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For the second day in a row, TSLA closed considerably higher than it traded in the morning, putting short-sellers who manipulate in a difficult position because there was little time today to close (buy) at a profit after selling this morning to generate a mandatory morning dip. Judging from the low volume, longs are not worried and are holding their cards, waiting for confirmation of Model 3 5K/wk, profits, and positive cash flow. Looking at the daily chart, you can see those deep dips in early-morning trading followed by near recoveries, which look very much like icicles. These are giveaway signs of short-selling pressure. Shorts couldn't make the longs sweat, however, and so TSLA recovered into the green today. I'll give shorts credit for a nice last 20 minutes of the trading day dip that didn't seem to be related to the NASDAQ or to news.
Take a look at how small the volume bars were today. That's because there was huge volume somewhere, and it turned out to be in the final minute of trading when nearly 400,000 shares traded hands. That's a huge number and suggests some short covering, likely from the manipulations of the day.
Jim Chanos went on CNBC today and spoke poorly of Elon Musk in an amazingly similar fashion to the CNBC hit piece of July 11. Chanos couldn't deliver news of low M3 production or evidence of margins going to be low, so he instead suggested that Musk was deceiving investors. The way he did this was through insinuation by bringing up names such as Theranos, talking about a particularly thin-skinned CEO (trying to get listeners to think he's talking about Musk while talking about someone else), etc. If time permits, it would be illuminating to deconstruct his talk to study his methods.
Comparing the stock chart in the background to TSLA's performance after the talk, you can see that his talk wasn't very effective at talking down the SP.
In other news, Argus reiterated its "buy" rating for TSLA with a price target of 444.
Tesla announced today that its Q2 ER will be Aug 1, which puts it on the early end of likely dates. An earlier ER is likely a good sign because TSLA really does need to say that M3 is sustainably above 5K at the time of the ER and the timing suggests they are confident it will happen. Let's work on various means of judging M3 output, because this one number will be of the greatest importance during the call for determining the market's reaction.
Conditions:
* Dow up 79 (0.32%)
* NASDAQ down 1 (0.01%)
* TSLA 323.85, up 1.16 (0.36%)
* TSLA volume 5.4M shares
* Oil 67.75, up 0.59 (0.88%)
* Percent of TSLA selling by shorts: 51.67% according to volumebot.com
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TSLA had headwinds to buck today, both from a note by a perpetual TSLA bear and from macro conditions. An analyst at Needhan downgraded TSLA from hold to sell on speculation that Model 3 orders were being cancelled faster than they were being placed.Tesla denied any such threat to Model 3 demand. Meanwhile, one of the very first Model 3 Performance version reviews is in. A Wall Street Journal writer said, "If you were hoping Tesla would fail on account of the Model 3 I’ve got bad news: This thing is magnificent, a little rainbow-farting space ship, so obviously representative of the next step in the history of autos. " So this is the world we live in, with one analyst downgrading TSLA because he thinks Tesla is going to run out of buyers for the Model 3, and then a writer for the country's leading financial newspaper gushes wildly about this amazing car that is the future of the automobile. Go figure.
It gets worse. Yesterday one writer for Barrons actually said that Tesla might be doomed if it starts making money because then the stock would be judged by the metrics of auto manufacturers and the stock price would go down. I really don't make this stuff up.
The NASDAQ was a roller-coaster today with tops at about noon and 2pm
Adding to the Needham downgrade and the broader market down day was increased pressure from short-sellers, who sold a robust 56% of TSLA shares today (see chart below).
Short-selling is increasing, but even with undeserved downgrade and poor macros, TSLA hung in there for only a small loss and managed to close above 320.
Finally, take a look at the numbers posed today by Skabooshka. I have heard that Tesla employees receive briefings every day from Tesla and some employee is feeding these numbers to Skabooshka. If the feed of numbers to employees is true, it makes Skabooshka's numbers more believable because someone would surely call him out if the numbers were incorrect.
