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Thanks @Tim S for the catch and @ggr for the edits. I'm absolutely delighted today to see the FOMO of the benchmark funds overwhelm the market maker or pin tendencies on a low volume day. What's interesting is that the closer to the 695 price TSLA gets, the more FOMO is generated as benchmark funds try to buy the necessary TSLA shares before it goes over the price that index funds paid. Never a dull moment
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TSLA chart above
QQQ chart above
Our Christmas present arrived early this year when TSLA defied the market maker/pinning tractor beams and closed well above the 630 that many of us were expecting on a reduced hours options close Friday with low volume. Instead, TSLA closed at 661.77, approaching within 5% of the closing cross price of 695. For a stock that has climbed 70% since S&P500 inclusion was announced, a 5% dip in the first post-inclusion week was an extremely small correction.
As I pointed out in my short post, the post-inclusion dip bottomed out Tuesday late morning and TSLA has been climbing ever since. If we assume that JP Morgan was correct when talking to clients and a large number of benchmark funds plan to buy enough TSLA shares to stay neutral compared to the S&P500, the fund managers are going to get mighty nervous as TSLA climbs closer to 695, and I expect FOMO to set in. We'll see. Don't be surprised to see the usual suspects engineer a Mandatory Morning Dip on Monday to prevent the FOMO from getting started. My guess would be that traders such as myself would buy that dip, which would then lead to a recovery that could really get the FOMO juices running in the veins of the fund managers.
One of the best ways to track whether the benchmark funds are buying is to monitor the TSLA page at ETF.com . Our thanks to @MP3Mike for bringing this resource to our attention. At week's end, there were 55.9M TSLA shares in ETFs. Granted, many ETFs are index funds and won't need to buy, and some benchmark funds are mutual funds (one buy-in opportunity a day) and those benchmark funds won't be reflected in ETF.com's data. Further, there's normal inflow and outflow of holdings in these funds when investors change their investments. Nonetheless, a healthy increase in the TSLA held by ETFs would strongly suggest that benchmark funds are buying. Looking forward to seeing the data on Monday.
Monday's biggest challenge will be getting through the arm-wrestling contest in Congress as Trump, Pelosi, AOC, and others take on the conservative Republicans in an effort to balance all the pork in the stimulus bill with a larger payment to Americans in need. Politics makes for strange bedfellows sometimes. The government has run out of money until an agreement can be hammered out, and so the market get a bit nervous.
EDIT: Sunday evening- The POTUS signed a COVID stimulus bill this evening. Futures are up.
This Electrek.co article reproduces an Elon email to employees, asking them to push hard and make 500,000 deliveries this year a reality. Various TMC members speculate that the email is a positive sign for Q4 deliveries because it occurred with only 5 days left to go and was not frantic. Meanwhile, Troy continues his normal slow increase in delivery estimate as the quarter gets closer to ending. He's at about 502K for the year now, which would imply about 183K for the quarter (and imply very nice financial results).
In a recent Rob Maurer/Tesla Daily video that discusses an X-com holding company for Tesla, SpaceX, etc., Rob clarified an issue with the closing cross. Apparently the 12.4 million shares excess of buyers on inclusion-day Friday was an estimate before the final 695 price was arrived at. The number of buyers during the cross who couldn't find a dance partner is, therefore, unknown but certainly smaller.
Looking at a multi-year tech chart, you can see that on a logarithmic scale such as this, the 2019/2020 rally has now exceeded the 2013/2014 rally in magnitude. Use a pencil to approximate the % climb in stock price for the first big rally, place it over the second big rally and you realize that 2019/2020 is now the all time monster rally for TSLA. See, missing the 2013 rally wasn't so bad, as long as you were patient ; )
Another advantage of the long-period chart above is that you can gain perspective. Remember when TSLA ran higher to nearly 960 (pre-split) early in 2020 and then descended into the coronadip? If you're human, you probably felt a bit of remorse at not selling some shares near that high (and just look at the volume, even compared to the S&P500 inclusion date). Yes, it was reasonable to ride out that dip, you're so much higher now than at 960/5= 192 post-split.
I am looking forward to the week ahead. The stock price movement higher that I expected for the final week of the year's preparations for Q4 Production and Delivery Report started about a week earlier than expected.
For the week, TSLA closed at 661.77 down 33.23 from last Friday's 695.00. Considering the 70% climb for S&P500 inclusion and the monster climb before it and also considering that most of that dip occurred within a minute of the Dec 18 closing cross, a 5% dip is not much. Have a great weekend!
Conditions:
* Dow up 70 (0.23%)
* NASDAQ up 34 (0.26%)
* TSLA 661.77, up 15.79 (2.44%)
* TSLA volume 22.34M shares
* Oil 48.23
* Percent of TSLA selling tagged to shorts: 58%
* IV 62.2, 15%
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TSLA chart above
QQQ chart above
It's hard to fathom that a strong macro day can be a less-than-stellar environment for TSLA, but here we see it yet again today. What typically transpires on such a day is that someone has an incentive to prevent TSLA from running too much higher, and a strong Mandatory Morning Dip ensues. Traders see early on that TSLA is not where they're going to make their money this day, and so they flee TSLA for more rewarding stocks that have reputations for more reliably moving with the macros. Lets take a look at specifics.
