Papafox's Daily TSLA Trading Charts

[Papafox]

TSLA chart above

QQQ chart above
Looking at the TSLA trading chart we see a wild ride on Friday with variations throughout the 750s. Notice the two strong dips, one bottoming near noon and the other closer to 3:00pm that were unrelated to the macros. Hmm, seems like continued buying pressure this week was buying up the dips and pushing toward 760 and then the market makers put in another push to protect 760 and haul the stock price down to 750 for the close. Who could possibly have expected such action?

The volatility of the week was of course related to the triple-witching option expiration on Friday tossing out a low 700 max pain number, the market makers making their best effort to push down on Monday and approach that number for maximum gains, improving Tesla sentiment (including Tweets from a big dog investor buying 1.2 million TSLA shares) placing upward pressure on the stock price, and buyers diving in to buy any dips.

With the NASDAQ down 0.91%, TSLA's gain on Friday shows real strength for the stock.

Volume was a hefty 25.8 million shares on Friday, but look at the opening minute (1.4 million shares traded) and the closing minute (14 million shares traded) and the remaining minutes were actually fairly low volume.

News:
* SpaceX mission with Inspiration4 crew on board safely returned to earth on Saturday. Thanks to a fund-raising effort with St. Jude Children's Hospital and a series of Netflix videos looking at the crew and their preparations to enter space, there's been much social and mainstream media attention on this flight. A safe return allows Tesla to benefit from Elon Musk's halo, even if this is another company. Then there was the "one more thing" of Tesla creating the cupola enormous glass dome that allowed the ultimate view of earth from a spaceship. Finally, Elon Tweeted that he would contribute $50 million to the fund raiser. These events help Elon's perception of competence and generosity, which leads to positive sentiment towards Tesla, as well.

* Dave Lee on Investing released this youtube video on Sunday which explains why his expectations for Tesla's long term future have increased substantially. His enthusiasm revolves around the significant addressable markets for upcoming Tesla products and a timing of these products so that when automotive revenues are peaking the other enterprises are still expanding.

A week ago on Sept 10, the stock price and max pain numbers came very close together for weekly expirations. For Friday, Sept. 17, the dip to the triple witching 700 max pain caused a big gulf between price and max pain, and buying pressure throughout the week only widened as we approached Friday close and options expiration. The inability of market makers to control Tesla's price this week, even with some days of low volume, suggests the strength may continue and could accelerate this coming week.

Rising yields on 10 year treasury bond yields could be one of the few negatives for TSLA in the coming week if the trend continues

The max pain chart for Friday, Sept 24, shows puts dominating through 740 and calls dominating from 750 and above. It's a pretty clean chart with max pain currently at 745

Coronavirus Update:

The Daily New Cases chart for the U.S. shows a decline for the second week in a row, suggesting that this Delta variant surge may have peaked. For this reason, the market should not be freaking out about Covid this coming week (unless we see some big change). Let's check back next week and see if the trend continues.

After 5 days of positive trading, TSLA has steepened its climbing trajectory. Nonetheless, with this many positive days in a row TSLA is ready for a red day within the next couple of trading sessions, most likely. Max pain at 775 gives lots of headroom for a 760 capture. The trend so far has been testing a price that ends in "0" several times before eventually exceeding that price. If the pattern remains, this should be the week that TSLA tops 760.

Where to from here? Futures are down Sunday evening, so the markets won't be helping TSLA, but the stock is capable of climbing even when the NASDAQ is doing poorly, so I take a wait and see attitude toward Monday. I continue to believe Q3 Production and Delivery numbers will be good and that the Earnings Report will be even better. So do other investors, judging by TSLA's recent strength. The climbs so far have been restrained enough so that there's little incentive for investors to sell prior to Q3 results.

For the week, TSLA closed at 759.49, up 23.22 from the previous Friday's 736.27. That's a gain of 79.15 over the past 4 weeks. Hoping all of you have had a good weekend.

Conditions:
* Dow down 166 (0.48%)
* NASDAQ down 138 (0.91%)
* SPY down 4 (0.97%)
* TSLA 759.49, up 2.50 (0.33%)
* TSLA volume 25.8M shares
* Oil 71.97
* IV 36.3, 1%
* Max Pain 700

 

[Papafox]

TSLA chart above

QQQ chart above

Please cancel all expectations for Monday's trading. New reality: the macros were in the toilet.

Looking at overseas exchanges, the Hang Seng Index traded in Hong Kong was off 3.3% on Monday on word that property developer Evergrande was in serious trouble. American banks have little exposure to Evergrande, this issue should not seriously affect the U.S. economy, and yet the the NASDAQ closed down nearly 2.2%. Stocks that were especially battered were Chinese auto stocks, with U.S. auto stocks also feeling the pinch (see below).

Meanwhile, the fed is meeting on Wednesday to determine the taper and other issues, and some observers such as Gary Black suggest the Fed might be more careful about the taper should the stock markets be in turmoil. The conspiracy theory side of me wonders if the hedge funds purposely enhanced Monday's dip in U.S. exchanges with the hope of making money from the dip and also affecting the Fed's decision come Wednesday. If that was the case, then we would have seen a quick uptick in the stock price just prior to close as they covered their short positions. Hmm...

Tesla's decline at less than a 2X multiple looks reasonable, given that many other growth stocks were down similar amounts on Monday. Consider, though, that TSLA actually climbed on Friday even though the NASDAQ was down nearly 1% and market makers were doing their best to sink the stock price. TMC's @Artful Dodger pointed out the visible downward spikes in the Monday TSLA chart. I suggest that those spikes are likely the result of the hedge funds doing their normal short-selling on a TSLA dip and covering at the bottom. I fully expect the pirates to have been doing similar manipulations on other stocks as well.

Keep in mind that we're now 10 days out from the end of Q3. We can weather this storm.

News:
This Electrek article says that the NTSB (which has no enforcement capabilities) is calling Tesla's Full Self Driving Beta "reckless and irresponsible". They're even upset about the product's name. Maybe they want "not full self driving" or "wanna be full self driving". Don't they realize the name must be appropriate for the finished product, not the beta test product?