Looking at yesterday's numbers, you can see Model 3 is showing 160 vehicles below the desired 700/day rate that would yield 5K/wk. Model 3 has already shown 770 and 800 vehciles/day production rate, so we know the lines are capable of well over 5K/week. We've also seen evidence of Model 3s not being turned out during certain times in the past week, which suggests that Tesla is still tweaking the line. The goal is to get up to 1000 vehicles/day total rate for M3, S, and X, which will yield the desired 7K/week total production and bring the desired profits and cash flow positive results. If you add the July 18 numbers up, they come to 940, or only 60 vehicles short of the goal, so we're really a lot closer right now than many people assume. Since we seldom see total production above 1K/day, perhaps the paint-shop is the limiting factor at the moment. Let's see where TSLA takes us from here. I was hoping to see a solid 5K M3/wk this week and 7K combined outplut for all vehciles, but that is more likely to appear next week instead.
Conditions:
* Dow down 135 (0.53%)
* NASDAQ down 29 (0.37%)
* TSLA 320.23, dow 3.62 (1.12%)
* TSLA volume 5.8M shares
* Oil 68.11, down 0.13 (0.19%)
* Percent of TSLA selling done by shorts: 56.35%
Apparently it gets quite complicated:
The Opening Cross: How Nasdaq Stock Prices Are Set
The Auction Method: How NYSE Stock Prices are Set
Basically the same old bidding process happens except that none of the trades actually close until market open: they just report what *would* match up in the order book. And then they let the traders reissue their bids and asks and give a new hypothetical result.
I believe, though I may be wrong, that if the bids and asks are overlapping, they have to use the classic order-book-matching techniques. So if you have buy orders at
330
320
310
300
290
280
and sell orders at
350
340
330
320
310
300
Nearly all the orders from 300 to 330 would be filled, probably at some sort of weighted average midpoint.
But normally people would rebid to avoid this sort of spread-out overlapping order book for the open.
The most likely reason for the drop on Friday was a "sell" reiteration from J.P. Morgan and a dire prediction of TSLA dropping 40% in the coming year. @Lycanthrope from the market action thread really nailed an explanation of this sell rating and low target here. Basically, Lycanthrope pointed out that JP Morgan has been pricing TSLA 40% below the market price for years and he keeps predicting that 40% fall in TSLA to justify the low price target. He included two links that demonstrated JP Morgan's 40% fall obsession. You would think investors would be smarter to fall for an old trick like this.
With Elon Musk now having to be quiet for two weeks prior to the Q2 ER, you can expect the FUD to be flying fast and furious over the coming weeks. I have been busy responding to the FUD and I hope many of you join me in challenging the twitter-FUDsters and the questionable posts by CNBC and others.
As for skabooshka's report for Thursday, if you add the numbers you get 960, so 40 vehicles below a 1000/day or 7000/wk rate. Not exactly a negative report. I am expectig an improvement in the Model 3 numbers in the coming week.
For the week, TSLA closed at 313.58, down 5.29 from last Friday's 318.87. More turbulence likely ahead, but as we get closer to the ER, I think we'll see buying to take advantage of the excellent prices prior to Elon's opportunity to explain how well TSLA is doing so far in the 3rd quarter. Enjoy your weekend, and please spend a little time defending Tesla from the fudsters.
Conditions:
* Dow down 6 (0.03%)
* NASDAQ down 5 (0.07%)
* TSLA 313.58, down 6.65 (2.08%)
* TSLA volume 5.0M shares
* Oil 68.26, up 0.02 (0.03%)
Friday's skabooshka numbers for production were 900 total instead of the desired 1000+. My guess is that constant tweeking underway with the M3 production line is underway and we'll see a nice improvement in M3 numbers before long.
There was a good stretch of M3 daily production from 7/12 to 7/15 (700, 800, 770, 680) before the daily number dropped to 500s. An optimistic interpretation is that Tesla now focuses on improving dual-motor and performance production.