The most prominent feature of QQQ's trading on Monday was the dip that bottomed out about 10:20am. That dip represents about 1/2 of 1% of value lost between market open and bottom of the dip. Now look at TSLA. The stock began a strong rally about 8:20am in pre-market trading and threatened to breach 680 just 11 minutes after open. When the NASDAQ dip worsened, TSLA dipped and descended as well, but TSLA's dip was about 2% when it bottomed out during a momentary foray into red territory. Thus, TSLA was descended at an exaggerated 4X multiple of QQQ. Moreover, the QQQ dip bottomed about 10:20am while TSLA continued its descent for an additional 27 minutes, time during which QQQ not only reversed the dip but also began climbing strongly on the backside.
If you stand back and look at the trajectory of TSLA's trading, it was clearly following a lumpy but apparent nearly-linear descent to the red in after hours trading. More than 1 million shares traded hands during the final minute of the day. Overall, I was surprised by how quickly the very strong market open trading with TSLA that we saw on Monday could be diminished with no news of substance. I was expecting FOMO by benchmark fund managers today to be strong, but that strength never panned out. I suspect those fund managers are just as susceptible as some newbie TSLA investors to a well-managed MMD on a strong macro day.
The Dow, NASDAQ, and S&P500 all hit records today, building upon the successful signing of a coronavirus stimulus Bill late Sunday night. A second bill, which would increase payments to individual Americans, is being considered this week and macros are up for another day in a row.
News:
* Zacks now rates TSLA as a strong buy
* This Barons article (also posted in the main thread to @Curt Renz ) tells how fund managers like to do "Window Dressing" at year end by dropping poorly performing stocks and buying the strongest performing ones. TSLA is listed as one of the strongest and one of the most likely to be purchased during year end window dressing.
Last week the market makers and hedge funds didn't push the TSLA stock price to near their most profitable closing price. Such a surprise might not happen two weeks in a row. Looking at the tech chart you can see a big triangle at the 680 strike price. Of course 700 has been purchased most of all, and so I suspect we'll see an effort to slow down the march to higher stock prices such as 680 and 700 with lots of sold call options. Also like last weekend the market may well decide otherwise.
Looking at the tech chart, you can see that the upper bollinger band has made it above 693.
Conditions:
* Dow up 204 (0.68%)
* NASDAQ up 95 (0.74%)
* TSLA 663.69, up 1.92 (0.29%)
* TSLA volume 32.3M shares
* Oil 47.71
* Percent of TSLA selling tagged to shorts: 57%
* IV 62.4, 14%
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TSLA chart above
NASDAQ chart above
Today the NASDAQ traded mostly negatively but with only small deviations, most within half of one percent. The top 100 NASDAQ companies (mimicked by QQQ) traded higher than the NASDAQ for most of the day. Here's the QQQ chart:
In any event, with low volume and with inconclusive macro movements, manipulators had an easy target for making sure that TSLA didn't get too frisky. After all, there are 680 and 700 strike call options expiring Thursday that need protection. The answer, of course, particularly with QQQ's trading, was a prolonged game of whack-the-mole. Notice the really deep dips in TSLA that resemble icicles. These dips likely had some short-selling thrown in the exaggerate the depth of the dip.
The big question is what happens as we get closer to week's end? IV is unusually low, so options will be more affordable and 4th quarter could be a good one, which in theory could reward some option buyers. Although option sellers often manipulate on weekly option close dates, Thursday will likely be the final buying opportunity before the Q4 Production and Delivery Report is released, so we could see a surprise to the up side.
This article from Barron's lists the FactSet deliveries for Q4 as 174K, a number Tesla should exceed by nearly 10K. Looking forward to next week.
Looking at the tech chart, the slow climb continues for the fourth day in a row. What's most striking, though, is the amazingly low volume we're seeing, under 23M shares traded today. I'm thinking the big funds that needed to trim did so in the big closing cross of Dec. 18, retail investors seeking to cash out have done so in the week before and week after Dec. 18, and we're left with Elon plus the index funds now holding about 40% of TSLA. Meanwhile, weak longs were shaken out or chose to cash out during the inclusion process, so we're left mostly with believers in TSLA's long-term prospects, and they want to HODL. This would not be a kind environment for a fund wanting to buy large quantities of TSLA once the next rally resumes.
Conditions:
* Dow down 68 (0.22%)
* NASDAQ down 49 (0.38%)
* SPY down 1 (0.19%)
* TSLA 665.99, up 2.30 (0.35%)
* TSLA volume 22.9M shares
* Oil 48.25
* Percent of TSLA selling tagged to shorts: 57%
* IV 59.6, 11%
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TSLA chart above
QQQ chart above
Congratulations longs on a close that is less than a panel gap away from ATH close of 695 (and these days those gaps are mighty small).