A drop in yields for 10 year treasury bonds was one of the few positives of Monday

One amazing change between Friday's and Monday's max pain chart was the 700 strike puts growing to 80K plus. Much of the buying could be by investors worried about the effect of macros on this week's stock price while other buying could simply be speculators hoping for one more day of dip in which they could turn a quick profit on the purchase and quick sale of these puts.

Nonetheless, Max pain moved up to 745 on Monday morning and we still have a clean line between the puts and calls, suggesting that the market makers would like the stock price to drift higher as the week progresses.

The shortvolume.com site has been down for some time but is back up again in time to show percentage of selling by shorts climbing to nearly 50%.

Now that the 5 green days in a row have been broken by a red day we're ready to resume climbing if macros smile. Since TSLA does not appear to be demand constrained at this time, some potential weakness in the China market should not terribly affect the company's future.

Overall, I think TSLA's dip on Monday was overplayed and I'm looking for recovery as the week progresses.

Conditions:
* Dow down 614 (1.78%)
* NASDAQ down 330 (2.19%)
* SPY down 7 (1.67%)
* TSLA 730.17, down 29.32 (3.86%)
* TSLA volume 24.4M shares
* Oil 70.70
* IV 44.8, 13%
* Percent of TSLA selling tagged to shorts: 50%
* Max Pain 745

 

[Papafox]

TSLA chart above

QQQ chart above

Please pardon the brevity but time was really limited throughout today. As expected, we saw some recovery from Monday's close. Looking forward into the week, much depends upon Feds announcements following their meeting. The week after that is the lead-in week to Q3 Production and Delivery report, which should give upward push to the stock price.

Max pain remained at 745 on Tuesday. At 730 strike calls slightly exceed puts, and so the transition from puts to calls is a bit lumpy. Notice that the big Put wall at 700 declined by some 20K contracts compared to Monday's max pain chart.

Looking at the tech chart, you can see a further bounce on Tuesday from Monday's lows.

Conditions:
* Dow down 51 (0.15%)
* NASDAQ up 32 (0.22%)
* SPY down 0 (0.09%)
* TSLA 739.38, up 9.21 (1.26%)
* TSLA volume 16.0M shares
* Oil 70.56
* IV 40.2, 9%
* Max Pain 740

 

[Papafox]

TSLA chart above

QQQ chart above

Day two of time constrained- no time to review other TMC posts
Two pieces of information buoyed the markets on Wednesday: encouraging word about Chinese developer Evergrande and calm words from the Fed with no change enacted at this week's meeting (but tapering of bond buying likely to be announced in November). As a result, both the Dow and NASDAQ closed up 1% for the day.

TSLA, OTOH, closed up 1.7%. We saw TSLA descend nearly twice as quickly as the NASDAQ during Monday's Evergrande overreaction, but unfortunately TSLA has not climbed at close to 2X the NASDAQ's gains during this week's recovery. Wednesday's 1.7X multiplier on the NASDAQ's gains is a refreshing change.

Part of the reason for TSLA climbing sub 2X from the NASDAQ's climbs is that the stock is being worked by those entities that sold options and wish to maximize gains this week. You can see the capping at 750 today, and such capping takes a toll on the day's climb. Fortunately, TSLA blasted through the 750 cap Wednesday afternoon and closed nearly $2 above. Such a defeat of the market makers is a bullish sign.

Word from the Fed didn't cause fears of inflation and the 10 year treasury yields remained calm on Wednesday

Max pain shows 735

Conditions:
* Dow up 338 (1.00%)
* NASDAQ up 150 (1.02%)
* SPY up 4 (0.98%)
* TSLA 751.94, up 12.56 (1.70%)
* TSLA volume 15.1M shares
* Oil 71.97
* IV 36.3, 1%
* Max Pain 735

 

[Papafox]

TSLA chart above

QQQ chart above
Thursday is day 3 of time constrained effort. I have been unable to read the TMC posts for most of this week.

Thursday was the second day in a row with strong macros, following the Fed statements. The negative of the day was a big jump in 10 year treasury bond yields (see chart below). Gary Black gave that jump as the reason for TSLA's weak performance relative to the NASDAQ, but I of course have a different take. If growth stocks were indeed negatively impacted by the 10 year treasury yield jump, why then did ARKK close up 1.04% and Nvidia up 2.47%?

The noon dip suggests manipulation if you compare with QQQ or the NASDAQ, but there was also a similar noon dip with ARKK, which suggests something related to growth stocks. Perhaps it was the second leg of the day's increase in treasury bond yields, giving some credibility to Gary Black's theory, but why then did ARKK gain more than 4X as much as TSLA?

My explanation? From the max pain chart below you can see nearly 20K call options at 750, 760, and 780, all expiring on Friday. Market makers want to see TSLA close at least a penny below 750 on Friday and certainly don't want to see TSLA gallop above 760. For this reason you saw capping throughout the day as TSLA approached 755. The stock is positioned for a pushdown to below 750 should macros and news permit. Volume of less than 12M shares made the manipulations easy.

Thursday saw a big jump in the 10 year treasury yields. What's interesting is that we didn't see this jump on Wednesday when the Fed discussed their plans going forward.

Max pain on Thursday was 740. The chart above shows puts solidly dominating up to strike 740 and calls solidly dominating from 750 on up. The assumed behavior of the market makers would be to manipulate for a close between 740 and 750 on Friday. Notice how there is absolutely no indication that TSLA will get anywhere near to 700 on Friday's close, but look at that massive mountain of puts at 700 strike.

Looking at the tech chart, TSLA has now recovered most of the losses from Monday's big dip. The way the manipulation is played is that TSLA descends at a 1.7X multiple of the NASDAQ on the way down and rises at less than a 1X multiple on the way up. The daily results look believable but if you see the pattern repeated again and again you can focus on the effects of the manipulations instead of being blinded by the believability of the daily movement. The good news? TSLA eventually finds its way to a fair valuation, but it's hard to time.

