Life is indeed complicated when you have an online mistress named TSLA.
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Papafox's Daily TSLA Trading Charts
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Life is indeed complicated when you have an online mistress named TSLA.
I made a prediction in another thread that because I see evidence that longs want to ease TSLA higher now and shorts are willing to do some game playing to prevent the rise, we have reached the point where TSLA could go higher on a day without FUD and news if the broader markets behave themselves. I suggested that TSLA would start higher in pre-market or early morning trading, be pushed into the red by short selling, and would manage to break back into the green where it would close today. Well... the broader markets did not cooperate and so we saw something very interesting.
Conditions:
DOW down 0.18%
NASDAQ down 0.58%
TSLA up 0.01%
TSLA started off well in the green, above 221, but was pulled as expected into the red. For the majority of the day we had the whack a mole tournament of all whack a mole tournaments by the shorts. If you look carefully, you can count about 30 small excursions into the green or attempts to go green, which were met with immediate countermeasures. Seriously, do you think TSLA would trade within a band of about $0.50 most the day if no "managing" of the SP was taking place? I think not. I think we would have seen a gradual drift upward, but since the broader markets were lame today and no news of consequence came forward, TSLA investors lacked the enthusiasm to counter the containment effort. We saw a modest breakout during the final hour, but that was it.
The good news is that the story hasn't changed. TSLA investors still are showing a tendency towards pushing the SP higher. All it's going to take is a neutral day with the broader markets or some good news and up we go.Interestingly, a day with the DOW up 200 and NASDAQ up 60 is not a particularly good environment for TSLA because the stock is not known to trade in unison with the broader markets and traders have a tendency to move their money to more-reliable stocks in this regards on such days.
Over the past couple of weeks, we've seen several dips like this morning's and TSLA has been good at shrugging them off when we're below 220. Such was the case today. For a while you saw TSLA bouncing off 220 just as it had bounced off 219 on Friday, and I rather expected TSLA to close just below 220 because of the obvious effort being put in to "manage" TSLA SP. Alas, the longs pushed the stock up to 220.68 for the close, and I'm just delighted the longs prevailed. The ability for TSLA to bounce back from a deep opening dip and to overcome repeated attempts to hold a price is something I see as nicely bullish, particularly considering the increased volume today.
Conditions:
* Dow up 0.64%
* NASDAQ up 0.53%
* TSLA up 0.77%
* TSLA Volume: 5.3M
Thanks MikeC. You are right on both accounts.
Correction: TSLA Volume today: 2.244M shares
I like to put myself in the shoes of a short who has a ton of money on the line with TSLA, who believes that bad news (macro or otherwise) may be not far down the trail, and would like to get TSLA descending in SP so that "the usual" descent takes place when there's a long absence of news. All he needs is to get the stock descending nicely using one means or another, longs get scared, and the situation snowballs from there (or at least he thinks). So, on Friday investors wanted to push TSLA up a bit, TSLA was up in pre-market trading this morning, the broader markets were up this morning, and the amateur hour of a Monday is usually a time for green as new investors had the weekend to make up their mind to get in. All four situations are bad for a short, so the shorts sell a large amount of TSLA on opening in an attempt to unnerve the longs instead of allowing the four positives to lead to a nice climb early in the day. The problem is that the longs aren't particularly inclined to be unnerved now. During the descent to below $150, the Model X had real problems in its ramp-up, we didn't know the demand for Model 3 or even whether it would be a weirdmobile, there was big fear in the macro world and it looked like TSLA might need to raise some capital in an environment not conducive to raising capital. All of that is changed now, and longs aren't panicking when TSLA has a big dip. Instead, they use the opportunity to buy. By bringing TSLA right back up into the green after its early morning dip, the longs made a statement. Further, since the shorts failed to hold the line at 220 today, which is a number with some psychological value, one needs to consider that the shorts are running out of options for game-playing. Consider this morning's dip to be a brave but unsuccessful cavalry charge by the shorts involving lots of men and resources. They were driven back and lacked the spirit to defend $220 as the longs relentlessly pushed to break above that number. Shorts have to be discouraged with today's trading even if the SP gains were fairly light.
Unless the Q2 delivery numbers are low, Q2 ER is disappointing, or something goes wrong with Tesla or the macro environment, the stock price is poised to head up because there's so few reasons for it to be heading down. One of the last hopes of the shorts is that Model 3 will cost a whole lot more than what Tesla figures, but Tesla actually did a good job of pricing Model S to give a 25%+ gross margin, and I suspect Tesla will be just as capable of tweaking the costs of Model 3 so that it yields a decent GM. The gigaparty could be the event that builds up the longs and sends the shorts into retreat in a big way, because if we see the gigafactory is on track for producing not only a suitable number of suitably-priced batteries for Model 3, but also batteries for Tesla Energy, then the longs are free to march forward with little resistance.