On Tuesday, the end of quarter buying finally kicked in. Whether you believe it was primarily end of year window dressing or final two buying days left before Q4 Production and Delivery numbers come out, TSLA started climbing this morning (I originally guessed 3 days left would be the beginning of quarter buying to position for the P&D report, and I go with this explanation). Once TSLA started heading up on a day with lackluster macros, FOMO started kicking in and I imagine that benchmark fund managers started buying to grab TSLA below the 695 price the index funds paid. The climb led to more buying of short-term call options, which of course led to more Delta-hedge buying by the market makers. The buying built upon other buying and made stopping the TSLA steamroller difficult or impossible to achieve.
The big question is what happens on Thursday. We saw a wall of selling lined up today at 700 and I wouldn't be surprised to see it on Thursday, too. Market makers would like to keep those 700 calls that expire this week out of the money. The upper bollinger band is just a dollar above 700. If TSLA doesn't close above 700 on Thursday it stands a decent chance on Monday when the P&D Report numbers are known, provided Tesla does indeed deliver 500K vehicles in 2020..
News:
* Deutsche Bank and Credit Suisse both raised their Tesla delivery targets for Q4 by about 10K to be close to Troy's estimates
Deutsche Bank raised TSLA price target from 500 to 705
Looking at the tech chart, notice that at long last the upper bollinger band has risen higher than 700, taking down an important obstacle for the stock price exceeding 700.
Conditions:
* Dow up 74 (0.24%)
* NASDAQ up 20 (0.15%)
* SPY up 1 (0.15%)
* TSLA 694.78, up 28.79 (4.32%)
* TSLA volume 42.9M shares
* Oil 48.28
* Percent of TSLA selling tagged to shorts: 57%
* IV 63.2, 16%
TSLA chart above
QQQ chart above
Happy New Year and congratulations on new ATH intraday and closing TSLA prices. Topping 700 on the final day of the year was the most wonderful conclusion to a very profitable year for TSLA investors.
Begin by checking out the Mandatory Morning dip on the TSLA chart above. The price 695 was way too close to 700 for the comfort of the option sellers, and so we saw an MMD. Unfortunately for them, the dip was quickly bought up, and the rally began. From about 10:20am until about 10:40am, capping or perhaps profit taking kept TSLA not far above 700, but once the stock broke free it climbed quickly.
If you wish to better understand why there was incentive to hold TSLA below 700 on Friday, refer to the max pain chart above. Look at the over 30K call options expiring Thursday at 700-strike price.
At its highest, the stock price was up over $23. When such a rise happens with relatively light volume, the market makers are busy delta-hedging (because of all the call options out there growing in value for the buyers) for the remainder of the day and we seldom see a significant dip once the steamroller starts moving forward this aggressively. Ironically, it was just as QQQ was recovering from its 2:00pm dip that TSLA started down. I suspect the NASDAQ's 2pm dip was more excuse than actual catalyst for TSLA's dip, due to this timing. Nonetheless, TSLA fell from 718 to below 699 before climbing back to 705 for the close. The only way that this type of dip will likely occur without news at such a time of day after such a strong run higher on relatively low volume is when you have market makers pushing down and exploiting an ambiguous situation. That situation was the uncertainty of how the P&D Report would turn out and such a high stock price that traders and weak longs were inclined to take profits when they saw the stock price descending. It's the old "somebody knows something" routine that spooks some investors into selling. And so I think we saw a combination of market makers trying to minimize TSLA's climb above 700 on Friday aided by some profit-taking when the day's high had clearly already been reached.
Looking at the tech chart, the FOMO leading into Production and Delivery Report weekend caused a real spike in buying during the morning which significantly exceeded the upper bollinger band. The afternoon pushdown brought TSLA just 30 cents below the upper bb. Coincidence? Take a look at this chart and see how often the stock price bounces off a bollinger band or gravitates toward it.
On Sunday Tesla provided the follow results for Q4:
Production exceeded 500K for the year by nearly 10K vehicles and deliveries fell just 450 below 500K. Altogether, it was an excellent report. Normally you would see a sell the news response when Tesla fails to outperform their goals in such a report, and that is possible. We also learned this weekend of Tesla lowering the cost of Made-in-China Model Y to a more reasonable level and some reports say that over 100K Model Ys were ordered this weekend. Rob Maurer, among others, believes the MIC Model Y news (coupled with word of expanding Model Y production evident at the Shanghai factory now) will overcome the typical sell the news response and lead to an up day for the stock on Monday. We'll see. We're coming off six green days in a row, and I can't remember the last 7 in a row. Don't be surprised for the market makers to try for a pushdown in the morning. It may be defeated by afternoon. Looking forward to the drama.
On a longer-term horizon, analysts will place Sunday's results into their spreadsheets and calculate cashflow, profits, and all those metrics. Expect some upgrades for the stock price. If @The Accountant 's calculations are close to Tesla's results at the Earnings Report in about 3 weeks we should see more upward pressure. Just as with the P&D Report, I expect some climb into the Q4 ER.
Normally, I am cautious if the stock price has risen substantially and there's no obvious catalyst ahead, because of profit-taking. Fortunately, we are likely looking at a good Q1 with such strong demand for Model Y in China and production ramping up. Q2 should be even better.
For the week, TSLA closed at 705.67, up 43.90 from last week's 661.77. Hoping you all had a great weekend.
