Papafox's Daily TSLA Trading Charts

[Papafox]

TSLA chart above

QQQ chart above

As Friday trading began, it was clear that the macros were ready to climb. Nasdaq gained 2.05%. If TSLA traded at its beta, it would gain more than 4% and erase much of the week's losses. Alas, that reality didn't sit well with the option sellers (market makers and hedge funds), who saw a 24K contract high call wall at 215. You can see in the top chart how TSLA suffered oversized pushdowns whenever QQQ dipped. From about noon to 1:30ish the capping took place at about 213, giving a $2 margin, but with QQQ marching higher as the day progressed that cap failed and TSLA spent the rest of the trading day flirting with 215. At Close the MMs succeeded in keeping TSLA below 215 by 35 cents. If you wonder why TSLA tends to trade slowly for long stretches before making eye-watering big breakouts, this past week is a good example. Our time will come.

The 44% of selling tagged to shorts on Friday suggests to me that the MMs and hedgies really didn't want their fingerprints on the solid capping effort and so they borrowed from non-FINRA exchanges when needed. The hefty 4.8M shares traded at 4pm is more telling.

The positives of the week were twofold:
* Ron Baron spoke to CNBC about his investments in Tesla and SpaceX and laid out why both are likely to multiply their values many times over this decade. The biggest eye-opener was a statement that the $25K Model 2 Tesla was only about a year to a year and a half away. I trust Ron Baron has good reasons for saying so.
* We learned about Grok and how X.ai would possibly use Tesla vehicles (when not driving) to augment Tesla's computer hardware someday so that Grok queries could be addressed on personal Teslas whose owners have agreed to receive funding for such a use. The convergence of so many ai efforts including FSD, Optimus, and Grok is leading to a very exciting future for Tesla.

Yields on 10 yr. treasury bonds closed near 4.63% on Friday

Max pain Friday morning was 215. You can see, though, that 215 calls were some 24K contracts high and the market makers decided to draw the line at least a penny below 215. The close was 214.67, so they managed their goal with 35 cents to spare. Thus, the vast majority of puts and calls all closed out of the money, again. There's a name for people who regularly bet money on weekly options. They're called chumps.

Friday's options volumes

Last Friday, the MMs were really working to keep TSLA below 220 on the close, and they succeeded by 4 pennies. This week the max pain (which was also a 24K contract-high call wall) was achievable if sufficient shorting was used, The MMs made it by 33 cents this week. Remember that the MMs don't necessarily shoot for max pain on Fridays. Sometimes a particularly high call wall is what needs to be protected. Chart courtesy of @JimS

For this coming Friday, max pain is 220. That strike is a tall call wall, though, so MMs want to keep TSLA below 220. Strike 215 is neutral and so it's a desired close. Strike 210 is put-dominated and 200 is a tall put-wall, so the MMs don't want to see a big dip either.

TSLA lost about $5 over the past week, mostly due to the HSBC note and heavy manipulations on Friday that held TSLA below 215.

For the week, TSLA closed at 214.65, down 5.31 from the previous Friday's 219.96. Hoping your weekend was meaningful and spent with those who matter.

Conditions:
* Dow up 391 (1.15%)
* NASDAQ up 277 (2.05%)
* SPY up 7 (1.56%)
* TSLA 214.65, up 4.67 (2.22%)
* TSLA volume 130.8M shares
* Oil 77.17
* IV 45.3, 15%
* Max Pain 215 for 11/10, 220 for 11/17
* Percent of TSLA selling tagged to shorts: 44%
* Volume at 4pm closing cross: 4.8M shares

 

[Papafox]

TSLA chart above

QQQ chart above

Congrats, longs, TSLA ran up 4.22% on Monday and then another 1.15% after hours. In contrast, Nasdaq lost 0.22%. What was the reason? I think it's hard to assign a single reason and sometimes we just don't know. Possible reasons include all the good news of the past two weeks that was overshadowed by a flawed HSBC assessment and price target. In a few days the market figured out it had been snookered. Most likely reason for the positive price action on Monday was word from British gas station provider EG signing up to install a large number of Tesla superchargers on its property. This European development follows the BP announcement for deploying superchargers in the U.S., and we know that as the number of superchargers grows, concerns about charging decrease among those considering a move to an EV for the first time. Other possible catalysts are the Cybertruck event on Nov. 30 and a Q4 which looks to be on track for record production and deliveries. According to Electrek, India is considering a five year tariff relaxation on Tesla imports to encourage the company to build a factory in the country. I say Bravo to those deciding it's time to pull the trigger and pick up TSLA shares.

In more recent news, a poster on x.com says additional small price increases to certain Tesla vehicles happened in China today.

Strong after hours performance bodes well for Tuesday's opening.

Yields on 10 yr. treasury bonds closed at 3.65% on Monday

Max pain Monday morning was 216.50. The big call wall on the chart is at 217.50, which is now ancient history. Strike 230 has about 17K more calls than puts, and so it's likely to be the next draw a line in the sand point for the MMs. Since the day's big run higher occurred on a Monday, there's lots of time for the market to readjust put and call bets so that the market makers can do okay come Friday.

Monday's options volumes

It only took two trading days for the market to overrule the flawed HSBC sell rating and low price target for TSLA. The stock has regained a price above the 200 day moving average once again.

Conditions:
* Dow up 55 (0.16%)
* NASDAQ down 31 (0.22%)
* SPY down 0 (0.10%)
* TSLA 223.71, up 9.06 (4.22%)
* TSLA volume 137.6M shares
* Oil 78.59
* IV 45.3, 15%
* Max Pain 217.50
* Percent of TSLA selling tagged to shorts: 41%
* Volume at 4pm closing cross: 3.7M shares

 

[Papafox]

TSLA chart above

QQQ chart above

Tuesday got off to a great start with a CPI report that was not only lower than the previous month's but also beat estimates by 0.1% for both the headline CPI and the core CPI. Here's CNBC's take. The Nasdaq and QQQ took off after the CPI numbers came out at 8:30am and it was off to the races. Nasdaq closed up 2.37%, and even at TSLA's recent beta of 2.28, that would be a 5.4% and TSLA instead closed up 6.12%. So... even though most of TSLA's gains on Tuesday came from the macros, the stock had some rocket fuel of its own.

Percent of selling tagged to shorts was a low 41% on Monday, perhaps suggesting that MMs were letting the stock price run (Mondays are the safest day of the week to do so). On Tuesday, that number rose to 51%, which is still not particularly high but suggests some effort to throttle back TSLA's climb. I suggest they'll be trying harder on Wednesday.

One interesting piece of news was this x.com clarification by Martin Viecha of a Gary Black Tweet. Martin told a group of investors that Tesla is presently in a lull between 3/Y introduction and the coming intro of Generation 3 vehicles. The clarification is helpful because we see the means by which Tesla can return to its previous higher growth.

Reasons TSLA may have more climb left in it this week:
* If the PPI inflation numbers are cool on Wednesday morning, the market may have another run and TSLA could get swept along. PPI numbers are for cost of production, and so they're forward looking. Good news on Wednesday suggests good news coming to the CPI later.
* TSLA is in beast mode this week. Sometimes its hard to stop a speeding freight train.

Reasons TSLA may not have much more climb left in it this week:
* Market makers look like they've restrained themselves this week on the manipulations. Sometimes it's best to let the stock run higher earlier in the week (but make sure you're delta-hedged) so that TSLA gets some of that pent-up climbing out of the way. Option bets will change as the week progresses and the MMs can do their tweaking at week's end.
* Strikes 230, 240, and 250 are tall ascending call walls that the market makers would like to protect at some point this week
* TSLA has reached the upper bollinger band, and some big investors hold off buying above the upper BB. OTOH, a cool PPI report could be enough to send TSLA above the upper BB for a day or two.
* Back in September, we saw TSLA hit its head on the blue 50 day moving average (see tech chart) and then retreat. Market makers and hedge funds might use the 50 DMA as a line in the sand again.

Fingers crossed the PPI numbers are cool and we get another green day.

Yields on 10 yr. treasury bonds fell considerably after the CPI numbers came out. Yields were about 4.44% at day's end. Keep in mind that yields were pushing 5% just weeks ago. This is a significant turnaround.

