Papafox's Daily TSLA Trading Charts

[Papafox]

TSLA chart above

QQQ chart above

TSLA gained 2.23% on Tuesday versus a loss of 0.07% for Nasdaq. In many ways the day was the inverse of Monday's trading (only TSLA went down more on Monday than up on Tuesday and in both cases TSLA was trading contrary to the Nasdaq). With little earthshaking Tesla news out there, the idea that Monday's dip was related to China ETF selling sound just that much more credible.

Back when TSLA was at 210, the stock looked like it was turning the corner and ready to head higher when the Delaware judge's decision came in. That negativity managed to scuttle that recovery, but Tuesday's strong performance could be trying once again to define a bottom. No guarantees in this casino. Part of the problem with the current price action is that there's no simple calculation for TSLA's value. You have Morgan-Stanley's Adam Jonas giving the majority of TSLA's value to non-auto manufacturing future revenue sources while Dan Ives primarily keeps his price target focused on Tesla's auto business. It's an easy manipulation for the time being.

News:
* Teslarati says that Choice Hotels are adding Tesla universal wall connectors to their hotels. This move follows announcements of Hilton and Marriott also teaming up with Tesla. If you haven't stayed at a hotel with EV charging built in, you're missing a big jump forward in EV travel. You can often knock a supercharging stop off your trip if you charge overnight at your destination hotel.
* Tesla saw 10.6K insurance registrations during the week of January 29-Feb4. The delivery pace compares favorably to other recent quarters. Check out these Roland Pircher charts on X.com
* Drive Tesla says that Model Y performance just received a $4,300 price cut in Canada. That cut now makes the Y Performance eligible for government rebates. I suggest it's a reasonable cut because the rebates will leverage the effect of the cuts. Model Y performance in Canada just isn't a big portion of the total fleet and so it won't have much effect on the bottom line.

Yields on 10 year treasury bonds closed at 4.09% on Tuesday

Max pain Tuesday morning was 185. That puts it at a relatively tall call wall. Something a penny lower would be better for the market makers

TSLA's Tuesday options volumes

Volumes were once again elevated on Tuesday, but on a green day, which is a positive sign. On this long descent, we've hit a few possible bounce prices such as the 210 area and now today with a tall candle that ended at 185.10. Bargain hunters may be the buyers today

Conditions:
* Dow up 141 (0.37%)
* NASDAQ up 11 (0.07%)
* SPY up 1 (0.29%)
* TSLA 185.10, up 4.04 (2.23%)
* TSLA volume 122.2M shares
* Oil 73.59
* IV 42.4, 7%
* Max Pain 185
* Percent of TSLA selling tagged to shorts: 45%
* Volume at 4pm closing cross: 4.0M shares

 

[Papafox]

TSLA chart above

QQQ chart above

Wednesday was TSLA's second green day in a row. With a close at 187.58, TSLA is above the max pain of 185 and threatening to rise above tall call walls at 190, 192.50, and 195. For this reason, percent of selling by shorts rose from 45% to 50% on Wednesday, showing that the option sellers are getting more serious about dampening this climb. A robust 4.6M shares traded during the 4pm closing cross supports this contention.

That said, let's take a look at Wednesday's trading. We saw a big Mandatory Morning Dip pull TSLA from about 190 in pre-market trading down to below 183. That dip bottomed at 10:06am. It was QQQ's big run higher, starting at 10:04am, that threw a wrench into the MMD. I'd say the effort with the MMD and then capping around 187 was partly successful because TSLA gained less than $2.50 for the day. Around 1pm the cap on TSLA fell apart because of macro strength and TSLA rose to now play with 189. Alas, in the final 20 minutes of market trading we saw the pick-pockets pull TSLA down about $1.50 for the close. Manipulators like to do their pushdown close to market trading end because if they lose control of the pushdown the stock will likely rally into close. With only 20 minutes to work, the success of the endeavor is more likely, as we saw today.

Over in the main TMC investor forum, there was discussion about the profitability of TSLA shorting. Keep in mind there are two distinct types of shorting: HODL shorting and day-shorting. The HODL shorts are the ones who "know" that Tesla is just a big fraud and is bound to fall heavily at some point. These types of shorts routinely lose billions each year (with 2022 as an exception). OTOH, the day shorters usually are big dogs who are protecting options they have sold. Granted, option sellers typically hedge their sales, but I believe that since TSLA is so volatile a good many hedge funds and market makers can't help themselves and will do some day shorting to get a better return come Friday.

I call these types day-shorters because it appears that most cover their shorts either in the 4pm closing cross or beforehand. I would guess that these types make lots of money with their options selling and that the manipulations they perform on many occasions are profitable as well. For example, if you short tons of shares right at market open, get the stock prices falling, and it falls even lower as frightened investors and algos join the selling, this is likely to be a profitable manipulation in its own right as well as helping the option seller's take on Friday afternoon. It's all about sell high, buy (cover) low. While the HODL type shorts have diminished from about 30% of TSLA's float to about 3% over the years, the day-shorting manipulations continue without being diminished.

Sometimes a manipulation is double-profitable when the manipulation makes money between the shorting and the covering, and also by helping the stock price to close closer to max pain on Friday afternoon. In other instances the day-shorting loses money in itself but has a positive effect upon profitability come Friday afternoon. Such was the case on Wednesday, I believe. Those shares shorted when TSLA was near 190 likely were profitable when they were covered later on Wednesday, but those shares shorted near 183 would be losers. Overall, I suggest that when the macros climbed and didn't allow TSLA to be pulled low enough for profitable covering of the shorting, the pirates likely covered at 4pm and took a loss. I don't have a violin small enough to play in sympathy for those scalawags.

The big question is whether the option sellers will succeed in pulling TSLA lower on Thursday and Friday or whether the momentum of TSLA's climb continues. Volume of 111M shares is a positive sign but growing volume as TSLA climbs would be an even better sign. As usual, we'll have front row seats to watch the action.

News:
* Big news for Wednesday was this Bloomberg article that said Tesla was querying managers to find out which employees were critical. Such an action often means that Tesla is preparing to lighten the load by laying off employees they could get by without. Wall Street generally looks positively upon such cutting of workforce because it makes the company more efficient. The other side of the blade, however, would be worries there is some type of negative development that is causing Elon to be worried.
* Alex Voigt in this post relays that GigaBerlin will have sufficient supply chain inflows to reopen on Monday, Feb 12.

Percent of selling tagged to shorts rose to 50% on Wednesday as TSLA market makers are ramping up the resistance to TSLA rising above max pain

Yields on 10 year treasury bonds remained about level at 4.09%

Max pain Wednesday morning was 185, right at the first of 4 tall call walls. The next is at 190, followed closely by 192.50 and 195. The market makers obviously don't want the stock going higher for the rest of the week. The positive surprise? Volumes are up, which suggests more serious buying is underway.

Wednesday's options volumes

Wednesday was up day two in a row. After this long fall from 260 I'll take it. Market makers want us to trade sideways but buyers have been ready to push higher.

Conditions:
* Dow up 156 (0.40%)
* NASDAQ up 148 (0.95%)
* SPY up 4 (0.83%)
* TSLA 187.58, up 2.48 (1.34%)
* TSLA volume 111.1 M shares
* Oil 74.13
* IV 41.2, 4%
* Max Pain 185
* Percent of TSLA selling tagged to shorts: 50%
* Volume at 4pm closing cross: 4.6M shares

 

[Papafox]

TSLA chart above

QQQ chart above

Time-constrained report- little research
TSLA managed it's third up day in a row on Thursday as it gained more than 1%, compared to Nasdaq's meager 0.24% gain. A minor dip in the macros allowed the pirates to pull off a moderate Mandatory Morning Dip shortly after market open, but buyers were standing by to take advantage of the dip and it was short lived.