I believe the battle analogy for TSLA is an apt one because the stock is so difficult to assign a value to. So much of the movement of TSLA is based upon momentum. It's just like a battle where it's really hard to rally the troops when you're in retreat and the retreat occurs until a natural point of support or resistance is reached, at which time the battle lines are drawn anew. With about 30 million shares being traded by shorts, they match or exceed the number of shares being traded by longs on many days. Thus, you need to understand the mentality in both the short camp and in the long camp to predict where we go from here. News can indeed change the momentum, but for now I see the longs as confident the future looks good and the shorts wearing down from recent skirmishes.
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Yea it seems like once there's a definitive direction of the price movement it kind of takes care of perpetuating itself for a while, maybe due to all the momentum trading so it makes sense that a lot is on the line to prevent that price movement from establishing itself.
Thanks Papafox. I'm really curious if these short battles result in a substantial reduction of short interest to corroborate the theory that shorts fear there are no more immediate reasons for the SP to go down and thus are covering at the dips. I think the next short interest numbers for 5/31 will be published this Friday?
The game-playing by shorts normally allows them to "reload" their status. Once longs get scared or limits are triggered and the SP falls, game-playing shorts can take a profit by buying shares to close positions and then be set up to sell shares to re-enter with their game playing at higher stock prices. When the games don't produce the desired drop in SP, however, the shorts cannot make profits by buying to trim holdings a bit and they actually get heavier in TSLA then they like. This furthers the discomfort level for shorts, and brings them closer to a point where they start buying to minimize their exposure to a stock that can't be driven down any more. Of course we get to enjoy the benefits of that buying.
Prior to today's rout, I would guess there are still around 29 million short shares, but obviously with a 10 pt gain of SP, shorts are starting to head for the exits at last.
Looks like the shorts didn't do too well in containing the breakout ; ) Obviously the Ron Barron appearance set things off today, but some of us believe that the stock was on the verge of a breakout anyway because on Monday the shorts appeared to lose the ability to manage the SP. Congrats to all longs!
Conditions:
* Dow up 18 (0.1%)
* NASDAQ down 7 (0.14%)
* TSLA up 11.66 (5.3%)
* TSLA volume 6.2M shares
* Very bullish morning TV appearance by Ron Barons
Note that trading is staying strong in the after hours so far. If we leave the 50dma behind tomorrow, then the technical traders may jump in. I wouldn't be surprised to see a battle over the 50dma (close to today's closing price of 232.32) tomorrow morning. I was a little late setting the nets to catch oddball fish during today's after-hours trading. Notice that momentary excursion down to about 226 about 4:30pm. I have both a high sell and a low buy set now but I'm watching after-hours trading carefully to detect any large swings that might warrant moving my buy or sell limits.
Today TSLA took off for the stratosphere right after opening and broke 240 before buyers had one of those "Did we really bid up the price $20 because of an optimistic few comments from some investor?" moments. I suspect a good amount of the early morning buying was from shorts exiting their positions. Longs took profits near and after the peak, which started a downhill run that reached its bottom close to the 50 dma and the starting point for the day's trading. At this point, longs who took profits at higher levels started buying back in, because the future looks bright, and we settled a bit over 235 today, which is still about $15 above where we were two days ago.
Notice the difference between a descent caused by longs taking profits and a descent orchestrated by short manipulations. In a manipulated descent, look at this chart from June 2 and see how much sharper the downstrokes are and how much recovery we see before the next downstroke. Granted, the scale of the June 2 movements shows much more detail because of a smaller overall price change, but you should still be able to see the characteristic marks of a manipulated descent vs. a "longs are selling" descent.
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I Missed June 9th's chart because I was out of town without a computer while chart was available.
Here's June 10th's:
Conditions:
DOW down 120 (0.67%
NASDAQ down 64 (1.29%)
TSLA down 10.57 (4.61%)
TSLA volume: 6.0 M shares
TSLA continued the slide started in final minutes of 6/9 trading caused by hyped up story of suspension problem on a Model S
The opinion of many of us TMC regulars is that the Model S in question was likely driven on questionable terrain in a part of country where salt is regularly applied to roads and the vehicle's ball joint had been missing its protective cap for some time. The operator's willingness to ignore the symptoms of a deteriorating ball joint is also an issue. The combination of these elements led to corrosion of the ball join and eventual failure. For these reasons, many of us believe that the threat to TSLA stock price has been overdone by the market because this is more of an exceptional case of usage rather than a widespread issue with Model S and a positive correction should be forthcoming. With the NASDAQ losing over 1% today, however, the market was in no mood today to turn positive.