Saturday's M3 production is getting very close to the 714/day needed for 5K/wk. Meanwhile, total production was 930.
bdy0627
Active Member
What about the paint shop? Where do you think the limit is there? Any credible info on it? Shorts on twitter are of spreading the theory that the paint shop allows only 5,000 max per week. Do the S and X use a different paint shop? Or do they all go through the same one?
Off Shore
Off Topic Member
It appears that some conversations that don't reference the daily charts have moved here where the s/n ratio is higher. Understandable but not necessarily a good thing. Please reflect. Thanks.
I agree this is the wrong thread for this discussion. But anyway, the paint shops are good for 500,000 per year. The limit is actually based on the use of certain chemicals and Tesla is more efficient in recycling than anyone else. Some other aspect may be slowing down painting but the permits a not a problem.
The pictures of the 3's in the Lathrop lot raise a good question about their shipping and delivery logistics. They now need to deliver 7,000 cars a week just months after they were only delivering 2,000 cars a week. I hope they have their logistical ducks in a row to get the cars from Fremont to their new owners around the country.
bdy0627
Active Member
I'm going to guess it will be a bumpy transition, but it's still a great problem to have at this point.
Today we saw the fallout of the Wall Street Journal article about Tesla asking some suppliers for rebates on previously-provided parts. Although ongoing negotiations with suppliers are common in industry, a statement about the reason for the rebates, to continue operations and show profits, was concerning to Wall Street. We saw an overreaction quickly after open (almost certainly exacerbated by short-selling), and an ongoing recovery that halved the initial dip by closing time.
The overall reason for the fall today was that the wording of the memo to a supplier could be regarded by some as suggesting that Tesla is getting desperate for cash. The reality is that Tesla should right about now be transitioning to cash-flow positive (if not already) and that cash on hand will affect future growth until a capital raise takes place but it should not threaten continuing operations. Keep in mind, too, that Musk has over $10 billion of Tesla stock right now and he would find a way (through his own wealth or by tapping the cooperation of his Silicon Valley buddies) to find an extra $500 million if the company's survival depended upon it.
Looking at the initial dip, it penetrated the lower bollinger band but TSLA closed a good amount above the lower bb, suggesting that the lower bb typically has a squelching effect upon dips that are somewhat questionable in substance.
Shorts were doing 60% of TSLA's selling today, explaining the severity of the morning dip.
Shorts accounted for 59.74% of the selling today (FINRA says 61.1%)
Here's the day by day listing of M3 production as reported by skabooshka so that you can see the correlation between M3 production and short percentage of TSLA selling. If you then look at the technical chart below, you will discern a couple patterns:
1) When short percentage of selling is rising, we see a negative effect upon the stock price
2) The number of Model 3s produced each day has an inverse effect upon percent of selling by shorts. As the number of M3s produced rises, the percentage of shorts doing the selling decreases, and vice-versa. The obvious exception to this rule is today, when good numbers on July 21 were overriden by the enthusiasm shorts felt toward the WSJ piece. I include historical M3 numbers from skabooshka's twitter posts for your viewing.
Jul 7 380
Jul 8 260
Jul 9 550
Jul 10 610
Jul 11 700
Jul 12 800
Jul 13 700
Jul 14 770
Jul 15 680
Jul 16 530
Jul 17 400
Jul 18 540
Jul 19 570
Jul 20 560
Jul 21 680
This tech chart with dates visible gives you a chance to compare the stock price action for any particular date with the short-selling percentage and with the Model 3 production. Remember that the M3 production numbers for July 21 are released after hours on July 22 and affect July 23's trading.
Overall, I see shorts and longs both thinking they know better than the other camp, which will make the Q2 ER so important. A certain percentage of shorts want to take gains, minimize losses, or trim their positions prior to the Q2 ER, and this is why I believe we are seeing such a spectacularly-intense FUD circus. I do not believe that the steady stream of one big FUD article after another is a coincidence. I think certain actors are timing their release of information to the media.