Conditions:
* Dow up 197 (0.65%)
* NASDAQ up 18 (0.14%)
* SPY up 2 (0.51%)
* TSLA 705.67, up 10.89 (1.57%)
* TSLA volume 49.09M shares
* Oil 48.52
* Percent of TSLA selling tagged to shorts: 57%
* IV 67.3, 26%
TSLA chart above
QQQ chart above
Congratulations longs on another ATH day. I wasn't expecting Monday to be this strong, and I think the moral of the story is that you simply can't wait on the sidelines for a good catalyst to boost TSLA. You have to be in the stock, riding out the ups and downs in order to enjoy most of the ups.
Comparing the two charts above, you can see that while QQQ was relatively neutral for the first hour of trading, TSLA ran above 740 exceptionally quickly after market open. The news from China regarding Model Y could have been the catalyst that took away any ambiguity about the Q4 Production and Deliveries Report.
As late morning arrived, QQQ dipped significantly and TSLA reflected the rises and dips of the broader index through close. Volume was moderate at 47 million.
So, who was buying today? One of the best guesses would be benchmark funds trying to get in before TSLA rose too far above the 695 index fund buy-in price. Here's the complication to the theory, however:
ETF.com a few trading days ago reported 56 million TSLA shares held by ETFs. Since then, the number has dropped to 55.7 million. In other words, we saw a small outflow of TSLA shares from ETF funds, not the expected large inflow. Of course benchmark funds consist of both ETFs and mutual funds, so the recent buying could have been from mutual funds that benchmark to the S&P 500.
Georgia Election
Georgia's runoff election is Tuesday, Jan 5, and if the Democratic candidates win both seats the Democrats will effectively gain control of the Senate. As a general rule, the market prefers gridlock in Washington, so an all Democrat House and Senate plus Democratic President would be less welcomed than a split government. Further, the market doesn't like new taxes and this is another reason we could see a macro dip if Democrats sweep the Georgia runoff election. OTOH, the Democrats have big plans for EVs, and Tesla could potentially buck the macro trend if a sweep occurs.
Coronavirus
The vaccines are currently being administered, but it'll be months before we see a big effect of the vaccines upon Coronavirus numbers. For this reason, it's important to keep an eye on Coronavirus numbers until the warmer spring weather and the higher number of vaccinated citizens pull the coronavirus numbers way down.
Fortunately, the United States appears to be plateauing in December, rather than continuing the steep climbs of October and November.
Ihor Dusaniwsky reports over 40 billion in losses by TSLA short-sellers in 2020.
Looking at the tech chart, you can see the rare 7 days of positive trading in a row. Anyone for 8? The upper bollinger band, which had lost most of its climb in recent weeks is once again ascending at a good pace.Today's close was roughly $11 above the upper bb.
Conditions:
* Dow down 383 (1.25%)
* NASDAQ down 190 (1.47%)
* SPY down 5 (1.36%)
* TSLA 729.77, up 24.10 (3.42%)
* TSLA volume 47.12M shares
* Oil 47.35
* Percent of TSLA selling tagged to shorts: 57%
* IV 71.2, 37%
TSLA chart above
QQQ chart above
Tuesday was indeed an interesting day. Both QQQ and TSLA dipped going into market open but QQQ quickly jumped higher into the green shortly after open. TSLA did not, and if you look at the various icicles on TSLA's chart in early morning trading, you can see what appears to be selling in bursts to control the stock price. It didn't work and TSLA spent much of the day threatening to climb above 740.
One recent TSLA pattern we've seen often is the descent into close, which I suspect is market makers trying to deflate the stock price a bit during the low volume afternoon hours. Also common on such descent into close days is an upward spurt right at day's end. This rise could be related to the closing cross as buyers and sellers are matched for the 4:00pm trade. It turns out that 1.1 million shares traded hands during the 4:00 minute, which suggests to me that maybe some entity that had been selling to dip the price wanted to cover their daily short during the closing minute.
At about 4:20pm TSLA shot higher like it was filled with helium, and it turned out the catalyst was a price target raise to $810 by Morgan-Stanley. TSLA rose above 753 during the ascent. Expect a big gap up of TSLA in pre-market trading to account for Tuesday's after-hours rise.
Two bits of positive news suggest that Q1 (and 2021 too) will be strong for TSLA:
* from Benzinga: Tesla may already be producing 8,000 vehicles/wk in Shanghai
* from Teslarati: Shanghai Model Y may have 29.4% gross margin
With nearly 25,000 750-strike call options sold, the hedge funds and market makers will extend some effort to protect 750 this week. If volume and buying appetite rise high enough, they may not succeed.
Looking at the tech chart, today was the 8th day in a row for climbing. No wonder the market makers are getting frisky with their various manipulations. Tomorrow is likely to be day 9 of green days in a row. With the upper bb around 730, a close at 750 would place the stock price 20 above the upper bb, a somewhat perilous position if the buying slows.
Conditions:
* Dow up 168 (0.55%)
* NASDAQ up 121 (0.95%)
* SPY up 3 (0.71%)
* TSLA 735.11, up 5.34 (0.73%)
* TSLA volume 32.2M shares
* Oil 50.15
* Percent of TSLA selling tagged to shorts: 62%, according to www.shortvolumes.com
* IV 66.9, 25%
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Interesting. This site reports it was 62%: Daily short sale volume percent for stock ticker TSLA is 62% on Jan 05, 2021 (shortvolumes.com)
While @Artful Dodger reports it as 59%:
So plenty of shorting going on.