Max pain was 217.50 Tuesday morning. This number is now irrelevant. You can see progressively ascending call walls at 220, 230, and 240 strik

Tuesday's options volumes

What's nice about TSLA's trading this week is not only the price action but also the volume of that positive price action. It's harder to manipulate high volume compared to low. TSLA rose to nearly the lower bollinger band on Tuesday (237.48 vs. 237.41 stock price).

Conditions:
* Dow up 489 (1.43%)
* NASDAQ up 327 (2.37%)
* SPY up 9 (1.94%)
* TSLA 237.41, up 13.70 (6.12%)
* TSLA volume 146.5M shares
* Oil 78.41
* IV 43.7, 7%
* Max Pain 217.50
* Percent of TSLA selling tagged to shorts: 51%
* Volume at 4pm closing cross: 5.1M shares

 

[khorton]

Typo alert:

"TSLA rose to nearly the lower upper bollinger band on Tuesday (237.48 vs. 237.41 stock price)."

 

[Papafox]

TSLA chart above

QQQ chart above

Wednesday morning the PPI numbers showed that wholesale prices fell 0.5% in October, versus expectations of a 0.1% rise. This was the biggest monthly drop in wholesale prices since April of 2020, according to CNBC. These numbers set the markets up for another green day, but the Dow did better than the Nasdaq. With Nasdaq up only 0.07%, TSLA's climb of 2.29% was much stronger.

One contrarian indicator at the moment regarding the inflation trend is truflation.com's data. These people have posted inflation estimates that are often 1% or more below the official CPI numbers. At the moment, though, CPI has fallen to 3.2% and Truflation's inflation index has risen to 3%. Let's see how this shakes out and whether Truflation is ahead of the curve or perhaps off-course at the moment.

Although TSLA exceeded 246 in the morning, it faded to closer to 242 at close. Part of the fade was that TSLA was reflecting the Nasdaq's fade into close but there's much more to consider. This week, from Monday to Wednesday, percent of TSLA selling tagged to shorts moved from 41% to 51% then to 60% on Wednesday. That's a huge swing that I suggest is related to option sellers really rolling up their sleeves and getting serious about stopping TSLA's climb this week. A robust volume of 4.6M shares on Wednesday's closing cross would have allowed for heavy covering of day shorting activity. I believe the numbers we're seeing are telling a story of market makers allowing TSLA to run on Monday because buying pressure clearly was pushing in that direction, then on Tuesday the effort began in earnest and on Wednesday we were seeing serious efforts to douse the rally. After such a nice run upwards, traders join in the buying and if the run can be halted then the traders will take their profits and do the market makers' work for them.

Much of this week's strength has been due to a shift in the "Tesla is an automaker" mindset to "Tesla is an ai technology company that led the EV revolution". Last week the HSBC note defined Tesla as an overpriced auto company and the stock fell. This week Goldman-Sachs joined Morgan Stanley in viewing Tesla as an innovative company with greatly expanding TAM and a move towards higher yield (such as software and licensing) business opportunities (see this Brighter with Herbert video podcast). If the media can shift the emphasis of Tesla back to struggling automaker, then the stock goes down. When the bright future is focused upon, the stock goes up. I say these things to explain why TSLA is so volatile these days and why manipulations (including FUD) can be so effective in this manic-depressive attitude towards Tesla.

One potentially negative news story of the day was news that Tesla has started some discounting of inventory Model 3s in the U.S. My reaction? If we are halfway through Q4 and only now are seeing some inventory price reductions on Model 3, it's selling far better than I would have imagined with Highland refresh just around the corner.

One potential surprise to the Wall Street pirates could be a successful launch of Starship on Friday morning. Such an accomplishment could help restore Elon's halo and emphasize the technological wizardry of Elon's companies including Tesla.

Percent of TSLA selling tagged to shorts rose from 41% on Monday to 60% on Wednesday as the market makers and hedge funds get serious about nipping TSLA's rally this week.

Yields on 10 year treasuries rose slightly to 4.5% on Tuesday

Max pain Wednesday morning was 220. It's a strange setup of puts and calls leading into Friday. There's a tall call wall at 217.50. Between 217.50 and the tall call wall at 240 is a no-man's land of mixed puts and calls. Then there's an unusually high put presence at 250 (which is overpowered by the 250 calls). I think the most likely strategy of market makers going into Thursday would be to try bringing TSLA back below 240. It looks like they started that process Wednesday afternoon.

Wednesday's options volumes. Strike 245 calls were heavily traded.

TSLA's strength on Tuesday brought it above the blue 50 day moving average, which is noteworthy. TSLA also rose above the upper bollinger band, which was at 237.53 for close. One of my observations over the years has been that TSLA generally doesn't spend more than about 2 days above the upper bollinger band before returning inside the bands.

Conditions:
* Dow up 164 (0.47%)
* NASDAQ up 9 (0.07%)
* SPY up 1 (0.21%)
* TSLA 242.84, up 5.43 (2.29%)
* TSLA volume 149.5M shares
* Oil 75.94
* IV 44.6, 12%
* Max Pain 220
* Percent of TSLA selling tagged to shorts: 60%
* Volume at 4pm closing cross: 4.6M shares

 

[Papafox]

TSLA chart above

QQQ chart above

As expected, Thursday marked the profit-taking stage of TSLA's recent rally, with TSLA falling 3.81% to close at 233.59. In contrast, Nasdaq was up 0.07%. I think the market makers were determined to get TSLA below 240 on Thursday, but the auto sector was way down, and with a tiny bit of pushing TSLA lost nearly 4%.

Rob Maurer did his usual excellent job of summarizing what's happening in the Teslasphere and the chart above came from his Thursday edition. You can see that auto stocks were way down. Ford, GM, and Lucid did better than TSLA but Rivian was considerably worse.

Friday should be some fine tuning of the stock price by the market makers as we get a better idea of how the puts and calls are positioned by looking at Friday morning's max pain chart.

The launch of Starship has been postponed until Saturday, due to a repair that required Starship to be destacked from the booster. Don't miss the show on Saturday or whenever it goes. As Elon says, "Excitement guaranteed."

Yields on 10 year treasury bonds closed near 4.44% on Thursday

Max pain is 227.50. The put to call ratio is now about 1.2, which is considerably above the typical 0.75 . Such a move in the ratio shows that investors have been buying more puts than calls recently. The market makers don't typically provide much levitation when TSLA is dipping below max pain, but I've seen exceptions when they prevent TSLA from falling below a particularly tall put wall.

Thursday's options volumes

TSLA fell on Thursday and bounced at the same lowest price for Tuesday's trading. The upper bollinger band rose to just below 240 and along with TSLA's dip brought TSLA back within the band

Conditions:
* Dow down 46 (0.13%)
* NASDAQ up 10 (0.07%)
* SPY up 1 (0.12%)
* TSLA 233.59, down 9.25 (3.81%)
* TSLA volume 135.8M shares
* Oil 72.90
* IV 45.5, 17%
* Max Pain 230
* Percent of TSLA selling tagged to shorts: 51%
* Volume at 4pm closing cross: 4.5M shares

 

[Papafox]

TSLA chart above

QQQ chart above

Friday was a roller-coaster for TSLA investors that worked out ok. We saw a massive dip below 227.50 after market open and then a quick recovery, even though QQQ was much more sluggish in the recovery. Translation? I think so much of what the mandatory morning dips are about is a test to see if the market can be prodded to get worried about TSLA and start selling. When we see an immediate recovery, such as on Friday morning, then we learn what's possible for the day. I think various entities which can benefit from a dip start the MMD, algos and gullible investors follow, and then the smart money buys the dip once it's apparent it's not going any lower. TSLA is a great long-term investment IMO, but on a day to day basis it really is a casino, and not an honest one at that.

The issue that I think the hedgies were testing Friday morning was investor sentiment regarding Elon's controversial post on X.com. Could they get a deep dip on fear through media misrepresentation of Elon's comments? The answer was no, at least on Friday. I think Rob Maurer spoke for many of us on the subject during this episode of Tesla Daily.