Was the selling caused by longs jumping ship or shorts jumping in? Obviously it was a combination of the two, but looking at the shape of the trading, I see various sharp spikes down with immediate recoveries, and so I think at least part of the slide was caused by shorts reentering a TSLA position, which is rather surprising because this event is seen by longs as a gift to shorts who needed to exit their positions now that TSLA has demonstrated a propensity for running higher after the Ron Baron talk a few days ago.
Maximum Pain stood at 227 today and we saw no evidence that the market makers influenced SP during the final hour. Max pain for next week presently stands at 227 as well, suggesting that the market sees this recent dip as perhaps a short-term issue rather than a prolonged readjustment to stock price.
The wide swings in after hours price suggests either than the story is still misunderstood by a large part of the trading public or that the after-close dip we saw within an hour of close was a shorts-induced drop that has since been countered by longs buying back in. Continued improvement of after hours trading price would be a bullish indication regarding the shifting views of the suspension issue and with a weekend ahead, there will be time for the controversy to further be sorted out and (I believe) the general trading public reaching opinions more in line with those reached by TMC investor forum members.
Edit: at 4:23pm Pacific time, Elon tweeted that NHTSA found no safety concern with the Model S. After that tweet, TSLA recovered quickly to about 221, about $4 highter than the after-hours low. This sharp upturn in after-hours SP, coupled with an entire weekend to get the word out, bodes well for Monday's trading.
OK, I had to add this chart because it is what I call a "staged ending". TSLA recovered quickly to 221 and then suddenly stopped the climb. Then, in the final minutes of trading it descended first to 220.50 and then finally to 219.56. Now, there's no reason in this world for the stock price to suddenly reverse course after Elon's tweet(s). Rather than this being longs trying to get out at the end of the day, I believe it is shorts trying to make TSLA look like it had less of an after-hours recovery as we go into the weekend.
Enjoy your weekend. Monday should be a good day for us ; )
Here's June 10th's:
Conditions:
DOW down 120 (0.67%
NASDAQ down 64 (1.29%)
TSLA down 10.57 (4.61%)
TSLA volume: 6.0 M shares
TSLA continued the slide started in final minutes of 6/9 trading caused by hyped up story of suspension problem on a Model S
The opinion of many of us TMC regulars is that the Model S in question was likely driven on questionable terrain in a part of country where salt is regularly applied to roads and the vehicle's ball joint had been missing its protective cap for some time. The operator's willingness to ignore the symptoms of a deteriorating ball joint is also an issue. The combination of these elements led to corrosion of the ball join and eventual failure. For these reasons, many of us believe that the threat to TSLA stock price has been overdone by the market because this is more of an exceptional case of usage rather than a widespread issue with Model S and a positive correction should be forthcoming. With the NASDAQ losing over 1% today, however, the market was in no mood today to turn positive.
Was the selling caused by longs jumping ship or shorts jumping in? Obviously it was a combination of the two, but looking at the shape of the trading, I see various sharp spikes down with immediate recoveries, and so I think at least part of the slide was caused by shorts reentering a TSLA position, which is rather surprising because this event is seen by longs as a gift to shorts who needed to exit their positions now that TSLA has demonstrated a propensity for running higher after the Ron Baron talk a few days ago.
Maximum Pain stood at 227 today and we saw no evidence that the market makers influenced SP during the final hour. Max pain for next week presently stands at 227 as well, suggesting that the market sees this recent dip as perhaps a short-term issue rather than a prolonged readjustment to stock price.
The wide swings in after hours price suggests either than the story is still misunderstood by a large part of the trading public or that the after-close dip we saw within an hour of close was a shorts-induced drop that has since been countered by longs buying back in. Continued improvement of after hours trading price would be a bullish indication regarding the shifting views of the suspension issue and with a weekend ahead, there will be time for the controversy to further be sorted out and (I believe) the general trading public reaching opinions more in line with those reached by TMC investor forum members.
Edit: at 4:23pm Pacific time, Elon tweeted that NHTSA found no safety concern with the Model S. After that tweet, TSLA recovered quickly to about 221, about $4 highter than the after-hours low. This sharp upturn in after-hours SP, coupled with an entire weekend to get the word out, bodes well for Monday's trading.