@MP3Mike , thanks for the link. We'll use shortvolumes.com for our short percentage of selling number going forward if shortvolume.com doesn't resume printing it. I have made a change to Tuesday's "Conditions" to reflect the number.
pz1975
Active Member
I think you should also put a brief description of what "Percent of TSLA selling tagged to shorts" actually means next to the number in your posts. It hasn't been discussed in a long time and some people probably think it means that the x% you list is the actual % of short sales/covers among all trades for the day rather than the % of large blocks of trades that include at least one transaction with a short sale/cover (I think that's correct but I might be off).
TSLA chart above
QQQ chart above
Congratulations longs on a new ATH that exceeded 750. We live in interesting times.
Macros were influenced in pre-market trading by expectations of two Democrats winning senate seats in Georgia. Expected tax increases and more regulations were the negatives that the market saw, but a successful passage of a $2000 per person stimulus package with a change in senate majority leadership was the positive implication. Sector rebalancing to companies most likely to benefit from higher stimulus payments resulted in a gain for the Dow. Expectations of higher taxes and outflow to other sectors hurt the tech companies today with Apple down 3.3%, Amazon down 2.5%, and Nvidia down 5.9%. Tesla was generally stronger than the NASDAQ, even considering the Morgan-Stanley boost to TSLA from Tuesday's after-hours action, so I would guess the implications of a Democrat majority in the senate was a net positive for TSLA.
TSLA exceeding 773 was an impressive accomplishment on a day with negative macros. Alas, the market makers were waiting for their chance and it came after 2pm when the broader indexes began to slide. You can see a much steeper slide in TSLA. Normally, such slides do not happen after such a significant climb on low to moderate volume because the market makers are busy buying shares to catch up with their delta-hedging before market close. Since the option sellers had much to lose from TSLA closing this week well over 750 (see the 25K+ 750-strike calls expiring Friday in the chart below), they went to work adding steroids to the macro-related dip. Fortunately, TSLA recovered some of that dip in the hour leading up to close.
Nearly 1.5 million shares traded hands during the 4:00pm minute. These aren't the kind of trades that retail investors make.
ETF.com is stuck on 55.6M shares of TSLA held by ETFs. I'm disregarding this site going forward. Surely we're seeing significant buying by benchmark funds. What's also notable is the low to moderate volume we've seen in this strong rally over the past two weeks.
Despite Wednesday's violence in Washington, as of the time this post was written, futures were up.
Meanwhile, I suspect this price target increase was related to the Democrats gaining the senate, and I wonder if there are more upgrades to come. The sector upgrade was my clue.
Looking at the tech chart, you can see 9 green days in a row. This is extremely rare and for this reason the market makers might just get their 750 back before Friday's close. Then again, maybe not.
Conditions:
* Dow up 438 (1.44%)
* NASDAQ down 78 (0.61%)
* SPY up 2 (0.56%)
* TSLA 755.98, up 20.87 (2.84%)
* TSLA volume 43.68M shares
* Oil 50.39
* Percent of TSLA selling tagged to shorts: 59%
* IV 70.8, 35%
Regarding the concept "Percent of TSLA selling tagged to shorts":
Only a small portion of the short-selling during a day is related to shorts adding to short interest. In fact, short interest in terms of shares held has continued to decrease for the past couple weeks even though percent of selling by shorts has remained pretty solidly between 55% and 60%. Here is why the numbers are so big:
* Sometimes, many stock sales are batched together on the ticker. If that batch contains even a single short-sell, the entire batch of selling is tagged short and all are counted as short sales.
* We may be experiencing 50% or more of the trades taking place in a day being the work of high speed trading. Algobots have been let loose on the markets to perform various routines and reactions to events in order to make small amounts of money a huge number of times every day. Some of these routines involve short-selling. Typically the short-selling is covered before day's end, and often very quickly after it has been used.
* Market makers and hedge funds sometimes use short-selling to manipulate the stock price through various techniques including the recently popular push-down into close. Again, they like to close their short positions by day's end to avoid exposure to events that could transpire before market open the next day.
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TSLA chart above
QQQ chart above
A big congratulation to all of you HODL investors who hung in there to enjoy a second visit to 800 within a year (but with 5 times as many shares). Yep new ATH once again.
What we saw was more sector redistribution. Whereas the Dow was hotter than the NASDAQ yesterday, some of that money came back to the NASDAQ today, especially to stocks that investors feel will do well under the Biden administration. TSLA clearly was one of them, but not the only one (NVIDIA was up 5.78% and AMD up 5.35%).
Much of the market's exuberance was over developments in Washington that point to an orderly transition of power ahead.