As usual, we saw apparent capping to keep TSLA from climbing above additional call walls and of course we saw TSLA trading lower in the afternoon. Relatively low volume was 87M shares. I suggest that if volume is this low on Friday the market makers will take charge of the stock price in the afternoon. We'll see.

Yields on 10 year treasury bonds climbed to 4.17% on Thursday

Max pain Thursday morning was again 185. TSLA in early afternoon climbed above the 190 tallest call wall and threatened 192.50.

Thursday's TSLA options volumes

The recovery from the dip below 180 continues but volume dropped on Thursday to 82.7M shares, which could be a problem if volume stays on the low side come Friday (due to easier pushdown manipulation).

Conditions:
* Dow up 49 (0.13%)
* NASDAQ up 37 (0.24%)
* SPY up 0 (0.04%)
* TSLA 189.56 (1.06%)
* TSLA volume 82.7M shares
* Oil 76.27
* IV 41.7, 5%
* Max Pain 185
* Percent of TSLA selling tagged to shorts: 45%
* Volume at 4pm closing cross: 2.6M shares

 

[Papafox]

TSLA chart above

QQQ chart above

Friday was surprisingly strong for TSLA, which gained 2.12% vs. the Nasdaq's rise of 1.25%. Given TSLA's beta, that's not surprising, but given typical end of week price action when TSLA is above max pain, that's VERY surprising. I pondered why and believe I figured out the reason.

In future weeks, the max pain numbers are a hodgepodge, ranging from 185 to 200. For this coming week, the number is 195. We did see a Friday morning pushdown from about 194 to 191, but my guess is that the selling (whether by option sellers or perhaps traders anticipating the usual Friday afternoon manipulation) reversed around noon simply because the Nasdaq was showing so much consistent strength that day. As TSLA rose, the market makers didn't put the usual level of resistance into the climb. Their plan was likely to keep TSLA below 192.50 so that only the 190 calls were an issue, but near market close we saw a big jump higher to 193.57. My best guess is the jump was a way to match buyers and sellers for the closing cross. Too many day-shorting contracts had to be covered by buying, and the stock price had to rise substantially to bring closing cross buyers and sellers into equilibrium. Note that at 193.57, the vast majority of the day-shorting to sink TSLA was unprofitable when covered at that price.

Nonetheless, a price of 193.57 sets TSLA up well for a 195 max pain this coming Friday. It was the following week's higher max pain that caused the lack of serious manipulations on Thursday and Friday, just as we saw three weeks of TSLA price plummet in order to align the price within about $2 of the January 19 big yearly options expiration. Rest assured I will be looking several weeks ahead in the future to see what bias we might expect with the stock price as the pirates scheme to maximize their profits.

So, this week was indeed a rare opportunity to see what TSLA can do in a recovery if the manipulations are throttled back.

One youtube video I particularly enjoyed was this Brighter with Herbert segment with James InvestAnswers. James is an intelligent investor who has done very well with TSLA. He is bullish on the stock because of all the multiple additional businesses that are being spawned from the company. I believe he has counted 13 products so far and his thesis is that it's only time before Wall Street recognizes the value of these upcoming additions to Tesla's profitability. This has been my thesis as well and one of the reasons why I am so exited about FSD V12.

News:
* Sawyer Merritt pointed out that Tesla is dropping the price of two Model Y variants by $1000 between now and the end of February, when the price should rise by $1000. TMC investors are speculating that the motive may be to take advantage of any short-term benefits from Super Bowl advertising.

Percent of selling tagged to shorts drifted slightly higher on Friday to 47% but still remained unusually low for a Friday with stock price well above max pain.

On Friday, yields on 10 yr. treasury bonds rose slightly to 4.18%

To balance the rising treasury bonds yields, I present the truflation.com inflation estimate for the U.S., currently way down at 1.36%. Keep in mind that the PPI numbers for a year came in at 1%. It's the CPI that is spooking investors and spurring on Fed members, but truflation suggests that the CPI is likely using methods that artificially overstate the inflation rate after a big surge then fall.

Max pain Friday morning was 185. That strike price used to be highly call-dominated

Friday's TSLA options volumes

Whereas last week was one where TSLA's stock price finally went up a bit, this week was both a stock price rise and a strong divergence from the max pain line. That's a powerful combination and can probably best be explained by what's coming next week, so let's move down to the next chart.

Max pain for this coming Friday is way up there at 195. Part of the reason it's so high is we have lots of high strike puts. Just look at that accumulation at 210, for example. Market makers want the closing price on Friday to be near 195 or near the price where max pain migrates as the week goes on. This past week's stock price increase feeds into the market makers' need for the stock price to rise going into the coming week.

The chart above is what a recovery from the Delaware judgement fiasco should look like without heavy-handed manipulations. I think the reason we get to see it is that market makers and other options sellers were motivated to behave themselves somewhat so that the stock price could rise high enough to flirt with the new week's max pain of 195. Note the low volumes on Thursday and Friday, which equates to easy pickings for the manipulators if they desired.

Conditions:
* Dow down 55 (0.14%)
* NASDAQ up 197 (1.25%)
* SPY up 3 (0.58%)
* TSLA 193.57, up 4.01 (2.12%)
* TSLA volume 84M shares
* Oil 76.84
* IV 40.9, 3%
* Max Pain 185 on Feb9, 195 on Feb16
* Percent of TSLA selling tagged to shorts: 47%
* Volume at 4pm closing cross: 3.2M shares

 

[Papafox]

TSLA chart above

QQQ chart above

Monday was fine until about 10:30am when someone turned on the selling. It could have been a market maker, it could have been a big dog investment company. The tornado-shaped dip that bottomed out slightly past noon looks more like a manipulative dip than a big-dog-selling dip. Notice that QQQ didn't start its big dip until 1pm. That macro dip derailed the recovery TSLA was making from the dip that bottomed near noon.

These days most of us are focused on a longer time horizon, when TSLA stock rises as Wall Street starts realizing the strength of Tesla's technical lead on automotive competitors and we see additional profits (FSD, Optimus, Tesla Energy, etc.) bearing fruit. To understand just how far advanced Tesla's manufacturing and products are compared to the competition, I suggest watching this episode of Brighter with Herbert, featuring Sandy Munro.

Yields on 10 yr, treasury bonds remained level around 4.18% on Monday

Max pain Monday morning was 195. You can see that with very tall call walls at 195 and 200, the market makers really don't want to see TSLA rise substantially above 195 this week.

Monday's TSLA options volumes

What I'm watching for these days are price movements that are related to max pain numbers in weeks beyond the current one. For example, as we entered January, max pain for the big annual options expiration on Jan 19 was 216.67. It seemed rather unlikely that TSLA would drop that much in three weeks, but it actually lost even more, descending from the 260s to below 215. Last week, TSLA closed well above that Friday's $185 max pain. It turns out that this Friday's max pain is 195, and so the price was very complimentary to reaching 195. Why then the selling on Monday? Remember that Mondays are great opportunities to steer the options for the week. Max pain could descend to 190 by Friday and stock price could rise to 190 for a good match.

Sometimes the market makers may throw a curve ball to break up a nice V-shaped recovery. Who knows?