OK, I had to add this chart because it is what I call a "staged ending". TSLA recovered quickly to 221 and then suddenly stopped the climb. Then, in the final minutes of trading it descended first to 220.50 and then finally to 219.56. Now, there's no reason in this world for the stock price to suddenly reverse course after Elon's tweet(s). Rather than this being longs trying to get out at the end of the day, I believe it is shorts trying to make TSLA look like it had less of an after-hours recovery as we go into the weekend.
Enjoy your weekend. Monday should be a good day for us ; )
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TSLA took off like a race horse out of the gate this morning but soon lost momentum and settled for a slight loss on the day. Looking at the trading ups and downs, I suspect the vast majority was normal trading versus manipulative selling by the shorts because we don't see much of the deep downward stabs followed by quick near-recoveries that you see in manipulations. From noon until end of trading we do see some back and forth trading, but it is not so pronounced as to confirm manipulative strategies. Rather, the generally downward trajectory after 11am, interspersed with a typical number and degree of peaks, is pretty normal trading when a stock is retreating. Macro fears, perhaps related to Brexit, likely account for today's decline, when compounded with the unwillingness of most media sources to contradict their earlier stories about the Tesla suspension problem and the so called cover-up. The good news is the suspension story will soon fade and the emerging story of Tesla's impressive production gains should take over fairly soon. We should consider ourselves lucky to have seen both the likely conclusion of the suspension story (no NHTSA investigation) and come upon evidence of a strong production performance at Tesla before the majority of the market has gained this knowledge.
Conditions:
* DOW down: 133 (0.74%)
* NASDAQ down: 46 (0.94%)
* TSLA down: 0.92 (0.42%)
* TSLA volume: 4.2M
* A lack of news stories in the broader media over the weekend revealing the fraudulent NHTSA filings which led to the HNTSA inquiry.
Note: The bump into the green in early after-hours trading was related to a very few number of shares and is likely the correction for information not published during the normal hours of trading.
Thanks Wenche for the 5 day chart. Yes, the suspension story really took TSLA lower in the final minutes of 6/9 trading.
I'm using a different chart today because the regular chart became too distorted once an error sale of 236 popped up in after-hours trading. The SP quickly returned to 215 minutes later.
TSLA again headed higher in early morning trading, but, as with yesterday, it was pulled lower by macros. I see the trading between opening and about 11:30am as pretty typical ups and downs, but take a look after 11:30am and you will see lots of downward jabs that are very quickly met by recoveries or near recoveries (signals shorts trying to manipulate price to me). Why 11:30 am as the beginning of the jabs? That's because the NASDAQ started recovering about then. Check out this chart of NASDAQ today:
After 13:30 we see downward runs that aren't met by immediate near-recoveries, which I believe are the results of some of the FUD that came out in the afternoon hours. In other words, the FUD, not short-selling lowered the price during this time. Also, see how the volume picked up after 13:30 as the FUD started hitting media outlets. Notice too that the downward jabs met by immediate recoveries continued as TSLA started a recovery in the final hour. So... poor macros got TSLA heading down after its early morning climb, then downward jabs of short-selling were needed to stabilize TSLA in the red, and even as the FUD drove TSLA lower in the afternoon, the bouts of short-selling apparently resumed with the downward jabs in an effort to depress TSLA as much as possible as the NASDAQ nearly recovered.
Conditions:
* DOW down:58 (0.33%)
* NASDAQ down: 5 (0.10%)
* TSLA down: 2.91 (1.34%)
* TSLA volume: 3.6M
What I see with TSLA at the moment is a real war between longs and shorts. Every morning now the longs try to push TSLA higher. I think the smarter shorts see the release of Q2 numbers as being an event they wish to sell prior to and they're trying to gain as much advantage as possible prior to their exits. What is real and working in their benefit is the negative macro environment. Most everything else they put forth is illusion. On the other hand, TSLA has amazing demand waiting for Model 3, it is focused on the manufacturing side of things, is turning out over 2000 Model S and Model X vehicles a week now, and has its expansion financing in place. So, it's basically a battle between illusions of negativity versus actual positive developments at TSLA, and the shorts see the current macro negativity as their window of opportunity for trying to drive the stock price further down before they have to bail as the real numbers start getting positive from Tesla.
I'm using a different chart today because the regular chart became too distorted once an error sale of 236 popped up in after-hours trading. The SP quickly returned to 215 minutes later.