After TSLA's nearly 8% climb on Thursday, strong after-hours buying brought TSLA above 10%. For much of the early afternoon TSLA was pinned at 800, but after a short dip that was defeated TSLA climbed free of 800 by a good margin. Missing from TSLA trading on Thursday was the type of market-maker induced pushdown after 2pm that we've seen throughout the week. Perhaps the higher (51 million shares traded) volume made the stock price less resistant to a push-down, and looking at QQQ, which was so steady and strong today, there was nary an excuse for a push-down. In any event, the option-sellers appeared to have trouble completing all their delta-hedging during market hours, and so I agree with @generalenthu that the climb in after-hours session was likely market makers completing their delta-hedging after the strong day of climbing.
Notice the rise about 5 minutes prior to close. I suspect that was when it became apparent that buyers outnumbered sellers for the closing cross. Nearly 673K shares traded hands in the 4:00pm minute and when market makers came up short on the shares they needed, the after-hours climb ensued.
News:
* Market Insider- 'Don't sell a share': Billionaire investor Chamath Palihapitiya says Tesla's stock could triple
* Elon Musk passed Jeff Bezos to become the planet's wealthiest person. His response was classic:
Thursday was green day 10 in a row for TSLA. Meanwhile, the stock price has jumped about $38 above the upper bollinger band. I'm guessing it comes back to the band within 2 days.
Conditions:
* Dow up 212 (0.69%)
* NASDAQ up 327 (2.56%)
* SPY up 6 (1.49%)
* TSLA 816.04, up 60.06 (7.94%)
* TSLA volume 51.5M shares
* Oil 50.94
* Percent of TSLA selling tagged to shorts: 60%
* IV 78.2, 55%
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Over the past couple days I've been trimming a few Tesla deep in the money call options, just to make sure I have all the funds I need for the next year should we see a dip after this buying streak subsides. The vast majority of my TSLA holdings are in for the long run, though. Each person needs to make a decision that's appropriate for their own needs. Since my livelihood is dependent upon income from investments now, I have found the sweet spot where I am okay if the stock continues up strongly or if it dips. I sleep well at nights, knowing I have this balance.
Someone who is younger, not trading from an IRA, and still has not reached financial independence would probably do best simply letting it ride for the long run. Analysts for the most part have been predicting less than 30% annual growth, which is way too conservative. Much appreciate still lies ahead in the years to come, provided macros don't do something funky, and even then there will be a recovery in time.
Someone who is younger, not trading from an IRA, and still has not reached financial independence would probably do best simply letting it ride for the long run. Analysts for the most part have been predicting less than 30% annual growth, which is way too conservative. Much appreciate still lies ahead in the years to come, provided macros don't do something funky, and even then there will be a recovery in time.
Sparky
Member
My core shares are in two regular stock accounts. I've only added shares to those over the years since 2013 when I made a large (for me) purchase after ordering and then test driving a Model S.
I didn't start getting calls/emails from new "account managers" until 2019, offering their "help".
My "trading" shares are from an IRA. They are less than 50% of holdings and I spent years trying to time the volatility and slowly buy dips and sell tops. It was a lot of work, and I have a job; netted maybe another 15% shares over 4 years. I could have retired a few years ago but I enjoy my work. I haven't sold any TSLA in many months; and bought only small amounts.
It might be prudent to sell some soon.
My long term investing approach was based on two of my favorite words: Passive & Income.
Lately, I've come to appreciate the words Golden & Handcuffs more and more. Letting it ride for now.
TSLA chart above
QQQ chart above
Anyone for 880 and 5 consecutive All Time High closes in a row this past week? Congratulations!
Friday's trading, with its nearly $64 gain, was both breathtaking and surprising, given that the most recent catalyst for the climb for the $810 price target that Adam Jonas posted. It came right after Thursday's $60 gain. I think we have FOMO buying from benchmark funds that realized they have missed the boat on the short dip after S&P500 inclusion.
Here's how things shook out. The NASDAQ had a good day, up about 1%. Looking at the QQQ chart above and it's close of up about 1.3% you realize the changes in QQQ (and NASDAQ) were rather mild, and yet you see TSLA affected disproportionately by these minor macro swings (as @Artful Dodger pointed out in the main thread). My thought is that the market makers seldom see a macro dip they won't exaggerate in TSLA on an option-close Friday if they can get away with it. Clearly, this week was painful for option-sellers, but it does look like they completed their hedging by market close, judging by the level after-hours trading for the first two hours and also by the only moderate trading volume in the 4:00pm minute.
Most days this week, the option sellers started a dip into close at around 2pm, but Friday's dip was begun early to coincide with the NASDAQ dip. Please look at the orange volume indications at the bottom of the TSLA chart to see how noticeably volume typically diminishes going into the late afternoon. I think the idea of a 2pm dip is that it's late enough in the day that it can often be sustained into close (in theory). Unfortunately for the market makers, as the macros started recovering after 2pm, so did TSLA and it reached this very high price.
Thanks to one of our regular posters in the main thread, you can compare on this Level II chart the willing sellers vs. the willing buyers and the needed prices. The past two days were a case of simply more potential buyers than sellers and so the stock price had to rise in order to find equilibrium. I can't ever remember seeing a Level II chart with this strong a bias toward buyers.