Conditions:
* Dow up 507 (1.48%)
* NASDAQ up 155 (1.04%)
* SPY up 5 (1.22%)
* TSLA 753.64, up 1.70 (0.23%)
* TSLA volume 11.8M shares
* Oil 73.26
* IV 36.9, 3%
* Max Pain 740

 

[Papafox]

TSLA chart above

QQQ chart above

Last Thursday TSLA was a lackluster performer, eaking out only 1/4 of the NASDAQ's gains that day on low volume of less than 12 M shares. I was expecting the market makers to do the usual Friday pushdown to place TSLA at least a penny below 750. Alas, I was in for a pleasant surprise as volume picked up about an hour after open and with some minutes trading above 100K shares, TSLA zoomed above 760 then continued climbing to close and beyond. Volume was 21.4M shares and the stock price rose 20.75.

Interpretation? Investors have been warming up to TSLA in recent weeks and as the end of Q3 nears evidence suggests that deliveries will be good despite Elon's warning about supplier issues. As TSLA showed a strong climb on a Friday morning, some fence sitters figured it was time to join in and so the volume greatly increased with serious buying. Part of the morning climb may have been related to Leo KoGuan or another investor whom he had inspired with this Tweet from Thursday:

You may remember the quick run higher of TSLA into close on Sept. 14, which I suggested may have been a shot over the bow to warn market makers about manipulating this stock. Friday's buying may have been a more serious response. Leo's very public TSLA buying serves a purpose because it helps the stock get through some of the resistance prior to reaching a new All Time High. Traders take notice when a stock hits a new ATH, and he could be setting us up for a larger rally. Who knows.

Thanks again to @JimS for the latest max pain vs. stock price chart. You can see how earlier this week the max pain number rose while the stock price fell, setting the stock up for a particularly profitable week again for the market makers. Alas, for the second week in a row we saw significant divergence of the two numbers on Friday, which is a big change for most of the summer's trading. Remember how I suggest paying attention to "dings"? Two Fridays in a row when the market makers are thwarted in their efforts to align with the max pain number rates in my mind as a serious ding. When manipulations start to fail, good things often follow for us long investors.

Yields on 10 year treasury bonds are edging up toward 1.5%, which could make Wall Street nervous this week if the trend continues

Here is the coming week's max pain chart. The transition from put to call dominance is right around 750, which is the new max pain number.

Meanwhile, with a put to call ratio of high than 3.6, we see one of the most uneven max pain charts I've ever witnessed. Such a high ratio occurs when far more investors are betting on a dip rather than a climb by Friday. They could be wrong.

Coronavirus Update

For the third week in a row, we've seen significant drops in new cases of Covid in the U.S.

Looking at the tech chart, Friday's climb even exceeded the upper bollinger band. Notice how convincingly the blue 50 day moving average has pulled away from the red 200 day MA.

This past week's TSLA performance was significant because the stock closed above the April peak.

For the week, TSLA closed at 774.39, up 14.90 from the previous Friday's 759.49. That's a gain of 94.05 over the past 5 weeks. Not bad at all. Hoping you enjoyed your weekend. Looking forward to the coming weeks of trading. For Monday, are the market makers (with the help of hedge funds) going to try punishing the feisty longs or are we going to see more buying to load up prior to Q3's Production and Delivery report? Stay tuned.

Conditions:
* Dow up 33 (0.10%)
* NASDAQ down 5 (0.03%)
* SPY up 1 (0.16%)
* TSLA 774.39, up 20.75 (2.75%)
* TSLA volume 21.4M shares
* Oil 73.98
* IV 38.6, 7%
* Max Pain 745

 

[Papafox]

TSLA chart above

QQQ chart above
Bulls prevailed on Monday as the unravelling of TSLA's Mandatory Morning Dip led to a strong climb that didn't even blink going through 780 on its way to nearly 800. The stock price hesitated near 790 as some big dog investors likely shied away from buying in above the upper bollinger band. Nonetheless, TSLA rose anyway and after being held at 795 for some time inched further to flirt with 800 briefly.

Again, I am suggesting that Leo Koguan's and a few other big bulls' efforts and significant buying made a difference and got the ball rolling toward a rally. Once TSLA starts climbing, algos and momentum traders jump in and the escalator ride just speeds up. Crossing above 800 would be a big psychological boost to longs, but we may have to wait a few days for the upper bollinger band to rise (and thereby make buying more palatable for big investors). With the quarter ending on Thursday, there's limited time to load up on TSLA before the Q3 Production and Delivery Report.

I think the mandatory morning dip and the capping at 790 showed that the market makers were at least trying to keep TSLA from running away on Monday. Alas, 21.4 million shares traded hands on Monday, which made manipulations significantly more difficult. Notice QQQ's end of day dip of about a third of a percent, going into close. Now check out TSLA's dip and you'll see something 3 to 4 times as powerful on a day when TSLA looked to be disregarding broader market trends. I think chances are good that the end of day dip was indeed a manipulation to minimize TSLA's climb for the day.

News:

The results of Germany's recent election will favor the transition to EVs, according to Alex

10 year treasury bond yields crept even higher on Monday, threatening to climb above 1.5%. Continued upward movement in yields will have some negative effect upon growth stocks and might be part of the reason why NASDAQ futures were down Monday night.

Max pain is at 745, but as we've seen with this positive sentiment toward TSLA as the company heads toward the end of Q3, with enough positive sentiment there's often enough upward pressure on the stock price to keep the price and max pain significantly separated come Friday close. Meanwhile, the mountain of puts at 700 strike has just about doubled to nearly 120K. Out of curiosity I looked at the price of these puts and they're running about $3.37/share for expiration this Friday.

Looking at the tech chart, the stock price is currently about $12 above the upper bollinger band. Normally a combination of moderating or falling stock price and rising upper bb brings the price back within the bollinger bands with a day or two. If the upper bb can rise above 800 before week's end we might have a shot at climbing above that number.

Conditions:
* Dow up 33 (0.10%)
* NASDAQ down 5 (0.03%)
* SPY up 1 (0.16%)
* TSLA 774.39, up 20.75 (2.75%)
* TSLA volume 21.4M shares
* Oil 73.98
* IV 38.6, 7%
* Max Pain 745

 

[Papafox]

TSLA chart above

QQQ chart above
Macros tanked on Tuesday as the yield on 10 year treasury bonds topped 1.5% (who could have seen this coming??). The surprise of course wasn't the slight increase in yields Tuesday, nor was it the market's overreaction. Rather, it was the degree of overreaction by the market. The NASDAQ lost 2.8%, it's worst day since March, and high-growth tech stocks led the drop. NVIDIA was down 4.44% and ARKK down 4.18%.