Looking at the week, it's been a good one for Tesla. The stock gained nearly $20 for the week. Expectations of inflation came down, first with a cooler than expected CPI and then a particularly encouraging PPI the next day. Yields on 10 year treasury bonds had been pushing 5% a few weeks ago and now are under 4.5%. Although we've heard of inventory discounts in the U.S. on Model 3 (totally expected with Highland coming), the other vehicles have been doing well in pricing and a new rumor of additional price increases in China for Teslas is circulating. These rumors are helpful for Tesla because they encourage buyers to either place an order or take delivery before the price increase. So far, Tesla looks to be on track to deliver 1.8 million vehicles in 2023. Additionally, 4680 battery development continues to look good with output increasing more than 20% per month according to this Brighter with Herbert video. As 4680 output continues to grow, it not only increases available batteries for cybertruck and other Tesla vehicles, but it also sets Tesla up to reap some very nice incentives for producing those batteries in the U.S. So, we have decent volume in Q4 without the margin pressure so far. Add in cybertruck deliveries on Nov 30 (less than 2 weeks away) and the quarter is looking pretty good so far.

Starship flew on Saturday and from a standpoint of launchpad and rocket health, the launch was lightyears ahead of the first. With both booster and starship going kablooy, the event wasn't the incredible success that Elon needed to obtain a halo, so no effect on TSLA price. Let's see how launch 3 goes.

Let me remind you that the Thanksgiving week has sometimes been rocky in terms of bear attacks, with no trading on Thursday and short trading day on Friday. OTOH, we now have more like 3% short interest rather than something pushing 30%, and perhaps the Thanksgiving bear attacks are a thing of the past. Time will tell. Speaking of bears, Jim Chanos is closing his main hedge funds after making a small fortune from an enormous one. Here's Steven Mark Ryan's take.

As long as Tesla remains on course with deliveries and pricing this quarter, time is working in our benefit as we await the cybertruck event and then the end of the year.

Yields on 10 yr. treasury bonds ended the weekend at about 4.47%

Max pain was 227.50 Friday morning. You can see strike 235 was pretty much neutral (just slightly putish) with call walls to the right and put walls to the left. TSLA closing within 70 cents of 235 served the market makers well. Just another coincidence, I'm sure. /s

Friday's TSLA options volumes

Official max pain spent the week trying to catch up with the stock price and never did. Nonetheless, 235 was a sweet closing price for the option sellers. Chart courtesy of @JimS

For this coming Friday, strikes 240, 250, and 255 are the tall call walls.

You can see the mid bollinger band starting to angle up again as this past week's price action is taken into account.

For the week, TSLA closed at 234.50, up 19.85 from the previous Friday's 214.65. It's been a good week my friends. Hoping your weekend was meaningful.

Conditions:
* Dow up 2 (0.01%)
* NASDAQ up 12 (0.08%)
* SPY up 1 (0.12%)
* TSLA 234.30, up 0.71 (0.30%)
* TSLA volume 142.1M shares
* Oil 75.89
* IV 45.6, 19%
* Max Pain 227.50 for both 11/17 and 11/24
* Percent of TSLA selling tagged to shorts: 48%
* Volume at 4pm closing cross: 3.7M shares

 

[Papafox]

TSLA chart above

QQQ chart above

Yep, this must be Thanksgiving week already. Right after market open TSLA did a big Mandatory Morning Dip to see if investors could be scared out of their shares. That deep dip was bought up so quickly that it suggested plenty of investors are standing by looking for bargains right now. Until 2pm, TSLA was involved in a game of whack the mole at the red/green line even though the NASDAQ and QQQ were heading substantially higher. You can see what looks like capping throughout the day around 235. Around 3pm the pirates lost control of the cap and TSLA ran higher, making up for some of the day's underperformance. Alas, QQQ gave a very small pullback near close and you can see that tiny pullback was used as an excuse for taking away about half of TSLA's gains for the days. Bottom line: strong MMD, lots of whack the mole, lots of capping and we had our pockets picked going into close.

To support the narrative above, let me offer evidence which includes percent of TSLA selling at 62% and a robust 3.6M shares trading in the final minute. The bad news is the pirates were shorting the "sugar" out of TSLA on Monday. The good news is that the manipulations failed at day's end (but unfortunately the stock got walked down significantly in the final minutes of trading).

A small but possible factor in Monday trading was the development at open.ai where Sam Altman was fired, Greg Brockman left, both were hired at Microsoft to run another ai effort, and a majority of open.ai employees asked the board to resign. This is a major meltdown of open.ai which is very well explained in this video by Dave Lee. The team may be formed again at Microsoft or a subsequent spinoff, but the shuffle is going to cause some delay, giving alternate ai companies such as X.ai an opportunity to play catch up. Remember that X.ai uses Tesla computers and our company will benefit from X.ai's success. Also note that defection capital is a real thing in the technology world. Sam and Greg were able to get all the compute they wanted from Microsoft and I guess write their own ticket. It's more about the people with talent sometimes than the company itself. This is why having Tesla and SpaceX attracting the top engineering students from around the world is such a big deal.

Progress Report. We're seeing cybertrucks spring up in multiple cities including San Diego and San Jose. Just imagine how many mall shoppers a cybertruck will bring into a Tesla store. The visitors will be told it's two years of wait for a cybertruck, but look at these great other Teslas that are available right now. Would you like a test drive? I suspect cybertruck is going to sell far more other Tesla than it's going to steal. Call it a shopper magnet.

Percent of selling by shorts was 62% on Monday, indicating LOTS of downward pressure manipulations. Normally you don't see so much pressure on a Monday, but this is an unusual week and the pirates are busy. Chart: yellow line is stock price, top of other colors is percent of selling tagged to shorts.

Yields on 10 year treasury bonds fell below 4.4% on Monday

Maximum pain was 230 Monday morning. Slowly, the max pain is rising toward the stock price, but this is an easy manipulation week, so anything is possible. Option buyers were generally wary this week with a higher-than-normal 0.96 put to call ratio when this chart came out Monday morning. That ratio changed to a more typical 0.79% at day's end as more call options were bought.

TSLA options volumes

Notice the three recent trading clumps. They're all on downward slopes with a big gap higher to start the next clump and then a repeat performance. Notice the upper bollinger band heading higher now and giving TSLA some headroom. Each of the gap ups was preceded by two strong up days, but the past two up days of this recent clump have been quite a bit weaker, so don't hold your breath.

Conditions:
* Dow up 204 (0.58%)
* NASDAQ up 159 (1.13%)
* SPY up 3.47 (0.77%)
* TSLA 235.60, up 3.47 (0.55%)
* TSLA volume 115.3M shares
* Oil 77.60
* IV 43.7, 8%
* Max Pain 230
* Percent of TSLA selling tagged to shorts: 62%
* Volume at 4pm closing cross: 3.6M shares

 

[Papafox]

TSLA chart above

QQQ chart above

Even though the market makers succeeded in holding down TSLA on Monday (compared to the macros), TSLA made up for it on Tuesday with a 2.38% gain vs. the Nasdaq's loss of 0.59%. For those of you who like to have fun with math, if Nasdaq was up 1.1% on Monday and TSLA has about a 2.1X beta, TSLA should have been up about 2.3% instead of its 0.5ish% gain (for a deficit of about 1.8%). On Tuesday TSLA outperformed Nasdaq by about 1.8%. There's absolutely no science behind these numbers, they're just a fun way to suggest that on Tuesday TSLA pretty much made up for the manipulations it encountered on Monday.

Notice that the capping on Tuesday looked to hold TSLA below 242. My guess would be to keep the price close enough to 240 to push it down there by Friday close, if possible. We saw 58% of TSLA selling tagged to shorts on Tuesday, suggesting lots of manipulations afoot.

Looking for a news story to two to justify TSLA's strength on Tuesday? Consider:
* Teslarati says that Tesla is making progress with an entry into India that would include reduced tariffs for imported vehicles and an eventual factory to be built within the country.
* Roland Pircher's x.com graphs (see #2) of Tesla weekly China insurance registrations suggests that Tesla deliveries within the country are approximately even with the best quarter so far (3Q23) at this point in the quarter.
* X.com user Tsla Chan says that Tesla just raised the price of Model Y LR in China by 2,200 yuan
* X.com user Yan Chang says that FSD instructions are now added to the Tesla owners manual in China (suggesting that FSD is not far away in China).