Conditions:
* Dow up 126 (0.33%)
* NASDAQ down 48 (0.30%)
* SPY down 0 (0.04%)
* TSLA 188.13, down 5.44 (2.81%)
* TSLA volume 94.9M shares
* Oil 76.84
* IV 42.1, 7%
* Max Pain 195
* Percent of TSLA selling tagged to shorts: 49%
* Volume at 4pm closing cross: 3.7M shares

 

[Papafox]

TSLA chart above

QQQ chart above

You can see the big dip in both TSLA and QQQ an hour before market open when the CPI numbers came out 0.1% hotter than anticipated. Sheesh, it looks like an overreaction to me. Glance down at the Treasury yields chart below and you'll see a big jump to 4.33%. CPI is now 3.4% above the previous year. In contrast, Truflation.com's daily inflation number is 1.39%. In other words, the government says 3.4% and Truflation says 1.4%. I'm more inclined to side with truflation because the U.S. CPI is using criteria that even Darth Powell admits is dated.

The good news? TSLA's dip of 2.18% was not substantially higher than the Nasdaq dip of 1.8%.

In this most recent CPI, the biggest culprit was once again shelter, as mentioned in this CNBC story. Shelter climbed 0.6% for the month, accounting for two-thirds of the total increase. Here's the problem though. When you crank interest rates up at never before seen pace, people stop building homes. Those people who would have built homes rent something instead until rates come down. The problem with an increase in demand for rental homes and a decrease in supply is that the only way you keep the two in equilibrium is for rental prices to increase. It's ironic that if shelter is the primary reason for keeping rates high, that act of keeping rates high is putting pressure on rental housing to become even more expensive going forward. We truly live in a bizarro world when it comes to Fed decisions.

The good news is that annual producer price index (PPI) has risen only 1% in the last 12 months. The next PPI numbers come out this Friday before market open. Fingers cross that we see no surprises.

Overall, Tesla vehicle pricing news has been ok so far this quarter. We did see a three week $1000 discount for Model Y in February, but in theory it's going away in March. Recently we've heard about Model Y price increases of about $2500 in Germany and Norway. The gross margins boogey man has been kept at bay so far, despite no guidance by Elon for 2024. Edit: Now I see Model 3 LR price in the U.S. has just be raised by $500.

The market is impatient at present to get a feel for what the Tesla board has in mind for Elon's compensation, now that the Delaware judge has scuttled the last agreement. Mr. Market likes clarity, and we're just going to have to wait for the announcement while the market remains annoyed.

Percent of selling tagged to shorts: 50%
Note: I've been using chartexchange for my data and charts but they stopped producing today. I figured the number above with raw data from FINRA's site. If anyone has a suggested alternative to chartexchange.com for shorting information, please send me a PM.

Yields on 10 yr. treasury bonds zoomed up to 4.33% on Tuesday when the CPI numbers came in warmer than expected

Max pain Tuesday morning remained at 195. There's still lots of puts above that 195 number, and so the max pain is not changing as quickly as you would otherwise see. Look at how how the 200-strike call wall is now. It was below 50K contracts high on Monday and now exceeds 70K contracts. The 195 calls have also risen substantially. Bottom line: if investors are buying calls at these strikes, the market makers will be just that much more inclined to keep those numbers out of the money on Friday's close.

Tuesday's TSLA options volumes

With TSLA price at least temporarily in the doldrums you can see that upper bollinger band coming down to get closer to the mid.

Conditions:
* Dow down 525 (1.35%)
* NASDAQ down 287 (1.80%)
* SPY down 7 (1.38%)
* TSLA 184.02, down 4.11 (2.18%)
* TSLA volume 86.4M shares
* Oil 77.59
* IV 43.0, 12%
* Max Pain 195
* Percent of TSLA selling tagged to shorts: 50%
* Volume at 4pm closing cross: 5.0M shares

 

[Papafox]

TSLA chart above

QQQ chart above

TSLA got off to a rocky start on Wednesday with a pair of Mandatory Morning Dips, but as the day progressed and QQQ and Nasdaq recovered from their Tuesday overreaction to the CPI data, TSLA started some serious climbing. For the day, TSLA ended up 2.55%, compared to Nasdaq's gain of 1.30%.

The market reacted positively to a Bloomberg article Wednesday that was brought to Bloomberg's attention by the plaintiff attorneys. In a nutshell, Tesla and the plaintiffs are negotiating to see if they can agree upon an amount for attorneys fees that would be put money aside in an appeal bond so that the plaintiffs know they will get paid should the appeal fail. If a bond amount can be agreed upon, then the two sides would agree to a stay of the judge's decision. The market is treating this news positively since the plaintiffs are clearly showing a willingness to negotiate with Tesla. This is all about the money, and Tesla investors are hoping for a settlement which would limit Tesla's liability.

Right after market close we saw a big jump in the stock price, followed by a dip and then a very slow recovery. That jump was almost certainly related to filings which showed that Elon's shares and pending options are basically unchanged at the end of 2023 compared to the year before. I think the combination of the earlier news plus the Elon's holdings news shows:
1) that Elon and the board are working together on the compensation issue while they appeal the Delaware judge's ruling
2) plaintiff attorneys are willing to negotiate an attorney's fee,
3) Elon's shares and options being unchanged suggests expectations that he will receive his options in the future, and
4) the reason we've heard nothing from the Tesla board is that they are in negotiations with the plaintiff law firm and it's inappropriate to issue press releases.

The implications are that there's a chance to wrap up Elon's pay issue in a timely fashion. That solution would give a boost to TSLA stock price and we're seeing some anticipation of that boost in after hours trading. OTOH, the naming of some ungodly amount as a proposed payment amount would have a negative effect upon the stock price. Lawyers have a tendency to start with the worst possible solution and negotiate from there.
Please note that the filing talks about options that can be exercised within 60 days of December 31 (not options that MUST be exercised within 60 days of Dec 31). This is the same language used in the previous year.

chartexchange has now come back online, so no need for me to manually figure percent of selling by shorts today. Looking at the chart, Notice the heavy shorting activity that began in early December. Now take a look at Jan 19 on the chart (just to the right of the 1/17 date mark at bottom). The heavy shorting activity pretty much ended after Jan19, the expiration date of the big annual options. Any question on motive? That the stock price managed to drop from the 260s to below 216.67 during that shorting assault was no coincidence. The moderate resurgence of shorting after the Jan 24 4Q23 ER had a separate catalyst and objective.

Yields on 10 yr. treasury bonds cooled a bit to 4.23% after Tuesday's big jump

Max pain Wednesday morning dipped to 190, which is exactly what was to be expected with a big pushdown early in the week. As you can see, 195 and 200 are tall call walls, so the market makers will be putting up resistance should TSLA attempt to breach 195. They'll redouble their efforts if 200 is threatened. OTOH, strikes 185 and below are strongly put-dominated and so the MMs really want to keep TSLA within the 185-195 range through Friday's close. Keep in mind that max pain next week is also 190, so if TSLA can be kept close to this week's max pain, next week's will be just that much easier.

Wednesday's TSLA options volumes

Monday and Tuesday's dips really gorked the clean up side of a V-shaped recovery, which might be just what the option sellers wanted.