For TSLA some good news somewhat offset the macro plunge.
* Electrek reports that Tesla has secured an agreement with Arevon for deployment of 2GW of battery storage
* Various Tweets are suggesting Shanghai production and deliveries will be especially high in September
* Piper Sandler is boosting estimates for Q3 and saying it will be Tesla's best ever in this document

The net result was an attempt by the usual pirates to accelerate TSLA's dip with this macro drop and the market chose instead to buy the various dips. Notice the many "icicles" where a deep drop is followed by a rise of nearly the same intensity. Thus, TSLA significantly outperformed most high-growth tech stocks today by only losing 1.74%. Impressive, really, and it makes me look forward to the next positive macro day.

We had been watching the yields on 10 year treasury bonds climbing day after day. Make a note that the market is fickle and may throw its hands in the air and run when rates cross a round figure such as 1.5%

Max pain on Tuesday was 765. Looking at the chart, the big call wall is at 800, and that could be this week's big battleground.

Looking at the tech chart, Tuesday's dip did two things positive. First, it brought the stock price below the upper bollinger band so that institutional investors are once again willing to buy. Second, the dip produced a red day after the five consecutive green days. Seldom do we see more than 5 green days in a row (although we saw 6 in late July/early August). Bottom line is that Tuesday was a great day for the macros to tank because TSLA could benefit from a little consolidation before moving higher.

@winfield100 reports that the NASDAQ did a more accurate volume calculation on TSLA for Monday on Tuesday morning and recorded over 28M shares traded. Yep, Monday was a high volume day by our current standards.

Conditions:
* Dow down 569 (1.63%)
* NASDAQ down 423 (2.83%)
* SPY down 9 (2.02%)
* TSLA 777.56, down 13.80 (1.74%)
* TSLA volume 24.8M shares
* Oil 74.52
* IV 47.6, 18%
* Max Pain 765

 

[Papafox]

TSLA chart above

QQQ chart above

In the first two days of this week, TSLA's trading looked nothing like QQQ's. Looking at the charts above, we see lots of similarities between the two for Wednesday, but looks can be deceiving. For example the dip from morning high to early afternoon low was a bit over 1% for QQQ but more than twice as high for TSLA (even though TSLA outperformed QQQ on Wednesday and throughout this week so far). I attribute the deeper dip for TSLA to a bit of shorting to help the dip run lower (dip on steroids) arranged by the hedge funds, who profit from accelerating such dips and then covering.

Take a look too at the plateau TSLA encountered after the 2pm recovery from red. TSLA was clearly being capped here, but the cap failed and the stock price ran higher. A big dip of QQQ led to a quick dive into the red, but buying pressure allowed TSLA to remain well in the green.

Overall, high-growth stocks didn't fare well on Wednesday as we saw ARKK down more than 2%. TSLA's relative strength suggests that buying pressure leading up to the Q3 P&D Report is still very much a factor. TSLA volume of over 20M shares supports the view that buyers continue to load up this week.

News:
* CNBC reports that Chamath Palihapitiya sold his TSLA stake in order to pursue other investment opportunities. "I don't have an infinite pool of capital. So when I have these ideas, the money has to come from somewhere," said Palihapitiya.
* Tesla Deliveries Are on a 'Massive Trajectory' In September, says Wedbush analyst Daniel Ives. See the actual note here.
* Elon Tweeted "No guarantees, but I think it will. ..." in response to Gali's post:

10 year treasury bond yields remained unchanged on Wednesday

Max pain rose from 765 to 775 on Wednesday morning. As for all those 700, 710, and 720 puts, they are just going to be free money to the option sellers once again this week, something to the tune of $60 million or more.

A closeup shows 800 strike as the "keep her below this number" price this week for market makers. Strikes 780 and 790 are dominated by calls, but below that level there's a small never-never land and then puts dominate.

TSLA rose $3.75 on Wednesday but the upper bollinger band rose more, increasing the headroom for a run higher on a decent macro day. Notice how much higher the 50 day moving average (blue line) is over the 200 DMA (red line). As @Curt Renz has previously pointed out, the golden cross (when the 50 DMA climbed through the 200 DMA) coincided very closely with the beginning of this steeper climb we've been enjoying for a little over a month.

Nothing is off the table this week. I suspect the market makers will succeed in keeping TSLA below 800, but with Friday being the last likely day to buy into TSLA before the Q3 Production and Deliveries Report, buying could be stronger than the market makers can handle. Fingers crossed.

Conditions:
* Dow up 91 (0.26%)
* NASDAQ down 34 (0.24%)
* SPY up 1 (0.17%)
* TSLA 781.31, up 3.75 (0.48%)
* TSLA volume 20.6M shares
* Oil 74.80
* IV 47.9, 19%
* Max Pain 775

 

[Papafox]

TSLA chart above

QQQ chart above

So, the plot thickens. Comparing the TSLA chart with the QQQ chart (and no news to greatly affect TSLA today other than perhaps positive news related to September production and delivery numbers) important differences can be noted. We had the opening Mandatory Morning Dip with TSLA when none appeared on QQQ and then the 11am-ish dip into the red for TSLA but not so much for QQQ. Then QQQ held its gains until about half an hour before close but look at TSLA, where the pushdown began not long after 2pm.

Perhaps sector issues adversely affected TSLA on Thursday. Growth stocks did pretty well, with NVIDIA up nearly 1% and ARKK up 3/4 of 1%. Perhaps a dip of 10 year treasury bond yields to back below 1.5% was the catalyst. You would think, however, that with growth stocks up and increasing expectations for Q3 delivery numbers for Tesla, TSLA should done well today too.

Part of Thursday's problem was that volume was down a bit (17.8M shares) and this reduction in volume makes manipulations easier. The other reason for easier manipulations was that the macro markets were volatile today, especially with markets opening high and then dropping quickly into the close, which is a particularly useful type of volatility to use as an aid to manipulations.