My feelings at the moment is that short-term, TSLA has been riding upwards on momentum and has outclimbed the bullish price targets. That typically suggests to me that we're reasonably close to a local high. Friday's higher volume also supports a feeling that the stock is overheating a bit. Local highs are a time to take some gains if you perceive to need those funds within the next 6 months or so. Volatility is inevitable. For 2021, Cathie Wood of ARK Invest is generally bullish on the economy in this recent video, although she expects a correction at some point.
Nonetheless, the vast majority of my IRA will remain in TSLA for the long run. There's just so much addressable market, Tesla enjoys good margins as it continues to pull away from the competition, and TSLA is expanding the scope of the company into energy and other areas. Even when there comes the inevitable dip, with Tesla's excellent gross margins and with it's 50% annual growth, the company has lots going for it when it comes to climbing out of dips along the way.
For those of you who have been investing in TSLA for many years now, you remember the agonizing plunges and the sometimes year or more needed to reclaim an ATH. I think back on charts of cash flow and EBITDA as the various new car models were introduced and we saw a dip into the negative with each of these prep for introductions except for Model Y's. The stock price overreacted to this planned cadence. Elon was correct: Model 3 was indeed the last bet-the-company new vehicle. As long as Tesla can get the yields up and start scaling the new 4680 batteries with DBE during mid 2021, we're not going to have to ride that roller-coaster of the bad old days. Q4's earning report will be far better than anything that came before, and with the Shanghai Model Y production cranking up, Q1 2021's performance will no doubt be a nice improvement over Q4's. Throw in revenue from Full Self Driving features complete sometime soon and you have the making of a great quarter. Please forgive me for trimming a few TSLA holdings in my tax-free account approaching a perceived local high, it's an old habit from an earlier day.
If you look at the only four U.S. companies with higher market cap than Tesla (Apple, Microsoft, Amazon, and Google), their shareholders have all done great with HODL and TSLA investors will too, now that the company has entered into a solid-profit with high growth phase.
For the week, TSLA closed at 880.02, up 185.24 from last week's 694.78. Not bad. That's an increase of better than 25% in the first week of 2021. Hoping you had a great weekend!
Conditions:
* Dow up 57 (0.18%)
* NASDAQ up 135 (1.03%)
* SPY up 2 (0.57%)
* TSLA 880.02, up 63.98 (7.84%)
* TSLA volume 75.1M shares
* Oil 52.53
* Percent of TSLA selling tagged to shorts: 60%
* IV 91.4, 71%
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TSLA chart above
QQQ chart above
After 11 consecutive green days and a massive rally that caused TSLA to exceed the Adam Jonas $810 price target by $70, TSLA did what it usually does when the buying pushes the stock price way above the upper bollinger band without news to support the move, Tesla had a down day. Comparing Friday's up day to Monday's down day, in each case TSLA moved 7.8%. What differed was the volume: 75.1M on Friday and 59.6M today.
Macros contributed to TSLA's fall Monday, with the NASDAQ down 1.25% and the Dow down only 0.29%. Looking at the QQQ chart above, you can see that after the initial open bell dip, QQQ climbed ever so slightly until after 1pm when it took a downward trajectory. In contrast, TSLA saw an exaggerated Mandatory Morning Dip that coincided with the QQQ dip. When that dip was bought up, TSLA started a slow but pretty-much linear descent until slightly before close. TSLA closed down more than 6X the NASDAQ loss on Monday, suggesting there was much more than reaction to macros at stake. Some considerations:
* Profit-taking: Monday's dip inspired some investors to take profits after the strong climb these past few weeks. Fear of the descent continuing for multiple days (like it did in the bad old days) would add incentive to take profits early in the descent. The linear descent could be a sign of some big investment houses selling through programmed algos to readjust their TSLA holdings to keep the value below certain parameters, sort of like what ARK Invest does. Such adjustments are entirely possible after such a spirited run higher for the stock.
* Mischief by market makers and hedge funds- Because of the recent run up and run beyond the 810 price target that got the most recent leg of this rally underway, TSLA was vulnerable to a manipulated push down. That manipulation would not only make option sellers more profitable, the process of pushing down with short-selling and then covering that short later in the day at a lower price is itself a profitable enterprise. The linear movement of the stock price on Monday suggests algobots working a strategy on the stock.
So, when does TSLA turn positive again? This rally has been unprecedented in many ways, which makes guesses more difficult. Some possibilities:
* When TSLA descends to 810 or below, it will once again be below the target price which began the recent enthusiastic leg of the rally. Bank of America has give TSLA a $900 price target which could reduce the $810 target's relevance. BofA carries far less credibility on Wall Street than Morgan Stanley, though.
* After three red days- In earlier times, we often saw a downward reversal run for 3 days before a positive day intervened. Such runs downward are less likely now than before, however.
* Upon the arrival of good news- Should Tesla announce this week that the Q4 Earnings Report will be on Jan 20 (not likely), investors may start loading back up for the ER, due to the excellent production and delivery numbers. Should we hear the 27th, that's a week earlier than Wall Street is expecting, and such a date could become a bit of a catalyst. Good news could also come in the form of an announcement that production of Models S and X has resumed and that the design update is complete.
* With help of macros- If one takes the view that descending macros are the excuse that allows market makers and hedge funds to manipulate downward as was not possible on strong climb days, positive macros would remove that excuse. As of Monday evening, macro futures are up somewhat.