Conditions:
* Dow up 152 (0.40%)
* NASDAQ up 204 (1.30%)
* SPY up 4 (0.91%)
* TSLA 188.71, up 4.69 (2.55%)
* TSLA volume 79.1M shares
* Oil 76.26
* IV 41.7, 5%
* Max Pain 190 (note: now matched 190 of the following week)
* Percent of TSLA selling tagged to shorts: 47%
* Volume at 4pm closing cross: 4.8M shares

 

[Papafox]

TSLA up more than 7% in market and after hours trading, anyone?

TSLA chart above

QQQ chart above

So, the market's enthusiasm continued over Wednesday's news (negotiations underway with Delaware judgement attorneys plus Elon's stock and options number). TSLA closed up 6.22% compared to Nasdaq's 0.30% gain. In many ways the good news is being exaggerated (assuming Elon ends up with 20.4% of TSLA ownership, suggesting he needs less than 5% of company voting rights in his next comp package to satisfy him). The reality is likely watered down from this number because we assume he will sell some of the 2018 option awards after exercising in order to pay taxes. Nonetheless, the news was good enough to get a rally going and with TSLA selling at less than $200/share it was a time for some shorts to be jumping ship and for some fence-sitters to be jumping on board.

Comparing the two charts above, there were plenty of morning opportunities for the macros to give a weakness signal that could be exploited through short-selling, but we may not have seen that selling. I say may not have seen because the 42% selling tagged to shorts number is extremely low, but the 6 million shares traded during the 4pm closing cross is extremely high. We may just be witnessing a shift to non-FINRA exchanges for short borrowing to hide the manipulations. Such might have been the case last week as well.

What we do know is that market makers don't like the stock price running above tall call walls and the shorting to halt the climb is well hidden if it exists. I suppose Friday will give us a clue, especially if TSLA is pulled back under 200. If not, then perhaps the buying pressure is just too high to halt and TSLA could rise further. If TSLA climbs higher, it is an advertisement for staying in the stock over time because you never know when it is going to take off.

On Friday before market open, the PPI numbers could move sentiment in a positive or negative direction. Usually, the PPI sways the market much less than the CPI number does.

News:
* On x.com, TSLA Chan made this post about LG going to make 4680 battery cells for Tesla in Korea later in the year. Should the source of the raw materials be sufficiently non-China to satisfy IRA, the addition of these cells into Tesla's fleet could help with IRA credits. Tesla already has produced a 4680 verison of of Model Y. If some 4680 cells are used in Model Y again, then 2160s could be shifted over to Model 3 and the IRA credits could be recaptured. Perhaps Cybertruck is the planned destination for some of those 4680s.

Yields on 10 year treasury bonds leveled off around 4.24% on Thursday

Max pain Thursday morning was 190 and the stock price climbed above 202 in after hours trading. Will the market makers pull TSLA back below 200 on Friday or have they lost their touch? A close above 202 on Friday would show a failed manipulation and suggest further climb.

Thursday's TSLA options volumes

I find the volume of nearly 120M shares when coupled with the very tall white candle as being very encouraging. I also feel cautious toward such a big rise resulting from such a weak catalyst. OTOH, we've seen big drops on less substantial negative catalysts. The next couple of trading days will tell us.

Conditions:
* Dow up 349 (0.91%)
* NASDAQ up 47 (0.30%)
* SPY up 3 (0.69%)
* TSLA 200.45, up 11.74 (6.22%)
* TSLA volume 119.2M shares
* Oil 78.12
* IV 44.3, 21%
* Max Pain 190 (same next week)
* Percent of TSLA selling tagged to shorts: 42%
* Volume at 4pm closing cross: 6.0M shares

 

[Papafox]

TSLA chart above

QQQ chart above

Dr. Papafox here. I've checked the patient's vital signs and I can confirm the TSLA rally is most likely still alive. Here's my research.

We entered pre-market trading on Friday on a high note. Price 204 was exceeded before 8:30am, when the PPI inflation report came out hot. Here's CNBC's take. The soothsayers were expecting a 0.1% increase in January and PPI instead went up 0.3%. Given that December was actually negative inflation for the PPI, I'm not losing sleep over one warm month. Both QQQ and TSLA stayed green in pre-market, but the big dogs didn't like the PPI backing up the CPI's suggestion of persistent inflation and QQQ went red shortly after market open and stayed there for the remainder of the day.

TSLA was a different matter. It fluctuated below and above the red/green line all day. Despite dips in the morning it came back and eclipsed 202 before being pushed back down again. As the final hour of market trading approached, QQQ did a near vertical cliff dive but TSLA hardly flinched. At day's end TSLA closed at 199.95, just a nickel below the massive 65K contract 200-strike call wall. Just coincidence once again. /s

Overall, I'd say that TSLA showed strength on a down day for the macros and a discouraging day for those businesses that benefit most from lower interest rates (such as Tesla). Monday is a holiday and so I'm looking forward to seeing what transpires on Tuesday. Although the market makers succeeded in getting TSLA below 200 for the Friday close, they had lots of reason why they'd prefer to see TSLA close below 195 and they couldn't do it. Part of the reason was 110M shares volume, which makes manipulations more difficult. I'll say the MMs succeeded in getting a dip below 200 but not 195, thus a partial manipulation fail (which I consider bullish).

We are now halfway through Q1 (typically the slowest quarter of the year) and Tesla hasn't been slashing prices. China automotive sales overall are seeing price dips, but elsewhere we have seen Tesla pretty much holding the line (or even raising some prices). FSD, Optimus, Dojo, Energy, Gen 2, and a whole lot more is going on behind the scenes. Tick, tick, tick.

Percent of selling tagged to shorts was 48% on Friday, up from Thursday because those market makers didn't want to pay those 200 strike calls.

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

Despite all the concern about the CPI and PPI numbers this past week, Truflation.com thinks U.S. inflation is about 1.71% at the moment

Max pain Friday morning was 195. That's one tall call wall (and 200 is even taller) but the option sellers couldn't hold TSLA below 195 this week.

Friday's TSLA options volumes

For this coming Friday, Feb 23, strike 200 is the tall call wall with 210 in second place. Should TSLA head in the other direction, puts become dominant below 190.

Considering the height of Thursday's white candle, Friday's dip is inconsequential.

For the week, TSLA closed at 199.95, up 6.38 from the previous Friday's 193.57. It's been a good week, my friends. Be sure to enjoy the weekend with those who matter to you.

Conditions:
* Dow down 145 (0.37%)
* NASDAQ down 131(0.82%)
* SPY down 3 (0.50%)
* TSLA 199.95, down 0.50 (0.25%)
* TSLA volume 110.5M shares
* Oil 79.19
* IV 44.9, 27%
* Max Pain 195 for Feb16, 192.50 for Feb23
* Percent of TSLA selling tagged to shorts: 48%
* Volume at 4pm closing cross: 3.9M shares

 

[Papafox]

TSLA chart above

QQQ chart above
Welcome back to our manic-depressive stock. As we ended last week, TSLA outperformed NASDAQ. It exhibited the mojo of a stock that still had more climb left in it. Come Monday, both the broader markets and TSLA were down, but TSLA ended the day down more than 3X the Nasdaq. Although our stock in the market has so many forces working on it to accurately say "this was definitely the cause..." we can still make our best guesses.

My guess is that the NASDAQ trading lower for the second session in a row put a bit of worry in TSLA traders and that worry made it easy for option selling pirates to do a little "fine tuning" with TSLA. Max pain on TSLA had dipped to 190 on Tuesday morning. No high put walls could be seen for as far as you looked, but the 200 strike call wall was a monster at over 65K contracts high. Naturally, the market makers do not want to see TSLA closing above 200 this week and so a little "insurance" was needed. Remember that Mondays and Tuesdays are the best days for big stock price changes in the eyes of the market makers since the remainder of the week allows opportunity for the options market to rejigger itself closer to the new stock price.