News:
* In this video, Rob Maurer explains that how he expects 151K vehicles produced in Q3 and deliveries of 147K

Yields on 10 year treasury bonds sank a bit on Thursday so that they were below 1.5% once again. Ah... Wall Street, where the love?

Max pain remained at 775 and ending TSLA stock price on Thursday was 775. That's a nice setup for the market makers who are looking for a very profitable closing price of TSLA on Friday.

The upper bollinger band continues to climb and is now approaching 789. Notice how many rallies have popped through the top of the upper bb, only to be swept back inside within a couple days.

Overall, I'm satisfied with TSLA's positioning for the Q3 Production and Deliveries Report. If the stock price rallies too much before the report, there's too much of a chance to see the "sell the news" response if results are less than stellar.

Conditions:
* Dow down 547 (1.59%)
* NASDAQ down 64 (0.44%)
* SPY down 5 (1.22%)
* TSLA 775.48, down 5.83 (0.75%)
* TSLA volume 17.8M shares
* Oil 75.03
* IV 51.7, 28%
* Max Pain 775

 

[JimboAZ]

Did you mean "251K produced and 247K delivered"?

 

[Papafox]

Did you mean "251K produced and 247K delivered"?

Yes, Rob Maurer estimated 251K produced and 247K delivered in Q3. Thanks for heads up. Doing these posts at night after a full day leaves me open for errors.

 

[Papafox]

TSLA chart above

QQQ chart above

Congrats longs, Tesla managed to deliver a Production and Deliveries Report that matched our expectations (and therefore left analyst expectations behind in the dust). Let's look at Friday's trading first and then move on to discuss the Production and Deliveries Report further down the post.

On Tuesday, TSLA flirted with 800 before closing near 790. That buyer enthusiasm sent chills down the backs of the market makers and forced them to get serious about keeping the stock price under control as the final days of Q3 came forth. By Thursday they had managed to sink TSLA down to max pain of 775 and managed to hold onto that number on Friday. Looking at the two charts above, notice how the QQQ chart started heading higher about 1pm and typically you will see a capping of the TSLA stock price at such times in late afternoon and then either a break upwards as the macros get too high and the capping becomes too apparent or a break lower should the macros give up gains. Instead, you saw a push downward on TSLA shortly after noon (the best defense is a good offense) and then a serious game of whack-the-mole in TSLA's final hour of trading. I'd love to hear someone who isn't a believer in manipulations give a reasonable explanation for Friday's trading. Somewhat lower volume of 17 million shares made the manipulations possible.

The previous Friday was a real failure of the market makers to tweak the TSLA stock price to align with max pain but this past week was a different story, with TSLA stock price nearly matching Max Pain on Thursday and then the market makers doing whatever was needed to keep the two aligned on Friday. Chart courtesy of @JimS .

Q3 Production and Delivery Report

Our own @The Accountant really nailed the numbers this quarter, estimating on Sept 11 Q3 production at 236.1K and deliveries at 240K. In this Tesla news release, actual numbers turned out to be 237.8K and 241.3K, respectively. Nice work! Another tool for estimating could have been to take Troy's typically low estimate of 235K and average it with Rob Maurer's typically high estimate of 247K and arrive at 241K. It'd be fun to try that technique next quarter. Please follow this link to see @The Accountant 's Q3 financial estimates. His earnings per share (non-GAAP) declined one penny from his estimate, due to mix of S/X in deliveries.

The deliveries of course blew away the Wall Street consensus numbers and even media outlets such as CNBC gave Tesla credit for a big beat. For the coming week, the usual suspects will figure out some FUD to unleash. OTOH, these are not just good numbers. Instead, they tell a story. We saw TSLA take off after the company showed it could continue growing during the Covid19 pandemic (production limited, not demand limited). The story that Wall Street needs to understand now is that during yet another quarter of supply chain issues for all vehicle makers, the competition reduced deliveries substantially while Tesla remained on track in ramping up its deliveries. If investors grasp the importance of this phenomenon, we could see upward pressure on the stock price materialize, above and beyond the value of good numbers reported in Q3.

Part of the answer to Tesla's ability to defy the supply chain negative effects can be found in the company's unique innovation and agility centered approach to manufacturing. This video by former Tesla employee Joe Justice explains how Tesla embraced the "agile" method of adjusting manufacturing and upgrading the vehicles. If you invest in TSLA, you really need to understand this enormous advantage Tesla has over competition. Last week I saw that the Shanghai LR Model Y had achieved close to 400 miles range. If you understand the constant changes made at Tesla, you will understand how this growth in mileage could occur.

On Monday I suspect we'll see positive reaction to the excellent numbers. OTOH, at some point, Monday or later in the week, expect the hedge funds to try a pushdown when they see an opportunity, most likely a macro dip. Fortunately for us longs, the positive catalysts are lining up with the Annual Meeting on Thursday, Oct 7. Sometimes annual meetings don't move the stock price, but with Berlin and Austin gigafactories close to opening, there's plenty of opportunity for a big announcement. A couple days later comes the Giga-Berlin County Fair event. Later in October comes the Q3 Earnings Report, which might bring non-GAAP profits over the $2 billion mark for the quarter. It's shaping up to be a fun month for us longs ; )

News:
* Tesla's Q3 Production and Delivery Report
* Clean Technica reporter suggests good progress being made on 4680 cells
* On Thursday the final episode of Netflix's Inspiration 4 Countdown series was released, featuring the civilian crew of the recent SpaceX orbital flight. It is so good that if you're a space fan (as I am) it'd even be worth a month's subscription to Netflix. Take a look:

Watch Countdown: Inspiration4 Mission to Space | Netflix Official Site

From training to launch to landing, this all-access docuseries rides along with the Inspiration4 crew on the first all-civilian orbital space mission.

www.netflix.com

Let me point out the obvious. This mission, highlighted by the Netflix documentary, puts a very human face on Elon Musk and SpaceX. Elon meets the crew, is there with their family, and even says he cried when he saw the documentary. In this age where billionaires are depicted as egomaniacs who don't pay their fair share of taxes, such a depiction is extremely helpful for SpaceX, Tesla, and all of Elon's endeavors. The current administration cannot continue to bias against Tesla in flagrant fashion if the American public respects Elon and what he is doing with his enterprises, particularly with Tesla.