We're not much more than a week away from cybertruck reveal and we may see some ascent of the stock price prior to the reveal. What happens the trading day after the reveal is anyone's guess and much depends upon whether Elon reiterates the difficulty of building the vehicle or instead focuses on really showing off what an attractive truck this is.

Correction: @Artful Dodger pointed out in the main investors forum that x.ai uses their own H100 cluster. Thus I overspoke the computer connection between x.ai and Tesla. Nonetheless, if x.ai develops Grok to become an attractive service with consumers, Elon said that it might be possible to use Tesla vehicles not in use to do Grok's work (which would give Tesla and the vehicle's owner some income).

Percent of TSLA selling tagged to shorts was 58%, down slightly from Monday because with down market not as much was needed.

Yields on 10 yr. treasury bonds closed at 4.41%

Max pain Tuesday morning was 230. The sweet spot for market makers looks to be 235 which is neutral, with strong movement to puts below and calls above. MMs will try to bring TSLA below 240 by Friday's close because 240 call wall is more than 35K contracts high.

Tuesday's TSLA options volumes

Tuesday would have been the big gap up day if the pattern of the previous two clumps held true. TSLA didn't have as strong of two days leading into the jump higher day (Tuesday) and macros were red, all of which contributed to a more subdued climb. Still, we closed above the 50 day moving average and I'm happy.

Conditions:
* Dow down 63 (0.18%)
* NASDAQ down 85 (0.59%)
* SPY down 1 (0.22%)
* TSLA 241.20, up 5.60 (2.38%)
* TSLA volume 120.7M shares
* Oil 77.66
* IV 43.6, 7%
* Max Pain 230
* Percent of TSLA selling tagged to shorts: 58%
* Volume at 4pm closing cross: 2.6M shares

 

[Papafox]

TSLA chart above

QQQ chart above

Hoping no one received whiplash from the TSLA trading these past few days. TSLA greatly underperformed Nasdaq on Monday, overperformed in the same amount on Tuesday and then greatly underperformed again on Wednesday. We've seen high percent of selling tagged to shorts on all three days, with 56% of selling tagged to TSLA shorts on Wednesday. No news of significance justified these wild moves unless open.ai's mess helped TSLA as an ai play on Tuesday and then some mending of the open.ai mess hurt TSLA on Wednesday. Mostly, chalk the volatility up to Thanksgiving week shenanigans.

Correction on a correction
Regarding the relationship of x.ai and Tesla, it looks like my instincts might after all have been serving me well regarding the opportunity for Tesla to share compute with x.ai. Dave Lee is a former TMC regular and someone who has personally journeyed into the ai world. He's the perfect source to learn more about Tesla's ai opportunities. Check out this series of Tweets below:

Perhaps Tesla plans to offer some compute opportunities to x.ai in exchange for equity in x.ai for TSLA investors, or perhaps the equity stake could be gained with a cash infusion to x.ai that they could use for purchasing compute. In any event, ai will be the 1000 lb. gorilla on Wall Street when artificial general intelligence is cracked. Microsoft and Google are already investing heavily in AGI and Tesla could as well, through an equity stake in x.ai. If you think the automotive world is a large Total Addressable Market, you would be shocked to see just how much bigger a TAM that AGI would offer. If Tesla wants to have the highest market cap in the world some day, it'll need to get into ai bigtime. Besides, Tesla needs Grok for its vehicles and Optimus. Here's a link to Dave Lee's youtube video that explains the situation. Get spun up on ai because it's going to be a big deal for Tesla and the whole world in the future.

News:
* Highland Model 3 Performance news emerging (for deliveries beginning 1st half of 2024)

Shorts were tagged with a robust 56% of TSLA selling on Wednesday. You can see various examples of short percentage of selling spiking on days when the stock price tops out. I think there's much cause and effect rather than simple correlation here, with the short-selling spikes causing the stock price to top out.

Yields on 10 year treasury bonds are leveling off, with a close of 4.41% on Wednesday

Max pain Wednesday morning was 235. TSLA close was 234.21. Hmmm. MMs have TSLA price just about right where they want it. Now the job becomes keeping TSLA below 240 through Nasdaq's 1pm closing on Friday.

TSLA Wednesday options volumes

I consider TSLA's nearly 3% dip on Wednesday as primarily an artifact of an easy-to-manipulate holiday week

Conditions:
* Dow up 185 (0.53%)
* NASDAQ up 66 (0.46%)
* SPY up 2 (0.39%)
* TSLA 234.21, down 6.99 (2.90%)
* TSLA volume 117.8M shares
* Oil 76.22
* IV 43.3, 5%
* Max Pain 235
* Percent of TSLA selling tagged to shorts: 56%
* Volume at 4pm closing cross: 3.3M shares

 

[Papafox]

TSLA chart above

QQQ chart above

I think we need to look at Friday's TSLA trading in the context of max pain and what the market makers wished to achieve for the week. Max pain was 232.50 Friday morning and 235 was a not-so-bad option for the option sellers which somewhat favored call buyers. Despite the Nasdaq running negative all day (QQQ chart was gorked by an after-hours spike) TSLA traded positively since shortly after market open. You can see that Nasdaq rose from 11am until the close at 1pm, but TSLA ran downhill during this time. Translation: option sellers didn't want to make too large of payouts on those 235 call options and so with low volume and a short trading day, pushing TSLA down to near 235 was a workable option. TSLA closed at 235.45.

My gut feeling is that TSLA might enjoy a good week ahead. It is the final few days until the cybertruck event on Thursday evening, and reports on TMC say that cybertruck has been well-received at its various showroom appearances. The list of showrooms with scheduled cybertruck appearances has grown to more than 20, and so we know that Tesla is leveraging cybertruck fever to sell other models. I expect the reveal to be quite enthusiastic. Can't wait.

Q4 has been hanging in there and looks on track to deliver the sought 476K vehicles to give Tesla that 1.8 million deliveries number for 2023. We haven't seen the feared price cuts so far.

Another aid to this coming week's stock price is the release of FSD ver 12 to some Tesla employees. Granted, we don't know the quality of the release yet and typically there are some reversions with a big step change, but the move to end-to-end neural net coding suggests the possibility of accelerated progress. We'll get a feel when some of the early beta-testing non-employees get ver12 and start reporting.

Meanwhile, Brighter with Herbert had a guest on who spoke of the 5 startup companies that Tesla is spawning. A likely agreement between x.ai and Tesla will be yet again another reminder to Wall Street that Tesla is much more than just a car company and heading for tens of trillions of dollars in profits, according to the video.

Another point to consider is that with retail investors owning about as much TSLA as institutional investors, the percent of institutional investor ownership of the stock is quite low compared to other high flyers. At some point, should TSLA become considered a "must own" stock the way that Apple and others have been, then there will be a need for lots of price appreciation as the institutional investors try to convince retail investors to sell them their shares.

Yields on 10 yr. treasury bonds closed the week at about 4.47%

Max pain Friday morning was 232.50. Looking at the open interest chart, you can see 230 was a definite put wall and 240 a definite call wall.

Friday's TSLA options volumes

I didn't put the red dot to designate likely target for market makers, but TSLA's 235is close pretty much nailed the option sellers goal during a typically highly-manipulated holiday week.

For this coming Friday, 230 is a neutral strike, 235 somewhat call-dominated, 240 is strongly call-dominated and 245 is the tall call wall that MMs want to protect against

Looking at the tech chart, notice that the lowest of the three gap-separated clumps had 10 trading days, the second had 8 trading days, and the 3rd and most recent has had 8 so far. Meanwhile, the upper bollinger band has risen to nearly 250.

For the week, TSLA closed at 235.45, up 0.95 from the previous Friday's 234.50. Hoping your weekend was spent with those who matter most to you.