Were manipulations involved on Tuesday's trading? Percent of selling tagged to shorts was only 48% but trading during the 4pm closing cross was a hefty 5.4M shares. With that enormous 4pm trade, I suggest we saw lots of day-shorting being covered at day's end. Obviously, they shorted a good portion of their shares from exchanges not reporting to FINRA. After the big 10:30ish dip, both TSLA and QQQ, rose, but TSLA quite a bit less than QQQ. Again, this is a typical maneuver when trying to keep TSLA down.

One issue perhaps affecting TSLA is the Nvidia earnings call, scheduled for Wednesday after market close. Strong guidance could light the afterburners of not only Nvidia but also all AI stocks (including TSLA) and cautious guidance would have the opposite effect. Nvidia closed down over 4% on Tuesday as traders took some money off the table, just in case, and TSLA could have felt some of that pull-down as well or perhaps the market makers are simply taking no chances on a good Nvidia earnings call Wednesday afternoon and giving TSLA plenty of room between it's current price and 200.

Perhaps TSLA Q1 worries were an issue to the day's performance. Model 3 Highland ramp has been unexpectedly slow so far, as has the Cybertruck ramp at times. Both could sprint ahead at any moment, but neither has done so yet. OTOH, Tesla as a powerhouse company continues to innovate out of sight of the cameras. We've seen many youtube and x.com videos in the past day about FSD V 12.2.1 which is going to a small number of regular users now. So far the results are very exciting and I suspect that as V12 matures, we'll see its effect upon FSD take rate.

May I just say that volatility is good for options sales and options sales (but puts and calls) are good for the market makers. Sometimes we see a surprise (such as Tuesday) and these surprises work well to trip up the speculators who are trying to anticipate what comes next for TSLA. Remember that this whole rally began on rather shaky ground with an unusual amount of constraint shown on Thursday and Friday by the market makers. That they put the hammer down on Monday shouldn't be all that great a surprise to us.

News:
* Elon Musk nominated for Nobel Peace Prize

On Tuesday, 48% of TSLA selling was tagged to shorts

Yields on 10 yr. treasury bonds closed around 4.29% on Tuesday

Max pain dipped to 190 on Tuesday morning. This is such a strange open interest (max pain) chart because it is all about 200 strike calls. Any guess what the market makers will do for a strategy this week?

TSLA's Tuesday options volumes

I forgot to insert this max pain vs. closing price chart in the weekend post, and so I place it here now. Notice how uncharacteristic it is for closing price to substantially exceed maximum pain on Fridays (heavy line). Chart courtesy of @JimS

Volumes have been decreasing since Thursday's big up day.

Conditions:
* Dow down 64 (0.17%)
* NASDAQ down 145 (0.92%)
* SPY down 3 (0.55%)
* TSLA 193.76, down 6.19 (3.10%)
* TSLA volume 103.8M shares
* Oil 78.18
* IV 44.4, 22%
* Max Pain 190
* Percent of TSLA selling tagged to shorts: 48%
* Volume at 4pm closing cross: 5.4M shares

 

[Papafox]

TSLA chart above

QQQ chart above

On Wednesday QQQ was in worry mode, sweating out Nvidia's ER after market close. Nasdaq closed down 0.32% and was down three times that much an hour before market close. Meanwhile, TSLA made a break upwards right after open. It got within 56 cents of 200 before the market makers turned the sledge-o-matic up to full power and promptly pushed TSLA lower. After that pushdown TSLA drifted up and down near the red/green line for the remainder of market hours. TSLA gained 0.52% for the day.

The real action was in after hours as Nvidia's results and guidance were sufficient to satisfy Wall Street. Here's Yahoo's take. NVDA gained 9% after hours, just enough to bring the stock price back to where it was trading last week. For us TSLA investors, it looks like porridge that was not too hot and not too cold. AI and chip stocks rose after hours. TSLA gained 0.72%.

In the EV world, both Lucid and Rivian fared poorly, with disappointing guidance. Naturally, the media will spin these results as a general retreat of buyers from EVs rather than as a situation where the two are having difficulties competing with TSLA.

TSLA will likely be carried higher on Thursday by the rising tide as the market feels warm and fuzzy about AI companies. OTOH, it's not beyond the media to spin the Lucid and Rivian stories to cast doubt upon TSLA and counter the company's AI bonus that should otherwise be awarded on Thursday. It'll be interesting to see. If TSLA pushes 200 expect the sledge-o-matic to be turned to high once again, but of course there's always the chance that investor enthusiasm can overpower option seller treachery. Sooner or later it's going to happen, but the market makers would really like to see it happen on a Monday or Tuesday, not a Thursday or Friday.

Overall, the games that the option sellers play persist. TSLA is making impressive headway with FSD and Optimus (Tesla Energy and Gen 2 likely as well), but that progress has not yet affected the stock price in a meaningful way. On the day's Brighter with Herbert, the group suggested ways that TSLA might break higher in the short term. One particularly noteworthy idea was that if FSD v12 is impressive enough, a car company might announce a licensing agreement with Tesla, and Wall Street would see the dollar signs and react positively. Solving the uncertainty of Elon's pay package is, of course, another short term catalyst that would push the stock upward.

Yields on 10 yr treasury bonds rose to 4.3% on Wednesday

Max pain on Wednesday morning was 192.50. Small changes in max pain just don't matter this week. The market makers are focused upon keeping TSLA from running higher than 200 by Friday's close.

TSLA options volumes on Wednesday

By holding TSLA withing a relatively small range for the past three weeks, market makers have succeeded in bringing the upper and lower bollinger bands inward to temper any big moves up or down, just what works best for the MMs.


Conditions:
* Dow up 48 (0.13%)
* NASDAQ down 50 (0.32%)
* SPY up 0 (0.09%)
* TSLA 194.77, up 1.01 (0.52%)
* TSLA volume 103.0M shares
* Oil 78.02
* IV 44.4, 22%
* Max Pain 192.50
* Percent of TSLA selling tagged to shorts: 44%
* Volume at 4pm closing cross: 3.6M shares

 

[Papafox]

TSLA chart above

QQQ chart above

Thursday was a low volume day for TSLA (92M shares) as the market reacted enthusiastically to Nvidia's Wednesday afternoon ER. QQQ started high and went progressively higher. Nasdaq closed up 2.96%. If TSLA gained with it's normal beat, it'd be up 6% or about $12, something the market makers would frown upon. And so we saw two Mandatory Morning Dips on Thursday. Keep in mind that big option sellers can get a dip going but the vast majority of heavy lifting is done by others. There's algos, there's retail investors seeing red and moving money to Nvidia, there's stories of EV price wars (not such a Tesla problem as they make out), and there's much else. Both of the day's morning dips got TSLA down to nearly 190 but buyers immediately brought the stock price back up. Those dips that look like Midwest tornados are most likely manipulative in origin, IMO.

Percent of selling tagged to shorts was a low 45%, but I would take that number with a grain of salt because switching to non-FINRA exchanges allows for just about any number to be published. Trading during the 4pm closing cross was an exceptionally high 6.4M shares, especially for such a low volume day, and that volume suggests lots of day-short covering to me. Look at how TSLA topped out well before QQQ in the charts above. All that capping to keep TSLA below 198 (to give wiggle room below 200) required plenty of shorting.