TSLA again headed higher in early morning trading, but, as with yesterday, it was pulled lower by macros. I see the trading between opening and about 11:30am as pretty typical ups and downs, but take a look after 11:30am and you will see lots of downward jabs that are very quickly met by recoveries or near recoveries (signals shorts trying to manipulate price to me). Why 11:30 am as the beginning of the jabs? That's because the NASDAQ started recovering about then. Check out this chart of NASDAQ today:
After 13:30 we see downward runs that aren't met by immediate near-recoveries, which I believe are the results of some of the FUD that came out in the afternoon hours. In other words, the FUD, not short-selling lowered the price during this time. Also, see how the volume picked up after 13:30 as the FUD started hitting media outlets. Notice too that the downward jabs met by immediate recoveries continued as TSLA started a recovery in the final hour. So... poor macros got TSLA heading down after its early morning climb, then downward jabs of short-selling were needed to stabilize TSLA in the red, and even as the FUD drove TSLA lower in the afternoon, the bouts of short-selling apparently resumed with the downward jabs in an effort to depress TSLA as much as possible as the NASDAQ nearly recovered.
Conditions:
* DOW down:58 (0.33%)
* NASDAQ down: 5 (0.10%)
* TSLA down: 2.91 (1.34%)
* TSLA volume: 3.6M
What I see with TSLA at the moment is a real war between longs and shorts. Every morning now the longs try to push TSLA higher. I think the smarter shorts see the release of Q2 numbers as being an event they wish to sell prior to and they're trying to gain as much advantage as possible prior to their exits. What is real and working in their benefit is the negative macro environment. Most everything else they put forth is illusion. On the other hand, TSLA has amazing demand waiting for Model 3, it is focused on the manufacturing side of things, is turning out over 2000 Model S and Model X vehicles a week now, and has its expansion financing in place. So, it's basically a battle between illusions of negativity versus actual positive developments at TSLA, and the shorts see the current macro negativity as their window of opportunity for trying to drive the stock price further down before they have to bail as the real numbers start getting positive from Tesla.
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Here's an interesting example of managing stock price. For much of today, the macro environment was good, and TSLA finally worked itself higher, but the climb was slower than it would otherwise have been because of short-selling efforts at several key price points. When the climb reached 218 it leveled off into micro ups and downs until it blasted through and then it met similar resistance at 219, where it traded sideways. Thus, the climb looked more like stairsteps than a sloping hill. After TSLA peaked, it started working its way down (partly through profit-taking but mostly through a decline in NASDAQ from 2:00pm through 2:20pm) as the Fed's decision had still to be released. Look at about 2:20pm, though as TSLA appeared ready to head back up and the shorts "managed" the SP at 219, waiting for the results of the Fed meeting. Not convinced? Look at the NASDAQ chart for 2:20pm through about 3:30pm, as it is rising again but TSLA is "managed" at 219.
Check out the NASDAQ chart:
At about 3:40pm, the market announced that it was unhappy by dropping quickly. At this point, the TSLA shorts had nothing much to do but watch the SP be pulled down by the broader market. The fall of TSLA wasn't as steep as the broader market, though, so I suspect some of the manipulative shorts bought some TSLA back at day's end to reduce their holdings and "reload" so they're ready to play the game again.
Consider how well such a strategy works for the smarter shorts. They wait until the stock has gone up a bit, they start short-selling to reduce the climb, they may even sell more to define the summit (TSLA today had two peaks trying to press through 222) and then when the stock price settles later in the day through profit-taking or through other mechanisms such as broader market forces, these shorts can close at least some of the day's short positions at a profit. They're both protecting their core short positions in TSLA and making money on the protection mechanism on days such as today.
The good news for longs is:
1) Any time there's manipulation to keep TSLA from climbing, it means there's people out there willing to bid TSLA higher and they'll get their chance in due time
2) Shorts are likely to only put out the effort to protect their core short positions if they feel those core short positions will pay off. When a threat such as Q2 delivery number release approaches, the smarter shorts will liquidate their positions and the SP would rise prior to such an event. Once TSLA releases hard numbers to show that it is financially on track, fear hits shortsville, and we could see quite nice stock appreciation.
I like reality checks, and so anytime I say "here's a way these guys are making money" I like to see if there's a way to make money the same way myself and put my money where my mouth is. Once you start trading your own money, you typically realize it isn't as easy as you thought. One cannot simply buy at the low at the end of a day and then sell at the high of the next day, because Day 1 and Day 2 can be completely different in terms of news, macro environment, etc. Could I buy 100 shares of stock for trading and then sell in the middle of the day when the price has crested and then buy back in towards the end of the day on a day when shares have peaked and then descended again? Neither of my brokerages allow day trading with purchases and sales of the same security same day, and then there's the issue of wash sales, etc. Nor do I have enough shares to buy or sell to influence the market, as I suspect some short-sellers are doing. I suppose exercising some influence on the market is key, and without that advantage I'd just be another day trader rolling the dice.
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