Conditions:
* Dow up 117 (0.33%)
* NASDAQ down 15 (0.11%)
* SPY up 0 (0.06%)
* TSLA 235.45, up 1.24 (0.53%)
* TSLA volume 64.8M shares
* Oil 75.54
* IV 41.9, 2%
* Max Pain 232.50 for Nov24, 230 for Dec1
* Percent of TSLA selling tagged to shorts: 47%
* Volume at 4pm closing cross: 2.0M shares

 

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TSLA chart above

QQQ chart above

Monday began with about a minute of post-weekend exuberance buying followed by the Mandatory Morning Dip. Fortunately, the stock was pushed down less than $3 and recovered around noon. Notice the 238ish cap. The option sellers don't want TSLA to get too close to 240. If 240 is lost this week they'll double-down and protect 245. This is the week of the cybertruck reveal, however, and we could potentially see a runup into the event. There's no guarantee about the day after the event, no guarantee about Friday. Most of these reveals turn out to be sell the news events, but perhaps cybertruck will be amazing enough to pull off one of the stock-is-up next day maneuvers, such as we saw with the Model 3 reveal when investors saw the rate at which orders were coming in.

From a greater than 10 year perspective, there are gyrations indeed, but zoom out enough and TSLA looks to be a stock that trades horizontally for years at a time then does these massive runs higher. You can see the dip in early 2020 for covid and the more pronounced dip that ended in early 2023 when Elon's selling TSLA for taxes and to buy Twitter provided a negative catalyst for these gyrations. I believe that a major reason for the horizontal and slight decline periods is tied to the type of daily and weekly manipulations we see. TSLA is artificially held below what would be a more normal appreciation slope. When the evidence becomes too strong to counter, TSLA then makes a major upward run. Of course the counterpoint would be that 2013's gains were a result of Model S profitability and 2020's gains were Model 3's success. My contention is that the market should have been able to see what was coming better than this and start raising the price in anticipation.

A consequence of these long periods of stagnation is that institutional investors shy away from TSLA, being concerned about how the next quarter's gains will make their portfolio look. TSLA is a strange company in that retail investors own a similar portion of the company that institutional investors own. Usually, Once Tesla can provide sufficiently convincing evidence that major gains are to be realized in the quarters ahead, the stock price will run up again. Here's hoping that this time institutional investors see the need to own this stock going forward and their efforts to buy in would in itself provide much price appreciation.

Lots of news on Monday:
* TeslaBoomerMama Alexandra Merz appeared on Brighter with Herbert to give a rundown on the status of TSLA short-sellers. She focused on the number one short, a company named Sessa Capital that holds tons of puts. Interestingly, many of the shorts bought at the bottom of the 2022 dip and throughout the price rise in 2023. Let me say that even with short sellers falling by the wayside and a much smaller percent of open short interest than in the olden days, TSLA still is by far the biggest option play on Wall Street and though the type of bear attacks we used to see the shorts bring are no longer such a factor, the market makers and hedge funds selling the options bring a different manipulation to the table that still affects TSLA's ability to gain ground on a week to week basis.
* Tesla succeeded in getting a Swedish judge to allow the company to pick up license plates and thus continue to do business in Sweden. The chess game between the Swedish union and Tesla continues.
also helping Tesla:
* Elon was in Israel touring villages where attacks took place and discussing with Prime Minister Netanyahu how peace could be achieved again. See this Farzad Mesbahi video. I personally feel this was a smart move by Elon in that Netanyahu would not have given him the opportunity for this event if he perceived Elon as being antisemitic. Such a move helps neutralize the claims put forth by Elon's critics. Musk's controversies can have at least some effect on Tesla sales, and efforts to disprove the claims through actions are the most powerful antidote.

News was overall positive for TSLA.

Yields on 10 year treasury bonds fell to slightly below 4.4% on Monday.

Max pain Monday morning was 230. You can see that both the 230 strike and 235 strike are neutral with a slight lean towards calls. Now, check out the quantity of puts vs. calls for the week. Yep, calls rule. In fact, Monday's put to call ratio of .62 is quite a bit below the usual .75 or .80, showing that calls are unusually high this week as we approach Cybertruck Thursday. The buying of those calls result in market makers having to do TSLA delta-hedge buying, which in turn boosts the stock price.

Monday's TSLA options volumes

Look at how level TSLA has been trading (with excursions of course) for the past 10 sessions. This unusual characteristic in a volatile environment is, I believe, a result of option sellers manipulating enough to keep TSLA from breaking higher and messing up the weekly options profits for the sellers. Time will tell whether news this week will be strong enough to break through the capping. Notice, too, that TSLA closed just below the blue 50 day moving average. At the moment, the 50 DMA is working as resistance. Look at early September when it was doing the same. This level trading has resulted in the IV for TSLA hitting 0% on Monday.

Conditions:
* Dow down 57 (0.16%)
* NASDAQ down 10 (0.07%)
* SPY down 1 (0.18%)
* TSLA 236.08, up 0.63 (0.27%)
* TSLA volume 111.2M shares
* Oil 75.05
* IV 40.7, 0%
* Max Pain 230
* Percent of TSLA selling tagged to shorts: 53%
* Volume at 4pm closing cross: 3.3 M shares

 

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TSLA chart above

QQQ chart above

Congratulations longs, TSLA rose more than 5.5% between market and after-hours trading. TSLA truly entered beast mode a bit after 11am when it climbed quickly through 240 during a fury of buying. It plateaued around 242-243 until about 1pm, and I think the plateau was related to efforts keeping TSLA a safe distance below the mighty 245 call wall. At that time, despite macro weakness, TSLA zoomed up to 245-246. Whatever hope the MMs had of pushing TSLA below 245 for the close vanished when QQQ and Nasdaq did a big climb in the final half hour of market trading. In after-hours trading TSLA ran within 67 cents of hitting 250.

Looking a bit closer, TSLA's strength beginning at 10:36am was macro related, but the strong gains on strong volume that began at 11:16am were not. I'm wondering if that heavy buying was related to some big dogs on Wall Street getting tipped off about the story I mention below in news.

I would say the signs that TSLA was truly in beast mode included topping both 240 and 245 convincingly in the same day despite manipulative resistance. Strike 245 in particular was a massively high call wall. As I have said, a failed manipulation (such as capping) is a bullish sign. You may recall that I believed there was significant effort holding TSLA to 235 last week. The expected run up to the cybertruck event couldn't be contained and so a big day transpired on Tuesday.

We still have two days (Wednesday and most of Thursday) before the event. On Thursday morning the PCE report comes out, which would have some effect upon the market (but not as much as CPI). Don't be surprised if the MMs try a Mandatory Morning Dip on Wednesday to get TSLA back below 245. The problem with such an attempt when TSLA is in beast mode is that once any dip gets bought up, there's upward momentum that can take the stock higher. It'll be fun to watch. In the meantime, the MMs would really like to protect that call wall at 250.

News:
* According to this post by Sawyer Merritt, the Biden Administration is considering giving EV makers a temporary reprieve on subsidy rules that restrict full $7500 payments after 2023, based upon whether the battery materials come from an adversarial country. In other words, we could see some relief on the reduction to $3750 of the credit for those vehicles that contain LFP batteries and materials that originate in China. This change would have significant implications for Tesla's Q1 2024 performance.

Yields on 10 yr. treasury bonds fell to 4.28% on Tuesday. Fed governor Waller said that current monetary policy looks sufficiently restrictive to cool inflation to the desire 2% annual level.

Looking at 10 yr. treasury bond yields over a period of 30 days, we can see a strong descent from nearly 5% to below 4.3%. That's fast.

Short selling was tagged with 47% of TSLA selling on Tuesday. Personally, I think the option sellers (market makers and hedge funds) were doing more shorting than that 47% implies, likely through borrowing from non-FINRA exchanges. In past price spikes, we've seen spikes in percent of selling by shorts that exceeded 60% and pretty much coincided with the tops of the price spikes.

Max pain Tuesday morning was 230. That strike has now become call dominated, as are all the strikes of 240 and above. The 240 strike was no longer a very tall call wall, that honor was passed to the 245 and to a lesser extent the 250 strikes. Thus, once 240 fell the market makers set about protecting 245, and once it fell they shifted to 250. You can see the likely result of their efforts by the plateaus the price went through.

Tuesday's TSLA options volumes

Tuesday's climb busted through the resistance of 50 day moving average. The top of the upper bollinger band is at 252ish and TSLA has been able to climb above the upper BB for days at a time.