A second day of 10 year treasury yield dipping gave Wall Street reason to send the macros higher (which it contributed to).

Max pain on Friday remained at 775 and TSLA closed within 83 cents of it (I know, I know, just another coincidence, right?). Looking at the Oct 8 max pain chart above, you can see a big call wall at 800, but it's quite possible that wall will be breached on Monday. The 740 max pain for Oct 8 expirations should not be a big factor this week, but it does indicate that the market makers and hedge funds will likely be trying for a push down as the week goes on. The more likeable Elon is, the more pushback you see to unfair practices by the government.

Coronavirus Update

For yet another week, new cases are dropping in the U.S., which should keep Wall Street from worrying on this topic this week

For the week, TSLA closed at 775.22, up $0.83 from the previous Friday's 774.39. Hoping you have enjoyed your weekend. Let's look forward to the trading days ahead.

Conditions:
* Dow up 483 (1.43%)
* NASDAQ up 118 (0.82%)
* SPY up 5 (1.19%)
* TSLA 775.22, down 0.26 (0.03%)
* TSLA volume 17.0M shares
* Oil 75.88
* IV 50.9, 26%
* Max Pain for Oct 8 740

 

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TSLA chart above

QQQ chart above

Mercy, Monday was a hang on to your hat kind of day! Within an hour of market open, TSLA topped 805 as buyers reacted to the excellent Q3 Production and Deliveries Report. Alas, the day happened to be a nasty one for the NASDAQ, which lost 2.14%. ARKK, a collection of growth stocks, lost 3.6% and Nvidia closed down nearly 4.9%. TSLA's minor gain of 0.81% for the day doesn't look so bad when compared to similar high-growth stocks.

What made TSLA's strong start so perilous was the downward trajectory of the NASDAQ as the morning wore on. A high stock price for TSLA on a day when the NASDAQ was really plunging was a perfect opportunity for the hedge funds to jump in and add steroids (short-selling) to initiate and then accelerate TSLA's dip. That dip must have come with the blessings of the market makers because TSLA ended the day reasonably close to the meeting point between Put domination and Call domination, the point that @Artful Dodger calls "C-P Brkpt". It looks to be about 780 on the max pain chart. In weeks such as this, there's no way the market makers are going to push far enough down to significantly ruin the profits of the rather large number of option buyers who hold 700-strike Calls expiring Friday. Instead, a close closer to the dividing line between Puts and Calls suits their needs sufficiently (check out the max pain chart below).

The first trading day after the P&D Report coincidentally happened on a horrible macro day and that coincidence allowed TSLA's price to remain below 800. I think the market is aware of the effect of macros on TSLA, however, and if Tuesday is a neutral or slightly positive macro day, I suspect you're going to see buyers taking advantage of the discount price of TSLA that is being offered. Remember, too, that all summer TSLA longs have had to fight for every price that ends in a zero, and in most cases that new price needs to be crossed multiple times before it sticks. TSLA has now crossed above 800 two Mondays in a row. As more analysts put the Q3 numbers in their spreadsheets, we're going to see more positive word from analysts, such as Monday's note from Wedbush reiterating a $1000 price target. Shorts are leaving TSLA, the consensus is that the stock is heading higher, it's just a question of when. Tick, tick, tick.

Volume exceeded 30 million shares on Monday. If you see such volume on a positive macro day, I suggest the climb could be significant.

I particularly appreciated a series of Tweets from Gary Black because he thinks like so many Wall Street big dogs think.
* In the first Tweet, he points out how porfolio managers (PMs) that have benchmarked (bm'd) the S&P500 are still about $75 billion light on buying TSLA. Becoming equal weight on TSLA would consume about 12% of TSLA's float.
* In the second Tweet, Gary Black says the reason for shying away from TSLA is because the Price to Earnings ratio is too high at 106X. Bring that P/E down and the portfolio managers are going to be more willing to pick up shares of TSLA. Lo and behold, a $2 billion Q3 Earnings Report would go a long way toward sweetening the P/E ratio for these managers.
* Further, two big concerns of Wall Street big dogs about TSLA has been fears of the chip shortage effect on production and FUD that left a suggestion that China demand was slowing. Q3 addressed these fears big time.
May I just say, "tick, tick, tick."

Yields on 10 year treasury bonds remained below 1.5% on Monday. A rise above on Tuesday might dampened the market's inclinations.

Selling by shorts in FINRA trades fell to it's lowest level in months. @Artful Dodger correctly pointed out that this indicates that retail shorts were not doing the shorting today that accelerated TSLA's dip. Rather, it was the big dogs such as hedge funds and market makers, who often switch to dark pools or naked shorting on important days like this. One desirable outcome of such a shift in source of shares to short is that the FINRA-reported selling by shorts shows a really low number, suggesting (likely incorrectly) that there wasn't much shorting going on.

The official max pain on Monday morning was 740 (look at all those calls at 700 to understand why it is so low) but the intersection point between Puts and Calls is about 780, which is very near where the stock price ended on Monday.

TSLA began market trading very near the upper bollinger band, climbed to above 805 and then fell to the effective max pain price at day's end. If TSLA can remain above 780 it'll help the upper bb rise above 800 and give the stock a better chance of sticking above that number.

Conditions:
* Dow down 324 (0.94%)
* NASDAQ down 311 (2.14%)
* SPY down 6 (1.29%)
* TSLA 781.53, up 6.31 (0.81%)
* TSLA volume 30.4M shares
* Oil 77.94
* Percent of TSLA selling tagged to shorts: 30%
* IV 49.2, 23%
* Max Pain 740

 

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TSLA chart above

NASDAQ chart above (QQQ chart gorked)

On Monday we got a chance to see what TSLA would do when the NASDAQ was down 2.14%: 780. On Tuesday, the NASDAQ was up 1.25%, so you'd expect results about 3.4% better than Monday, right? Alas, the close was 780 again, just $5 over the pre Q3 P&D Report trading.