Best part of the day? I enjoyed exploring X.com for positive reports on FSD V12, especially the software doing things that V11 never could. Can't wait to get V12 on my Model 3 and I suspect that enthusiasm will be expressed in higher take rates, particularly when Tesla opens up FSD in China and elsewhere.

News:
* Sawyer Merritt says Tesla has increased the price of Model 3 LR in the U.S. by $250, as well as increasing the price of the white interior on that vehicle by $500.

Yields on 10 year treasury bonds rose to 4.33% on Thursday

Max pain Thursday morning was once again 192.50. Notice that option sellers don't lose much money until the price falls below 185 but with 70K call contracts open at 200, they lose a ton for all increases above that level. Consequently, they're willing to err on the low side, rather than the high side.

TSLA options volumes on Thursday

The upper bollinger band dipped to 200.59, which gives some help to the effort of the market makers to keep TSLA from rising too far above 200 on Friday.

Conditions:
* Dow up 457 (1.18%)
* NASDAQ up 461 (2.96%)
* SPY up 10 (2.07%)
* TSLA 197.41, up 2.64 (1.36%)
* TSLA volume 92.1M shares
* Oil 78.31
* IV 42.6, 10%
* Max Pain 192.50
* Percent of TSLA selling tagged to shorts: 45%
* Volume at 4pm closing cross: 6.4M shares

 

[Papafox]

TSLA chart above

QQQ chart above

There's not much to say about Friday's trading. The market makers and option-selling hedge funds didn't want TSLA to possibly rise above the enormous (almost 70K contracts high) call wall at 200 strike, and so they went to work pushing TSLA lower until it closed about 53 cents below TSLA's 192.50 max pain number. Low volume (only 78M shares) made the manipulation easy. The recent FUD themes of nobody wants to buy an EV anymore and EV price wars gave the manipulators the leverage to push lower easily.

The week's highlights were the continued progress of Tesla in becoming a dominant power in the world vehicle market. Lucid and Rivian posted ERs that show a lack of ability to come close to profitability in the EV market at present, and Ford's Lightning F-150 has been sidelined temporarily due to some unspoken quality issue. We saw many new videos of FSD V12 conquering problems that V11 could not and we saw Optimus taking a long stroll around the Tesla robotics workshop. Every week is another week closer to Level 4 and 5 FSD plus Optimus robots building vehicles and more robots for Tesla. Tick, tick, tick.

Although percent of TSLA selling tagged to shorts was only 45% on Friday, the combination of low volume plus a constant descent that lacked news or macro support for a dip of that magnitude strongly suggests Friday manipulations to get TSLA close to max pain. What was surprising was the absence of such an apparently manipulative dip during either of the previous two Fridays. OTOH, those Friday's didn't allow any giant call walls to come into the money, but Feb 23's 200-strike call wall was so massive that the option sellers apparently didn't want to take a chance of it coming into the money.

Yields on 10 yr. treasury bonds fell on Friday to about 4.25%

Max pain Friday morning was 192.50. Looking at the open interest chart above, All the market makers had to do was get TSLA to close above the 190-strike puts and the 200 strike call wall. A close around 192 accomplished the mission.

Friday's TSLA options volumes

Here's the story of TSLA's price action since the beginning of the year. TSLA moved obediently down from nearly 250 to below the 216.67 max pain that was anticipated for the Jan 19 big yearly option close. On Jan 25, the day after the Tesla 4Q23 ER, TSLA did a quick cliff dive after reasonably decent results but a lack of guidance going forward for the year. The end of Jan and the bulk of Feb have been volatile ups and downs that have melted slightly upward. If you understand that volatility leads to more options trading, then the relatively flat performance of TSLA since the ER with big daily volatility has been a profitable combination for the option sellers.
Chart courtesy of @JimS with enhancements by @Papafox

For this coming Friday, Mar 1, max pain is once again 192.50 and we have three big call walls at 200, 210, and 220. Keep in mind that this past Friday's 200-strrike call wall involved more contracts than all three of this coming Friday's big call walls combined.

The mid bollinger band has been falling since the year began and is just now levelling off.

For the week, TSLA closed at 191.97, down 7.98 from the previous Friday's 199.95. Here's hoping your weekend was spent with those who most matter to you.

Conditions:
* Dow up 62 (0.16%)
* NASDAQ down 45 (0.28%)
* SPY up 0 (0.07%)
* TSLA 191.97, down 5.44 (2.76%)
* TSLA volume 78.4M shares
* Oil 76.49
* IV42.2 , 8%
* Max Pain 192.50 for Feb23, 192.50 for Mar1
* Percent of TSLA selling tagged to shorts: 45%
* Volume at 4pm closing cross: 3.5M shares (plus 2M shares in previous 10 mins)

 

[Papafox]

TSLA chart above

QQQ chart above

Nice bounce for TSLA on Monday, up $7.43 or 3.87% vs the Nasdaq's dip of 0.13%. Now it's time for a quiz.

Why did TSLA lose close to 3% on Friday, only to gain close to 4% on Monday?
Answer A) Investors just changed their view of TSLA from very bearish to very bullish over the weekend
Answer B) The market makers pushed TSLA lower on Friday to achieve their max pain goals (and protect $200 calls) but were willing to keep their grubby paws off the stock on Monday, which allowed the market to push it higher and relieve some upward pressure.

I go for B, of course, but nothing is ever as simple as it seems. For example, Option sellers didn't short anywhere near enough shares on Friday to push it down that far. Instead, you see a push to get the snowball rolling downhill, at which point it picks up momentum and carries on by itself. They give it a nudge here and there, as needed.

On Monday, we saw caution in the pre-market as retail investors weren't quite sure what would happen, but after market open the stock took off and FOMO set in. Remember that the beginning of the week is when market makers are most tolerant of a big TSLA move upward (particularly if it doesn't threaten any tall call walls). Still, they turned on the sledge-o-matic when TSLA was threatening to climb above 202, and by market close they had TSLA below the 200 call wall, with 60 cents to spare.

I suspect a good many of the TSLA buyers on Monday morning were traders. They've seen TSLA trading within a relatively small range over the past couple weeks and Friday's dip took it to a place where there was more room for up than down in that trading range. Conversely, traders were likely jumping ship on Friday after the market makers got the ball rolling downhill. On Monday, you also had some real investors adding shares. Volume was relatively high at 111M shares.

Yields on 10 yr treasury bonds closed around 4.29% on Monday

Max pain Monday morning was again 192.50. Since Friday morning we've seen the 195-strike calls grow into a wall, so there's a clump of call walls at 195, 197.50, and 200. MM's defended 200 on Monday but weren't able to reclaim 197.50 or 195.

.

Monday's TSLA options volumes

Look at how much volatility we've seen in daily TSLA fluctuations over the past 7 trading sessions and yet how relatively narrow the trading range has been over that time. The big up days are typically higher volume days.

Conditions:
* Dow down 62 (0.16%)
* NASDAQ down 21 (0.13%)
* SPY down 2 (0.37%)
* TSLA 199.40, up 7.43 (3.87%)
* TSLA volume 11.5M shares
* Oil 77.60
* IV 42.2, 8%
* Max Pain 192.50
* Percent of TSLA selling tagged to shorts: 41%
* Volume at 4pm closing cross: 3.7M shares

 

[Papafox]

TSLA chart above

QQQ chart above

TSLA enthusiasm carried into market hours on Tuesday, but the rally above 205 lost steam. Market makers weren't going to let TSLA close above 200 this week if they could help it, and a fade in QQQ after 11am helped them push TSLA lower. This morning dip would also be the signal for the traders who jumped in on Monday to take their exit and assume 205 would be the week's high. Strong macro performance or good Tesla news could reignite the rally, but lacking such a catalyst the market makers will likely prevail with their fine-tuning of TSLA price this week.