Consider the past month. On July 2, the day of the run up and then down of the stock after 5K/mo. M3 production was announced, this was the date when we likely saw the most short-selling into new positions (about 300,000 shares early in week, according to Ihor Dusaniwsky).On July 3, Linette Lopez of Business Insider launched her elimination of Model 3 Brake and Roll test by Elon, and the bottom really fell out. The hits kept coming including Lopez's appearance on CNBC with two high-powered Chanos cohorts backing her up, the Jim Chanos interview on CNBC, and the list continues. There really were no overlapping FUD stories of substance, leading up to Sunday's Wall Street Journal piece on supplier rebate requests. No wonder Musk is pissed. This is choreographed FUD theatre with the media faithfully serving their part in the spectacle.
Now a change has occurred. Lately, Business Insider has been far less predatory, suggesting they might be feeling the pressure from possible expansion of the lawsuit against Tripp. Meanwhile, shorts were so hateful towards WSJ journalist Dan Neil for writing a glowing review of Model 3 that Neil canceled his Twitter account. Today, Montana Skeptic, who was one of the vigilantes in the flogging of Dan Neil, closed his own Twitter account, allegedly because of pressure applied when Musk called Skeptic's employer. Expect the FUD war to remain hot and heavy as the Q2 ER approaches.Balancing this downward pressure will be the real support TSLA has displayed any time it dips below 300. Apparently, there are lots of buyers at this price point. Let the battle carry on.
Conditions:
* Dow down 13 (0.06%)
* NASDAQ up 22 (0.28%)
* TSLA 303.20, down 10.38 (3.13%)
* TSLA volume 10.8M shares
* Oil 67.72, down 0.17 (0.25%)
* Percent of selling by shorts: 61.1% (FINRA)
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I like this thread being a quick overview of the day's trading and the M3 production numbers fit into that format. To move the production numbers discussion elsewhere, for the most part, I will try cross-posting the numbers, first in the market trading thread (since they can indeed move the market's response the next day), and then here as an additional data point. Hopefully, we can keep the bulk of that discussion in the market trading thread.
Looks like some major renovation going on in the factory on Sunday because all three vehicle types have low numbers. Hoping TSLA comes barreling out of the gate with Monday's numbers.
Today began on a positive note but the relentless efforts of the shorts (61.49% of selling) and equally relentless FUD campaign took its toll. I do like the ability of TSLA to recover after mid-afternoon bottoms. Yes, there are buyers out there, looking for the best price. Perhaps the biggest piece of FUD was wording released today regarding an investor lawsuit against Tesla. Neroden suggests that such lawsuits can stretch on for years, and the burden on the plaintiffs is high. Nonetheless, it makes for negative news.
Volumebot.com says TSLA shorts did 61.49% of TSLA selling today. You can see that the shorts are stepping up their game to try emerging unscathed before the Q2 ER because such an ER has the potential for being very volatile. Shorts like Chanos who sold into TSLA in the 280s may not be able to extract themselves without losses before the ER and its uncertainty.
Shorts are down to just 6 trading days before the event and many must be frustrated that even with the FUD carnival of July, TSLA is just very hard to push down beyond a certain point.
Looking at the tech chart, the upper bollinger band has leveled since yesterday, which is positive and preserves lots of headroom for climbing still. Looking at today and yesterday's trading, you will see that the lower bb was penetrated on both days but still managed to close within the band. Right now, that lower bollinger band is a friend to the longs because it controls the rate at which shorts can push this stock down prior to its reversal.
Lo and behold, take a look at the trend line for Bloomberg's Model 3 tracker. Bloomberg is getting indications that TSLA Model 3 production will be climbing above 6K/wk by mid-August. I suspect TSLA would be trading higher now if not for the little dip we're supposedly in right now with M3 production. What does 6K/wk M3 sound like? Answer: "Cha-ching!"
Conditions:
* Dow up 198 (0.79%)
* NASDAQ down 1 (0.01%)
* TSLA down 5.77 (1.90%)
* TSLA volume 9.4M shares
* Oil 68.81, up 0.29 (0.42%)
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Hmm, M3 numbers low for 2 days in a row. Tesla, it's time to get them up so that you can show a solid 5K/wk for a week leading into the ER.
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