Bottom line: We have an unusual combination of forces working on TSLA at the moment: record high stock prices last week, shareholders far less inclined to flinch, a possible resurgence of benchmark fund buying, and especially volatile politics in Washington. If you have dry powder and are planning on some buying, stay alert.
Note: Troy's numbers have been removed from this post by request.
Looking at the tech chart, TSLA's price is a comfortable $26 below the upper bollinger band.
Conditions:
* Dow down 89 (0.29%)
* NASDAQ down 166 (1.25%)
* SPY down 3 (0.67%)
* TSLA 811.19, down 68.83 (7.82%)
* TSLA volume 59.6M shares
* Oil 52.17
* Percent of TSLA selling tagged to shorts: 57%
* IV 88.3, 65%
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TSLA chart above
QQQ chart above
Haha, I love days like Tuesday when we're looking at a whole new set of forces working on TSLA's price and a deviation from how things worked in the past allows us to better understand how things have changed. Supposition #1: benchmark funds are still feeling the pressure of loading up on TSLA so that it's something like 1.6% of their portfolios. Supposition #2, current investors are not inclined to sell very easily, suggesting hard-core long-term HODL investors are a higher percentage of TSLA investors than before. Such an attitude discourages momentum dips (3 days in a row).
On Monday the stock dropped as expected, and the fund managers sat back and allowed it to drop. They were waiting for it to bottom out before starting to buy, just as they did after S&P500 inclusion (perhaps because J.P. Morgan convinced them that TSLA was ridiculously overvalued). In any event, the more people who are ready to buy when a stock bottoms out, the shorter the drop to "bottoming out" because once the dip hesitates, it's just too easy for that hesitation to turn into a climb with eager buyers watching it. Once futures turned green, we saw TSLA climbing in pre-market trading, and that's all it took. As I write late Tuesday night, futures are up again and the downward momentum has been broken for now.
I did some light rebuying Tuesday morning, but the sale price was not such a bargain by then, due to activity in pre-market trading. In retrospect, if I would like to get back into a couple leaps in a situation like this (I trade in an IRA, so taxes from buying and selling are not a consideration) I would buy a couple hundred shares in pre-market to capture most of the likely rise and then sell the shares and buy the leaps at my leisure later in the day.
Obviously, Jan 15 will be options expiration for a long, long period. Most strike prices below 800 are dominated by puts. Notable exceptions are 820, 850, and 900 (before everything turns green). I think it's no coincidence that TSLA closed just below 850 today. I suspect that will likely be the market makers' preferred Friday's close, but there's no guarantee they can stop TSLA, given the buying pressure on good macro days.
Looking at the tech chart, you can see one explanation for Monday's dip and Tuesday's rise. Friday's trading departed too far above the upper bollinger band on no news of merit, and Monday's dip was the exaggerated correction. Tuesday's climb brought TSLA back to following the upper bb again. The closing price looks to be about $9 below the upper bollinger band, so there's room for another positive day ahead, though I would suspect it'd be more subdued than Tuesday's.
Conditions:
* Dow up 60 (0.19%)
* NASDAQ up 36 (0.28%)
* SPY up 0 (0.02%)
* TSLA 849.44, up 38.25 (4.72%)
* TSLA volume 46.3M shares
* Oil 53.37
* Percent of TSLA selling tagged to shorts: 58%
* IV 86.3, 63%
TSLA chart above
QQQ chart above
Ho hum, today's just another day in the battle for 850 this week. You see that tiny second micro-dip on QQQ about 10am? That was the apparent excuse for the big 10am descent of TSLA well into the red (I don't have the timing for the MCU recall story). Just as quickly, approaching 2pm, buyers saw that TSLA was recovering rather than running lower and bid the stock back into the 850s.
Relatively low volume (32.4M shares traded) today allowed TSLA's option sellers an easier time of pulling off some manipulations.
Personally, I think consolidation near 850 would be very healthy. If TSLA is too super-heated going into the Q4 earnings report (date still unknown), then the chances of a sell-the-news response by the market increases. Consolidation would help cement the belief that TSLA belongs at this price (or higher) and we'd likely see more analysts playing catch up with price target increases.
As this report was written, futures were mixed, with NASDAQ futures down slightly. Lets see what mischief the option sellers can create if macros are a bit down on Thursday.
News:
* Reuters reports that the NHTSA has asked Tesla to recall 158,000 Models S and X with the MCU failure problems.
* Tesla reports that Model Y has achieved perfect 5-star safety rating (note: this story should more than compensate for MCU problem story if a competent investor is reading the two)
* Electrec reports that Tesla could be a $2 Trillion company in 1-2 yrs, according to highly-rated analyst Dan Ives
Looking at the tech chart, TSLA is comfortably (about $24) below the upper bollinger band.
Conditions:
* Dow down 8 (0.03%)
* NASDAQ up 57 (0.43%)
* SPY up 1 (0.27%)
* TSLA 854.41, up 4.97 (0.59%)
* TSLA volume 32.4M shares
* Oil 52.91
* Percent of TSLA selling tagged to shorts: 59%
* IV 85.2, 62%
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