Conditions:
* Dow up 84 (0.24%)
* NASDAQ up 41 (0.29%)
* SPY up 0 (0.10%)
* TSLA 246.72, up 10.64 (4.51%)
* TSLA volume 147M shares
* Oil 76.57
* IV 40.7, 1%
* Max Pain 230
* Percent of TSLA selling tagged to shorts: 47%
* Volume at 4pm closing cross: 3.5M shares

 

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TSLA chart above

QQQ chart above

Hope your seatbelt is snug, my friends. Nobody said this week was going to be smooth. TSLA and QQQ both started market trading on a high note, which led to a common finale: both closing on a low note. Whereas percent of TSLA selling tagged to shorts was a "mere" 47% on Tuesday's big climb, it was a robust 57% on Wednesday, which suggests the option sellers were hard at work chipping away at TSLA's price. I suggested earlier that 235 last week was just too low for a lead-in to the cybertruck delivery event, the market agreed and bid the price up this week. A price of about 252 looks to be more of a top leading into the event, especially with the upper bollinger band hovering around 252. Quite a few porfolio managers don't like to buy above the upper bb. Once TSLA started down, added shorting by the market makers and hedge funds managed to get TSLA 86 cents below the 245 monster call wall. Coincidence? I think not. TSLA could go up or down after the event, depending upon excitement for the product, price, range, and comments from Elon.

The big controversy Wednesday evening is about the comments Elon made in an interview regarding advertisers who pulled out of X.com. His message to those advertisers was a big "Go F___ Yourselves". I watched this Solving the Money Problem version, but there are multiple sources available. Looking at the controversy from a purely Tesla stock price vantage point, I actually see benefits to his approach. Make no mistake, this wasn't an impromptu rant, this was a thought out response to his enemies. Because of the F-bombs he dropped, the appearance is going to get lots of attention. That's actually good if the full interview is seen because in it he clarifies his position of not being anti-semitic but really being pro-semitic and goes on to explain why. After his recent experiences with Netanyahu in Israel, his comments have veracity. He talked about how advertisers who bailed from X.com were doing so to make their companies appear noble but the reality is just the opposite. By explaining what these advertisers are doing, Elon is indirectly suggesting that people consider boycotting the companies doing the X.com advertiser boycott. This is a big deal.

Now, let me tell you how Elon's F-bombs applies to the cybertruck reveal and to Tesla in general. Elon came across (to me) as stating these things because of his values. It was a ballsy thing to do. Pickup truck drivers have a high frequency of being male, and there's an abundance of truck buyers in conservative states. After Elon's performance Wednesday, few are going to be afraid of buying a cybertruck because of the EV stigma in certain circles, particularly with the GOP taking a negative approacch to EVs in the coming election cycle. Rather, Elon's cybertruck is going to be associated with being brave, badass, and standing up for your values, characteristics that are embraced by much of the truck-buying public. I'm guessing the spirit of that message carries over to Thursday's event and to some extent, to future cybertruck and other Tesla sales.

I think the biggest negative of the talk might be added key-man risk associated with Elon calling out Hamas and the people who support them.

PCE inflation numbers will be released Thursday morning at 8:30am Eastern Time.

My understanding is that coverage of the cybertruck event begins at 1pm central time and the deliveries begin sometime after 2pm central. That will mean some of the event falls within trading hours.

Yields on 10 yr. treasury bonds continued their downward trend on Wednesday, closing at about 4.25%. The market is showing its belief that interest rates are at a peak and will begin coming down sometimes in 2024.

Max pain Wednesday morning was 235. That strike, along with 237.50 were put-dominated. Strikes 245 and 250 host the towering call walls.

Wednesday's TSLA options volumes

TSLA bounced off the upper bollinger band on Wednesday. In the main investors' forum, @Curt Renz spoke about the inverted head and shoulders that Craig Johnson sees forming. My guess is that the dip into early November is the head and the second shoulder should match the shoulder built in October. If so, Johnson suggests buying if the stockprice rises above the neckline.

Conditions:
* Dow up 13 (0.04%)
* NASDAQ down 23 (0.16%)
* SPY down 0 (0.07%)
* TSLA 244.14, down 2.58 (1.05%)
* TSLA volume 134.8M shares
* Oil 77.67
* IV 41.9, 2%
* Max Pain 235
* Percent of TSLA selling tagged to shorts: 57%
* Volume at 4pm closing cross: 2.8M shares

 

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TSLA chart above

QQQ chart above

Friday got off to an acceptable start for the markets when PCE inflation numbers came out right around expectations. Inflation rose 0.2% from the previous month and 3.5% from a year ago, according to CNBC. For reasons I don't totally understand, the Dow closed up 1.47% on the news and NASDAQ closed down 0.23%. TSLA didn't change prices significantly during the cybertruck event, and its loss of 1.66% for the day wasn't so bad when you consider Nvidia was down 2.85% and ARKK down 1.68%.

TSLA lost 2.07% in after hours trading. I don't know if that loss was legitimate selling by retail investors or a manipulative push by the remaining shorts. We'll find out on Friday.

In many regards, the cybertruck delivery event was much like the Model Y reveal back in March of 2019: purposely underwhelming. Model Y will be the top selling vehicle in the world during 2023, but you wouldn't know it from the Model Y reveal in which Elon revealed very little about the upcoming vehicle at the event. His behavior was likely an effort to avoid creating too much interest for a product that was still a couple years away. Better to not Osborne Model 3 and X sales in the meantime. And so here in 2023 we're in much the same position. Cybertruck won't be available in numbers during the next year that would exceed the current orders, and generating too much enthusiasm for Cybertruck right now would pull orders away from Tesla's other vehicles.

Elon did show a video of a Cybertruck beating a Porsche 911 in a race, while towing a trailer with another 911 aboard. A quick video showed Cybertruck out-towing a Ford F-350. What was missing was any mention of bi-directional charging where the Cybertruck could be used to power a home during an electrical failure. It exists but was not mentioned. No accessories were highlighted. I suggest viewing Rob Maurer's video here for news on the bidirectional charging and a brief look at Cybertruck accessories. Likewise, the excellent driving characteristics weren't highlighted, but you can view this video with Sandy Munro to get an enthusiastic description of driving the Cybertruck. With steer by wire, a range-extender battery you can likely rent that drops into the truck bed, and a 48V electrical system, this vehicle is going to be revolutionary.

Higher prices than expected ($60,990 for single-motor not available until 2025, below $80K for the two motor, and below $100K for the 3-motor) were probably the biggest disappointment. I suggest that prices will come down as production rates reach scale. The higher starting prices should also reduce the number of 3,Y,S,and X orders converted to Cybertruck. Also, as investors, we will see a quicker arrival at a positive gross margin for cybertruck than we would at a lower price point. Finding buyers won't be an issue for the next year.

Cybertruck looks like a compelling product, but Tesla is playing a game of "Let's not Osborne the rest of the fleet". Wall Street will likely be oblivious to what's really going on (as usual). Looks like sell the news, then. When the embargo on articles from those who actually experienced the truck come out (Friday morning?) we could see a shift in sentiment.

Yields on 10 yr. treasury bonds closed at 4.33% on Thursday

Max pain Thursday morning was 237.50. Strike 235 was put-dominated, 240 was call-dominated, and max pain fell somewhere in between. Right now, it looks like the market makers would like to see a close between 235 and 240 for Friday.

TSLA's options volumes on Thursday

The blue 50 day moving average is at 235.17. Let's hope for a close above that number on Friday so that we don't need to do the hard push through again on the way up.

Conditions:
* Dow up 520 (1.47%)
* NASDAQ down 32 (0.23%)
* SPY up 2 (0.39%)
* TSLA 240.08, down 4.06 (1.66%)
* TSLA volume 127.4M shares
* Oil 75.64
* IV 42.7, 5%
* Max Pain 237.50
* Percent of TSLA selling tagged to shorts: 54%
* Volume at 4pm closing cross: 6.1M shares

 

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TSLA chart above

QQQ chart above

Looks like the rave reviews for cybertruck did the trick and helped TSLA recover from a kneejerk sell the news reaction to the cybertruck delivery event. Notice how TSLA didn't penetrate the red/green line in early afternoon as the macros recovered. It doesn't take much effort by hedge funds and market makers to keep this stock down on a controversial day. Percent of selling tagged to TSLA shorts was a low 46% and volume at the 4pm minute was 2.7M shares.