The good news? Max pain on Tuesday rose to 195, so we're looking at a higher close this week compared to last week if things remain static. The rumor mill says that Apple has given up on the autonomous EV that they never said they began. If such a rumor is true, it's just one more data point showing that few entities really want to go up against Tesla in the EV and FSD markets.

So, we continue to monitor Tesla's long range prospects (looking better all the time) while watching the pain dry, er... watching the stock get manipulated within a fairly narrow trading range. Signs that we're breaking out of the market maker tractor beam would include noticeable failures of manipulations and a departure from the expected trading range. For me, it's off to the gym to use this time positively.

Come Thursday we will see the PCE report. This is the Fed's favorite inflation gauge and if it comes in hot (as did the CPI and PPI) then Mr. Market will be displeased. OTOH, truflation.com says U.S. inflation is 1.87%, so there's a ray of hope.

Yields on 10 yr treasury bonds closed around 4.29% on Tuesday

Max pain Tuesday morning was 195. That is a good move because as you can see from the open interest chart above, there's a fair number of puts open at 195. OTOH, the 200 call wall has grown to more than 60K contracts, and so we're in the same situation as last week, with market makers feeling plenty of incentive to keep TSLA below 200 come Friday afternoon.

Tuesday's TSLA options volumes

TSLA ran above 205 on Tuesday before being pushed lower by the option sellers. One reason for the weakness was that the upper bollinger band stood at 202.66 at day's end. A lot of big institutional buyers don't like to pick up shares above the upper bb.

Conditions:
* Dow down 97 (0.25%)
* NASDAQ up 59 (0.37%)
* SPY up 1 (0.19%)
* TSLA 199.73, up 0.33 (0.17%)
* TSLA volume 108.2M shares
* Oil 78.54
* IV 42.3, 10%
* Max Pain 195
* Percent of TSLA selling tagged to shorts: 49%
* Volume at 4pm closing cross: 2.3M shares

 

[Papafox]

TSLA chart above

QQQ chart above

Wednesday saw a second assault by TSLA on 205 in as many days. Unlike Tuesday's effort, TSLA actually managed to hold onto nearly half of its gains and closed at $202.04, up 1.16%. In contrast, Nasdaq closed down 0.55%. Thus, it was a strong relative day for TSLA. Of course the market makers would prefer to avoid a TSLA close above 200 on Friday but as we saw today, if 200 falls, then they revert to protecting 205, then 210, etc.

Fortunately for the market makers, the Nasdaq was solidly red throughout the day as investors worried about the Fed's PCE inflation report, coming out Thursday at 8:30am. A hot PCE could save the option sellers' bacon this week. OTOH, a cool PCE would be a welcome relief and the markets should rally. Trying to control TSLA in such a climb would be an interesting challenge (which I'd enjoy watching).

Part of Thursday's TSLA strength could have come from Elon's Tweet that the Roadster 2 will have enhancements through cooperation with SpaceX and the Roadster should become available in 2025. As mentioned on TMC, Tesla's willingness to devote resources to the Roadster 2 project suggests that the Gen 3 platform is well along in development. Personally, I think a big part of the timing of Elon's announcement is related to BYD announcing a supercar to compete with Ferrari in speeds. Elon doesn't want Tesla to lose its "coolest vehicle manufacturer" crown and so the Roadster 2 is now on the roadmap. With the SpaceX option package, the new Roadster should win the contest hands down.

Since the January 4Q23 ER, TSLA has been gradually regaining lost price territory. Though the Apple decision to abandon an autonomous EV made headlines, Tesla's triumph over other manufacturers is not nearly so newsworthy. Nonetheless, it is there. In this episode of Brighter with Herbert , Herbert Ong and Jeff Lutz discussed Tesla's strength compared to other EV makers. BYD may be selling lots of EVs in China, but they're typically inexpensive low-performance vehicles and the company only averages $1300 profit per car. In contrast, Tesla (even after the deep discounts) makes $7000 per vehicle. Ford is losing about $36K/vehicle, Rivian $46K/vehicle, and Lucid takes the cake at a loss of $377K/vehicle. It's apparent that Tesla's culture of relentless cost cutting and innovation has created a company that is leaving the others behind. Maybe that situation is worth a few dollars in the stock price, just saying.

Expecting a volatile Thursday for TSLA.

Yields on 10 year treasury bonds closed at 4.27% on Wednesday

Max pain remained at 195 Wednesday morning and the 200 call wall remained at about 60K contracts high. Both 205 and 210 call walls grew since Tuesday.

Wednesday's TSLA options volumes

Wednesday's climb brings TSLA within about $8 of the typical trading price before the 4Q23 ER. The uptrend is apparent now. TSLA bumped its head on the upper bollinger band once again and fell. Good news is that both the mid and upper BBs are heading higher at last.

Conditions:
* Dow down 24 (0.06%)
* NASDAQ down 88 (0.55%)
* SPY down 1 (0.13%)
* TSLA 202.04, up 2.31 (1.16%)
* TSLA volume 98.8M shares
* Oil 78.38
* IV 41.5, 4%
* Max Pain 195
* Percent of TSLA selling tagged to shorts: 47%
* Volume at 4pm closing cross: 2.9M shares

 

[Papafox]

TSLA chart above

QQQ chart above

The PCE rose 0.4% in January, as expected, giving the PCE a 2.8% yearly rate. Here's CNBC's take. You can see the positive move in TSLA and QQQ at 8:30am when news came out. Quite simply, the market was fearful and a neutral result was welcomed. Nasdaq and QQQ closed up for the day (0.9% for Nasdaq), but with an odd dip just before noon.

QQQ's fade after about 10am was all the market makers needed to push TSLA closer to max pain. Once the dip was completed, QQQ regained all of its morning losses but TSLA remained in the red for the remainder of the day. Once again, capping a fallen stock price is easier than pushing the stock price down. Even though percent of TSLA selling by shorts was not terribly high (0.49%) that number can be kept low by borrowing shares to short from non-FINRA exchanges, and I believe that happened on Thursday. The telling number was a massive 10.3M shares trading hands in the 4pm closing cross, such a large number that I'm inclined to believe there were plenty of short shares being covered in the closing cross.

Despite the heavy handed manipulations of TSLA this week, the good news is that TSLA crossed 205 for the third time this week and max pain next week has already risen to 200.

News:
* Tesla officially opened a number of superchargers to Ford vehicles in North America on Thursday.

Yields on 10 yr treasury bonds dipped to 4.25% on Thursday

Max pain Thursday morning rose to 197.50. That's a $5 gain so far this week, which is significant because max pain (and associated near tall call walls) affect where the stock closes on Friday. Max pain for Mar8 is now 200, which is also a positive.

Thursday's TSLA options volumes

That upper bollinger band can't rise quickly enough. TSLA bounced off it on Thursday.