As Tuesday market trading began, we saw the typical attempt at a Mandatory Morning Dip, but TSLA shrugged it off and climbed within $3 of 800. Remember how I said that TSLA has had to fight to climb above every price that ends in a "zero" this summer? Looks like that rule is double-true for prices that end with two zeros and begins with an eight. Quite simply, the market makers and some hedge funds don't want TSLA climbing above 800 and leaving the old comfortable trading range behind. Also, take a look at the max pain chart below. There are nearly 20K call contracts at 800 strike expiring on Friday. If this was a courtroom I would point to those expiring 800-strike call options as the motive for the crime. Of course you are witnessing classic share price manipulations for the benefit of the option sellers.

Fortunately, Tesla is executing very well these days, two new gigafactories are soon going to open, and Thursday's annual shareholders meeting could shed light on just how close Tesla is to opening the new gigafactories. Exciting times.

The latest threat to the insufficiently-delta-hedged option sellers is that Tesla chose to pay off the $1.4 billion loan on the Shanghai gigafactory early. This latest move bolsters Tesla debt to equity ratio even further, making Moodys look really incompetent or corrupt if it doesn't upgrade Tesla's debt rating soon. That upgrade would be a nice catalyst for a rally. Lots of catalysts are coming. Stick around and enjoy them when they happen.

Yields on 10 year treasury bonds rose above 1.5% on Tuesday but the market didn't have the same conniption it did the last time we saw a crossing

Official max pain is up to 750 on Tuesday but the "effective max pain", where the put domination gives way to call domination, remains at 780,

Time is on our side as the upper bollinger band slowly rises toward 800. It's less than $5 below at the moment. Many institutional buyers try to buy within the bollinger bands, and so we see TSLA gaining more potential buyers as the upper bb rises.

Conditions:
* Dow up 312 (0.92%)
* NASDAQ up 178 (1.25%)
* SPY up 4 (1.04%)
* TSLA 780.59, down 0.94 (0.12%)
* TSLA volume 18.4M shares
* Oil 78.93
* IV 51.2, 28%
* Max Pain 750

 

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TSLA chart above

QQQ chart above

Wednesday the news for Tesla was positive and the broader markets closed up. Of course TSLA languished yet again because the option sellers wanted it to. Let's hope that at Thursday's Annual Shareholders Meeting Elon will reveal enough about Tesla's current state and future that the stock breaks free from the market maker's shackles.

Looking at the charts, TSLA traded mostly in the green Wednesday morning while QQQ was mired in the red. The macros pepped up in the afternoon, however, with the NASDAQ closing up 0.44%. Notice the inappropriately deep afternoon dip and inappropriately shallow recovery of TSLA during the final 30 minutes of market trading? This is what I used to refer to "a pushdown into close" but I think a better name is "end of day pickpocket". So often, TSLA manipulators will steal a few dollars right before close when there's no reason for TSLA to suddenly dip. Trust me, if someone stole your wallet twice a week, it would add to a tidy sum in a year's time.

Overall, the day's trading resembled a 6.5 hour game of Whack-a-mole. This manipulation-friendly environment was brought to you by low volume of only 14.3M shares.

The good news for TSLA was that Tesla raised the prices on several vehicles. According to this The Street article:
* Model 3 SR+ increase by $2,000 to $41,990
* Model 3 Performance increased by $1,000 to $$57,990
* Model Y LR increase by $1,000 to $54,990
* Model Y Performance increased by $1,000 to $61,990

I say good news because we know from the Q3 Production and Deliveries Report that lack of production wasn't the reason why we're seeing delivery times stretching into April. Instead, demand really is off the charts. With such a long wait for vehicles and a possible EV incentive on the horizon, wouldn't it make sense to increase margins even before additional demand generated by a U.S. EV incentive? Moreover, Rob Maurer has made a point that the price increases in vehicles that were present in Q2 likely didn't affect revenues much that quarter because those who received vehicles in that quarter mostly ordered them before the price increases (and locked in the lower price). Q3 will be the first quarter when we see the full results of the price hikes.

Naked Shorting
Wednesday's main investors' thread included a very informative discussion by @Hock1 , @jbcarioca , and others about the effects of naked shorting and how a stock split would result in share buying as the naked shorters scramble to find shares. It's worth a look, here .

Annual Shareholders Meeting, 4:30pm Central Time
Thursday is the Tesla Shareholders Meeting at Austin Gigafactory. Do they have something important to announce about Austin's coming production plans? Stay tuned because the right announcement could potentially be a catalyst with production start this near.
See it here: 2021 Shareholder Meeting | Tesla
There is also a means of logging onto another site with a control number as a Tesla shareholder, but if your plans are simply to view the meeting, the link above will take care of that.

Yields on 10 year treasury bonds stabilized a bit above 1.5% today

For Friday's expiration the official max pain number remains at 750, with the solid Puts from 775 and below and solid Calls from 780 and above. The call wall at 800 has climbed up to 20K contracts as of Wednesday morning.

On Wednesday bitcoins climbed above $55K, making Elon and Zach once again look good for investing some Tesla cash there.

Looking at the tech chart, the upper bollinger band could cross above 800 on Thursday, setting TSLA up for climbing above that number and holding it if a big enough catalyst came our way. Don't hold your breath, though, the market makers have been determined with their manipulations this week, likely because they misjudged the quality of the Q3 P&D Report.

Conditions:
* Dow up 102 (0.30%)
* NASDAQ down 65 (0.44%)
* SPY up 2 (0.42%)
* TSLA 782.75, up 2.16 (0.28%)
* TSLA volume 14.3M shares
* Oil 77.43
* IV 50.9, 26%
* Max Pain 750

 

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TSLA chart above

QQQ chart above

Thursday morning we saw the NASDAQ steaming along above 1%, growth tech stocks typically up more than 2%, and TSLA down in the weeds, green but not keeping up with the NASDAQ. Yep, the capping continued. Fortunately for TSLA longs, things changed dramatically at 2:34pm when more than 74K shares traded hands and TSLA turned upward vertically. My guess? some deep pocketed long such as Leo KoGuan got tired of watching the non-stop manipulations and decided to throw a wrench into their scheme. Algos and traders jumped in and TSLA was almost immediately pressing 795. Another flurry of buying brought TSLA above 804 at 2:58pm.