Besides positive reviews, internet speculation is that Tesla is producing more cybertrucks than Wall Street might be aware of. Let's keep our ear to the railroad track on this one. Surely Tesla's decision to deliver the truck to real custormers (not just employees) suggests they're diving into the truck's production in a big way this time around.

For someone who hasn't already viewed the cybertruck reviews, I suggest starting with this video by David Lee because he gives a good summary of cybertruck's strengths and the top reviews out there. His favorite (and that of many) was this video by Hagerty which shows the cybertruck well and adds plenty of fun and humor. There's the Top Gear video that features in factory footage of Hans and Lars? explaining the features of the vehicle. Finally, this video by Marques Brownlee dives into the minute features of the truck. The Brownlee video has surpassed 11 million views as of Sunday night. The Haggerty and Top Gear videos are all in the millions of views as well. Too bad there's no interest in cybertruck. /s

So, here we are with not much more than 3 weeks left in Q4 and it looks like we're heading to a record quarter. The feared non-stop discounting has not transpired and from the factory tour reports it looks like Tesla is going to try surprising Wall Street with cybertruck ramp up speed. I'm bullish, particularly if Model 3 Highland goes on sale in early Q1. Amazingly, they're still moving the current Model 3. Fingers crossed the trend continues.

Yields on 10 yr. treasury bonds fell all the way down to 4.22% on Friday.

Max pain Friday morning was 240, a nearly neutral strike but somewhat call-dominated. Big call walls were at 245 and 250. TSLA's close at 238.82 hit the sweet spot for option sellers yet again. Truly an amazing coincidence how it happens week after week! /s

Friday's TSLA options volumes

Check out all the Fridays (heavy vertical line) in this chart. Notice how max pain and stock price have been coming together on Friday's. This is not by coincidence.

Max pain for the coming Friday is 240, same as last week. Strike 240 is somewhat call-dominated, but it's the pair of strikes 247.50 and 250 that are the tall call walls at the moment. TSLA could run to nearly 247.50 without huge market maker interventions.

On Friday TSLA descended to the mid bollinger band during the "sell the news" portion of the trading day before bouncing back the above 238 once the market started reacting to the excellent reviews of cybertruck.

For the week, TSLA closed at 238.82, up 3.37 from the previous Friday's 235.45. Hoping your weekend was a good one!

Conditions:
* Dow up 295 (0.82%)
* NASDAQ up 79 (0.55%)
* SPY up 3 (0.59%)
* TSLA 238.82, down 1.25 (0.52%)
* TSLA volume 121.3M shares
* Oil 74.65
* IV 42.0, 4%
* Max Pain 240 for both 12/1 and 12/8
* Percent of TSLA selling tagged to shorts: 46%
* Volume at 4pm closing cross: 2.7M shares

 

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TSLA chart above

QQQ chart above

On Monday we saw the now typical pre-market-open dip to define TSLA as a loser for the day. It's a new twist on the Mandatory Morning Dip theme. The pre-opening pushdown was needed because some big dogs bet that TSLA would see a sizeable dip after the cybertruck delivery event and Friday's trading suggested that maybe it wasn't going to happen.

Shortly after market open TSLA ran right up to the red/green line (despite the pre-opening pushdown), but was repelled. What followed next can best be described as a Category F5 tornado, straight out of Oklahoma, where TSLA dipped below 234 and then once again nearly recovered to the red/green line. You can see a couple more twisters (quick dips and quick recoveries) in the afternoon. Finally, with QQQ rising into close, and with no apparent bad TSLA news, the stock lost about $1.50 just like that. My friends, I hate to say it, but we've been hit once again by the same pick pocket.

All of these pushdowns (mostly unsuccessful) did indeed require shorting, and we saw the percent of TSLA selling tagged to shorts rise to 60% on Monday and volume at the 4pm hour rise to 4.2M shares.

So, the game is on to convince the market that investors are disappointed in the cybertruck and its delivery event. Sometimes gullible investors buy the story. The end of Q4 is just over three weeks away, though, and with TSLA on track to hit its 1.8M deliveries in 2023 the story will be harder to sell as we get closer to the end of December.

The video I learned most from on Monday was this Brighter with Herbert edition, featuring Jeff Lutz, who is well versed in auto manufacturing and supply chain dynamics. It's worth a look. Lutz had a chance to see GigaTexas's cybertruck line and can verify that the line is no Potemkin Village decorated with hand-built cybertrucks but rather a robot-intense production line that is gearing up to reach perhaps surprising volumes. He pointed out that at the moment cybertruck is slowed by some supply-chain issues, but they will of course be addressed. We already know that the speed at which Tesla gears up its 4680 cells will likely be the most important issue in the cybertruck's foreseeable future.

So, will the pirates prevail in this effort to color cybertruck's event as a disappointment? Stay tuned. Macro conditions will of course affect the results.

Percent of TSLA selling tagged to shorts ran up to 60% on Monday, suggesting major push-down manipulations

Yields on 10 yr treasury bonds closed at about 4.26%

Max pain Monday morning was 240, which shows somewhat call-dominated and giving market makers an incentive to shoot for a close below that number. The put to call ratio is a low 0.61 meaning that for every 100 call contracts expiring on Friday, there are only 61 put contracts. Normally you see a higher percent of puts, yielding something around 0.75.

Monday's TSLA options volumes

TSLA got pushed down artificially on Monday to close about $1 above the blue 50 day moving average. Someone placed bets that TSLA would go down after the cybertruck delivery event and they're disappointed that the stock price actually wants to rise.


Conditions:
* Dow down 41 (0.11%)
* NASDAQ down 120 (0.84%)
* SPY down 2 (0.52%)
* TSLA 235.58, down 3.25 (1.36%)
* TSLA volume 102.9M shares
* Oil 73.16
* IV 43.4, 8%
* Max Pain 240
* Percent of TSLA selling tagged to shorts: 60%
* Volume at 4pm closing cross: 4.2M shares

 

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TSLA chart above

QQQ chart above

On Tuesday we received a strong indication that TSLA's price lethargy on Monday was to a large extent a manufactured phenomenon and that the market actually wished to push TSLA higher, not lower. On Tuesday, when bulls took control of the stock shortly after market open, and instead of an anemic 103M shares traded on Monday TSLA volume jumped beyond average and hit 137M shares. The interns in charge of the whack-a-mole panels at the local market makers and hedge funds couldn't keep the buying from stirring more buying and around 10am there was a big jump higher with nearly a million shares traded in a single minute.

Alas, don't count the pirates out, and after TSLA ascended beyond 245 (strike for one enormous call wall) the pirates apparently pulled out all the stops and TSLA began a nearly linear march down to a couple bucks below 240. Check out how linear the descent was from about 11am until 2pm. On Tuesday the macros were jumpy but stronger macros on Wednesday could be the ticket for TSLA assaulting 245 yet again. Fingers crossed.

Since we saw quite a descent from the 11am-ish high, one technique the pirates might try on Wednesday is another similar pushdown from a morning high (if it happens). Traders would be less willing to hang on for the ride to losing most of the day's gains and the pushdown might be easier. OTOH, if TSLA heads lower and then bounces a bit Wednesday afternoon, traders might be inclined to jump in and ride the afternoon recovery (with Tuesday's experience in their minds). The more that jump in, the higher that recovery would be. Pure speculation, of course, but it's fun to speculate on the psychology involved.

I realize my commentary here might sound overly conspiratorial, but, seriously, how do you otherwise explain these massive departures from macro behavior when there's a lack of news and then every Friday at market close end up with a stock price very close to either max pain or the apparent best alternative price?

TSLA shorts were tagged with a robust 57% of TSLA selling on Tuesday, which was needed to bring the stock price back below 240 before market close. They may not be so successful on Wednesday.

Yields on 10 yr. treasury bonds fell all the way to 4.19% on Tuesday. The market is saying that inflation has turned the corner.