Conditions:
* Dow up 47 (0.12%)
* NASDAQ up 144 (0.90%)
* SPY up 2 (0.36%)
* TSLA 201.88, down 0.18 (0.08%)
* TSLA volume 85.1M shares
* Oil 78.26
* IV 40.8, 3%
* Max Pain 197.50 for Mar1, 200 for Mar8
* Percent of TSLA selling tagged to shorts: 49%
* Volume at 4pm closing cross: 10.3M shares

 

[Papafox]

TSLA chart above

QQQ chart above

There's nothing like a deep Mandatory Morning Dip to wake up TSLA investors on a Friday morning. The macros show no reason for the performance and the day's trading suggests it was a manipulation. Notice how the dip took TSLA below 200 (tall call wall). The recovery stopped around 200 and it wasn't until after 11am before TSLA broke free to engage in yet another plateau, this one below 201 (to give access to 200 in the afternoon, I suspect). Meanwhile, QQQ was climbing steadily upward. Around 12 noon the market shrugged off the morning lethargy, broke the capping, and with continued macro strength TSLA exceeded 204 a bit before 2pm. From here, a session of sledge-o-matic whacks brought TSLA lower, but with each whack TSLA started gaining again until the next whack. Another whack before close and TSLA ended market trading at 202.64. I won't call this a failed manipulation because TSLA gained only 0.38% compared to the Nasdaq's 1.14%.

How is the market gauging TSLA at the moment? Deep price cuts have mostly not occurred in the traditionally slowest quarter of the year. The exception is China, where an automotive price war is being used to weed out the oversupply of vehicle producers. We saw Tesla offer up to $4807 worth of incentives for China buyers taking delivery before Mar31. OTOH, Model 3 LR prices went up last week in the U.S. and Model Y RWD and LR went up $1K Mar1 as buyers were previously told to expect. For deliveries, Model 3 LR production from Fremont has dragged for some reason, but European deliveries look encouraging for February.

On a timetable longer than quarterly concerns, Tesla these past few months has truly shown its strength, with Apple throwing in the towel on an autonomous EV, U.S. carmakers cutting back on EV plans, and Tesla showing considerably greater profits than every other EV maker, including the Chinese. Fingers crossed that Tesla shows strong gains in Energy during Q1. The market has realized with the ChatGPT improvements that neural nets working on AI is going to be an economic gamechanger. Various players will score dominance in unique areas of the AI world. In terms of giving AI the ability to actually do physical tasks, FSD and robotics look to be the hot bets right now. Tesla's ability to compete in these areas rests upon both its strong positional AI expertise (gained through FSD development) and strong manufacturing skills (essential for bringing Optimus to market). Tesla's software which runs the factories is a breakthrough in AI (I suggest viewing the Joe Justice youtube videos) and so we are now seeing a convergence of AI skills at Tesla coming together as Wall Street suddenly takes an interest in this area. Once a competing robotics company receives decent valuations from Wall Street, analysts will be inclined to start giving Tesla value for Optimus development as well. Meanwhile, FSD V12 is really impressing users. Market makers have been keeping their thumb on TSLA in recent times but at some point the promise of what's to come will allow Tesla to make that big jump higher. In the meantime, I'm not letting the meager recent gains of our stock discourage me. Our day will come, again.

News:
* TeslaBoomerMama has laid out on this X.com thread her suggestions that investors quickly send letters to the Delaware Judge, advising her of how you feel about the decision and the proposed lawyers fees. I'm mailing my letter tomorrow. The most recent development is that the lawyers are asking for 29 million shares of TSLA as compensation, which is potentially more damaging than a cash award. Lovely.

* Elon Musk has sued Open AI and Sam Altman for breach of contract.

Hope for better inflation numbers ahead? Truflation.com's U.S. inflation number just dipped to 1.61% after another noticeable dip

Yields on 10 yr. treasury bonds continued the week's downward trajectory to 4.196%

Max pain Friday morning was 197.50. Clearly the market makers would have preferred a close below 200 on Friday but the macros were too strong and they could pull it off, bless their icy little hearts.

Friday's TSLA options volumes

It's been an interesting 4 weeks. In all but the third week, stock price closed above max pain (bullish). In the first two weeks of this chart, we saw what appeared to be a relaxed effort on stock price control by the option sellers. In the last two weeks, we saw evidence of significant effort to reign TSLA in but TSLA managed to climb in week 4 all the same. and close comfortably above max pain and a tall call wall (200) as well. Chart courtesy of @JimS

Max pain for this coming Friday will be 200. Notice that puts now outnumber calls at 200 and 202.50. This is a nice setup for max pain to climb higher if the beginning of the week is strong. Market makers will offer increasing resistance to TSLA climbing above 205 or 210.

TSLA could have climbed above 206 and still remained below the upper bollinger band on Friday but the option sellers were not going to allow it because it was a Friday will max pain below 200.

For the week, TSLA closed at 202.64, up 10.67 from the previous Friday's 191.97. Here's hoping you spent quality time with those who matter this past weekend. Excited to see what the new week brings us.

Conditions:
* Dow up 91 (0.23%)
* NASDAQ up 183 (1.14%)
* SPY up 5 (0.94%)
* TSLA 202.64, up 0.76 (0.38%)
* TSLA volume 82.2M shares
* Oil 80.04
* IV 40.2, 0%
* Max Pain 197.50 for Mar1, 200 for Mar8
* Percent of TSLA selling tagged to shorts: 44%
* Volume at 4pm closing cross: 3.8M shares

 

[Papafox]

TSLA chart above

QQQ chart above

Okay, I've been digging into TSLA's dip on Monday and I think I can lay out the scenario. China's economy is not inspiring confidence at this time and so EV (and all auto) sales are down. Chinese EV makers BYD and Xpeng have cut prices about 20% because their sales are down about 40-45% in February, according to this South China Morning Post article. Comparing Feb23 to Feb24 is not particularly valid because the Chinese New Year took place in Feb in 24 rather than Jan in 23. Therefore, the correct comparison is Jan+Feb23 vs Jan+Feb24. It works out that 2024 China wholesale number so far is about 6% less for Tesla than this time in 2023. That's a whole lot better than the bloodbath the Chinese automakers are currently enduring. Tesla's Feb24 numbers weren't out when the market opening Monday morning, and so the market drew a particularly negative comparison.

Comparing the first+second month of 1Q24 with 1Q23, Roland Pircher created a graph where 2024 is about 6% less than 2023 so far. Commentary on Pircher's X.com post is interesting.

My guess is that Monday was an overreaction in anticipation of Tesla China results, and they're just not nearly as bad as the results of everyone else in China. OTOH, so far this year Tesla has not been growing Shanghai wholesale numbers (domestic deliveries plus exports) and so Mr. Market won't be thrilled about it. It's the classic glass half full or half empty dilemma. What typically happens in a situation such as we see in China is a tough period such as this weeds out marginal companies that cannot effectively compete and in time brings supply and demand closer together again. In other words, it's got to get bad to get better.

Yields on 10 yr. treasury bonds closed around 4.22% on Monday

Max pain Monday morning was 200. Normally you see the max pain number drop as the stock drops. Look at all those puts at 200, though. Hmm.

Monday's TSLA options volumes

Monday's trading can indeed be called an ugly tall red candle.

Conditions:
* Dow down 98 (0.25%)
* NASDAQ down 67 (0.41%)
* SPY down 1 (0.11%)
* TSLA 188.14, down 14.50 (7.16%)
* TSLA volume 133.1M shares
* Oil 78.86
* IV 44.3 24%
* Max Pain 200
* Percent of TSLA selling tagged to shorts: 47%
* Volume at 4pm closing cross: 7.1M shares

 

[Artful Dodger]

https://twitter.com/x/status/1764583034299560360