 18.2%, 3Q23: 17.9%. It's obviously diminishing, even with the recent factory shutdowns and price cuts. There's reason to believe that 3Q23 could be the immediate bottom, particularly with Tesla pushing less hard on growth over the next few quarters. Whereas Model 3 was the weak sister in the 3 and Y main products of Tesla during Q3, in Q4 we will be seeing M3 Highland selling well in its markets, which are pretty much all those outside the U.S.

Yields on 10 yr. treasury bonds rose on Wednesday to 4.95%. Such bond yields put pressure on stocks because there is increased incentive to move some money from stocks to bonds.

Max pain Wednesday morning was 250.

Wednesday's options volumes

The lower bollinger band was 238.55, which would normally be a nice source of support, but in after hours trading TSLA had already dipped below 233.

Conditions:
* Dow down 333 (0.98%)
* NASDAQ down 219 (1.62%)
* SPY down 6 (1.33%)
* TSLA 242.68, down 12.17 (4.78%)
* TSLA volume 113.2 M shares (note: the tech chart above shows 125M shares for volume, likely taking after-hours trading into account)
* Oil 88.10
* IV 51.6, 35%
* Max Pain 250
* Percent of TSLA selling tagged to shorts: 49%
* Volume at 4pm closing cross: 4.9M shares

 

[tivoboy]

I don‘t believe the Gross Margin % is considered only “automotive” margin anymore, and is overall “gross margin” which includes energy storage as well. So it’s not the apples to apples “gross automotive margin” ppl were tracking in mid 2022. Tesla noted I believe in Q1 23, that they would no longer report actual “gross automotive margin”

update: yes, I just checked and Q1 2023 “update” which was the Q1 2023 report, was the first report which no longer reported “automotive gross margin”.