Max pain Tuesday morning dropped to 235 because of Monday's manipulation pressure. That left 240 as call-dominated and 245 as a really tall call wall. Naturally, the market makers exerted effort to bring TSLA below 240 on Tuesday. They may lose control again on Wednesday.

Tuesday's options volumes

Check out the current clump of TSLA candles. For the most part, they're following the 50 day moving average line and we see a pushdown any time the stock price rises too much above the 50 DMA. Hmm.

Conditions:
* Dow down 80 (0.22%)
* NASDAQ up 44 (0.31%)
* SPY down 0 (0.02%)
* TSLA 238.72, up 3.14 (1.34%)
* TSLA volume 136.7M shares
* Oil 73.16
* IV 43.8, 12%
* Max Pain 235
* Percent of TSLA selling tagged to shorts: 57%
* Volume at 4pm closing cross: 2.4M shares

 

[Papafox]

TSLA chart above

QQQ chart above

Wednesday's trading was wild and fascinating. Although QQQ faded right after market open, TSLA stayed strong. Take a look at 245. That's the line in the sand that the market makers didn't want TSLA to cross, and we saw lots of plateauing of TSLA in the first hour of trading as it approached this level. We saw a big TSLA dip as shorting was applied simultaneously with a Nasdaq dip between 10:14am and 10:26am. Alas, the dip ended and TSLA worked its way higher again. TSLA's big run started around 12:38pm and topped out above 246 at 12:42pm when no less than 1.12M shares traded hands in a single minute. I strongly suggest that the market makers and certain hedgies were shorting up a storm because TSLA entered a dip and kept going down until it leveled off about 243, which is a safe distance below the dreaded 245.

At this point, I figured that the pirates had pretty much given up on 240 and would be working to protect 245 for the remainder of the week, but alas the macros gave them a break: a big dip in the final hour into close. Nasdaq fell about 0.5% but through leveraging the shorting of TSLA, our stock was pushed down about 3 times that amount. The great thing for the Wall Street pirates is that a pushdown into close never has the ill effect of a bounce back up. The closing bell precludes such a bounce, and it's an excellent time for mischief. To illustrate the point, look at the leverage that the pirates received by reversing the very strong climb of TSLA at 12:42pm. That reversal served to changed the momentum and lead to a dip all the way down to 243.
Of course all this manipulation takes effort. Percent of selling tagged to shorts was a high 60% on Wednesday and no less than 5 million shares traded hands in the 4pm closing cross. The good news? TSLA closed up on Wednesday even with all the shorting and with the gift to the pirates of a big macro dip in the final hour of trading. Those entities trying to hold TSLA back may not be so lucky on Thursday and Friday. We'll see.

It's downward pressure time for TSLA, my friends. The good news: the pirates may not succeed. Plenty of big dog investors placed negative bets (selling calls, buying puts, shorting, etc.) in the days following the Q3 ER and prior to the cybertruck reveal. Back then, the bet was that Tesla would be lowering prices on its vehicles frequently in Q4 once again to move the inventory. Moreover, cybertruck was expected by some to be a bust as the truck is hard to build, as Elon admitted. Bets placed, but surprise, things haven't really gone that way. Vehicle price decreases have been minimal and we've even seen some price increases in China during Q4. Production and deliveries will be a new record in Q4. Cybertruck was well received, is already being built on a highly-automated production line in Austin, and rave reviews are in. The bet doesn't look so good any more and so the pirates do what they've done in such a situation before: cheat. Yep, they call their friends in the media to start dishing out the FUD while the various hedge funds, shorts, and market makers activate the sledge-o-matic to keep TSLA from climbing above a strike price with lots of call options expiring Friday (such as 245).

Here's another reason why some entities are putting pressure on TSLA right now. This chart shows the downtrend line which connects the highs of various local highs. You can see that since mid-July when TSLA was nearly 300, we've been experiencing lower highs. Check out the recent uptrend line from the three November trading clumps. TSLA has been experiencing higher lows. We're about to reach the end of the triangle and TSLA will exit either higher or lower. Someone would like to force a lower exit and toss cold water on stock price expectations for the near future.

Food for thought:
At present, supply chain issues are the biggest slowdown in cybertruck production. When you consider the complexity of getting tons of electrical accessories in 48 volt versions, it's a tall order. Consider how fortunate Tesla is to be doing the 48 volt development with a vehicle that will be relatively low volume over the next few quarters vs. crossing the 48 volt bridge with Gen 3.

News:
* According to Whole Mars Catalog on X.com, some Cybertruck buyers are being offered a chance to buy the Foundation Series Cybertruck for $120,000. Here's Drive Canada's take.
* West Texas oil prices dipped below $70/barrel on Wednesday. Oil prices are reflected in most other products because of the need to transport goods, heat buildings, etc.

Percent of TSLA selling tagged to shorts shot up to 60% on Wednesday. Someone REALLY doesn't want TSLA going up right now. You can see in the past that the high (60%ish) selling tagged to shorts occurred in the past when TSLA was approaching a local high. It's really strange to see shorting this intense when the stock price is not at a high and not climbing quickly. Note: the yellow line is the stock price and the top of the grey and blue areas is percent of selling tagged to shorts.

Yields on 10 yr. treasury bonds fell further, to 4.12%. Seems to me this would be a reason for the markets to rise.

Max pain Wednesday morning was again 240, a strike price which is call-dominated but not heavily so. Strike 245 continues to be the tall call wall that option sellers want to avoid crossing.

Wednesday's TSLA options volumes

Notice the huge wicks atop Tuesday's and Wednesday's candles. They give you an idea how far below daily highs the closing price turned out to be.

Conditions:
* Dow down 70(0.19%)
* NASDAQ down 83 (0.58%)
* SPY down 2 (0.40%)
* TSLA 239.37, up 0.65 (0.27%)
* TSLA volume 125.3M shares
* Oil 69.38
* IV 44.9, 19%
* Max Pain 240
* Percent of TSLA selling tagged to shorts: 61%
* Volume at 4pm closing cross: M shares: 5.0M shares

 

[Papafox]

TSLA chart above

QQQ chart above

On Thursday we had an opportunity to see most of the tricks in the book for controlling TSLA's price. Notice the dip in TSLA pre-market leading up to market open. Next came the Mandatory Morning Dip that far exceeded anything that the macros could justify. Once TSLA recovered from that manufactured dip it was off to the moon, or at least 244. From there we saw TSLA respond to a macro dip and then start a nearly linear march to below 240 (again!). Alas, QQQ and Nasdaq didn't waver from their strong gains of at least one and a third percent, and bottom line is that the capping game didn't work as TSLA rose into the close. The situation could have been different with a macro dip into close but it didn't happen. Bottom line: the pirates lacked the horsepower to keep TSLA below 240 on Thursday.

I'm expecting Friday to be another fight for MMs to hold TSLA below 245 at day's end. It's been a wild week so far as Q4 performance and cybertruck reveal enthusiasm cross swords with big Wall Street dogs who had been betting against TSLA for the week or, in the case of the market makers, just want to keep TSLA below the 240 and 245 call walls come Friday close with the QQQ and Nasdaq gains so high and consistent.

On Thursday, shorts were tagged with 63% of TSLA selling, continuing the trend of ratcheting up the shorting as the week progresses. Like I said on Wednesday, someone REALLY doesn't want TSLA climbing this week. Volume during the 4pm closing cross was 3.3M shares, which provided the day-shorting crowd with ample opportunities to cover.

Yields on 10 year treasury bonds closed near 4.15% on Thursday. Here is the one year chart to get a feel for how substantial the dip has been since mid October.

Max pain Thursday morning was once again 240. The amount of calls in excess of puts at strike 240 continues to dwindle and the market makers are now mostly focused on keeping TSLA from exceeding 245 on Friday.

Thursday's TSLA options volumes

For yet another day this week TSLA has threatened to rise above 245 but has closed lower.

Conditions:
* Dow up 63 (0.17%)
* NASDAQ up 193 (1.37%)
* SPY up 3 (0.76%)
* TSLA 242.64, up 3.27 (1.37%)
* TSLA volume 106.8M shares
* Oil 69.84
* IV 45.3, 20%
* Max Pain 240
* Percent of TSLA selling tagged to shorts: 63%
* Volume at 4pm closing cross: 3.3M shares