Falling macros and a major effort from the market makers allowed a pushdown to 793.61 for the close, but TSLA did notch a close above 790 all the same. The importance of the afternoon's short-duration rally was that other buyers are willing to jump in when TSLA shows signs of shaking off the doldrums and climbing.

What happened in after hours trading is very interesting. We saw 769K shares trade at the closing bell. Then at 4:27pm a big pre-arranged trade for 984K shares took place, which I suspect was market makers and hedge funds trying to cover their very substantial shorting efforts for the day. My guess is that they didn't gain as many shares as they wished, and the run higher in the stock price after the pre-arranged sale suggests they were buying after hours to cover.

My impression of the Annual Shareholders Meeting was that nothing major came out of it to cause a "pop" in the stock price (it usually doesn't) but overall the news was positive. Tesla is moving its HQ to Texas. More importantly, Elon suggested that Austin Model Ys would be built with batteries from Kato Rd., which just so happen to be 4680s. I take this as a good sign that yields continue to improve on the 4680s and the new cell design is doing okay.

For a brief but informative overview of the Annual Meeting, check out Dave Lee's video here.

Yields on 10 year treasury bonds rose higher on Thursday

Not much has changed with the max pain chart. Official max pain remains 750, 775 and below is put-dominated while 780 and above in call-dominated.

The good news in that the upper bollinger band is at 802 now, giving us longs a much better chance of crossing and holding 800.

Conditions:
* Dow up 338 (0.98%)
* NASDAQ up 152 (1.05%)
* SPY up 4 (0.86%)
* TSLA 793.61, up 10.86 (1.39%)
* TSLA volume 19.0M shares
* Oil 78.83
* IV 48.3, 20%
* Percent of TSLA selling tagged to shorts: 38%
* Max Pain 750

 

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TSLA chart above

QQQ chart above

This past week has been the week following the excellent Q3 Production and Delivery Report numbers. I believe the market makers underestimated the numbers and were caught under-hedged and in need of a serious manipulation effort to save their bacon. They succeeded.

Looking at the two Friday charts above, you can see that despite pre-market trading approaching 795, the usual suspects were ready for a spirited Mandatory Morning Dip and a cap to hold it there. After 2pm when QQQ started rising, that set the market makers up for a dicey situation because TSLA was recovering faster than the macros and on that path it could blast past 800 before close. Keep in mind that plenty of traders watch TSLA on a Friday afternoon and if the stock price is artificially depressed but showing strength in the final hour, you will see buying to take advantage of an expected pop Monday morning. Fortunately for the pirate, the macros headed downward in the final half hour, which gave the market makers license to jump in and add steroids to TSLA's dip into the close. Notice that TSLA's closing price was similar to the prices being held throughout much of the day.

TSLA's closing price of 785.49 was a hybrid of sorts for the option sellers. On one hand a close at 795 would have threaded the needle between put dominance at 790 and below and the big call wall at 800. A mere $5 is way too close to the $800 call wall. The max pain of 750 was simply unachievable on a week following so much good news. Shooting for 785 made more sense.

My thanks to @hobbes for posting the above Tweet from Gary Black in the main TMC investors thread. There's a lot to see here! The strong upward trend of TSLA from December of 2019 until today is quite evident. Yet another analyst upgrade and a growing percentage of analysts with buy recommendations keeps winding the spring tighter and tighter. At some point the buying pressure becomes just too great and the market makers lose control of the price for days at a time.

Looking at the price progression of the past 2 years, consider the catalysts for various rallies above the trend line. That nice bump upward you see in September of 2020 was the result of the stock split. The really big run higher began in November when S&P 500 inclusion was announced (completed on Dec. 21). So much buying was needed that the stock price overshot what the market was willing to sustain and a correction then consolidation ensued. Now the stock is back on the upward trend line again, waiting for the next big catalyst. Tick, tick, tick.

For any of you who doubt that big manipulations take place with this stock, let me pose this question: How can you otherwise explain the very small price movements of TSLA vs. the macros over the past couple weeks?

My general feeling is that the market makers had to work hard this past week to keep TSLA from running much higher. It may be time for them to loosen the manipulations a bit and allow the clear upward pressure on TSLA to relieve itself in a controlled fashion. We've seen closes above 790 and a couple fleeting sorties above 800. Both are vulnerable in the coming week. My guess is that we'll be above 800 leading in to the Q3 Earnings Report, which is now scheduled for October 20.

This past Friday's max pain chart showed a transition point between put domination and call domination at 795. Max pain Friday morning was 750, due to the large number of calls at 700-strike and thereabouts. The market makers lacked the horsepower to push all the way down to 750 during a week with such good news to propel it, and so a close near 785 resulted (with help from a late day macro dip).

Next Friday's max pain chart is also lumpy, with large numbers of calls at 720, 750, and 800 and puts mostly dominating through 795. Part of the reason why the puts and calls chart is getting so lumpy is because the call buyers are tired of losing week after week when the stock price "mysteriously" heads toward the max pain price on Fridays. I suspect some call buyers are purposely avoiding the strike price bets near everyone else.

@JimS provided another max pain vs. closing price chart this week.

Coronavirus Update

New cases in the United States continue to fall after the peak of the Delta variant outbreak. The good news is the outbreak persuaded a whole lot of fence sitters to get jabbed. On my island in Hawaii, 84% of residents age 12 and older are now vaccinated.

Looking at the tech chart, the upper bollinger band is now more than $3 above 800, setting up a nice opportunity for an assault on that price point in the coming week.

For the week, TSLA closed at 785.49, up 10.27 from the previous week's 775.22. That makes it seven weeks in a row of climbing, for a gain of 105.15 over that period. Hoping you enjoy a great weekend.

Conditions:
* Dow down 9 (0.03%)
* NASDAQ down 74 (0.51%)
* SPY down 1 (0.18%)
* TSLA 785.49, down 8.12 (1.02%)
* TSLA volume 16.5M shares
* Oil 79.35
* IV 47.2, 18%
* Percent of TSLA selling tagged to shorts: 43%
* Max Pain 760

 

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TSLA chart above

QQQ chart above

Hopefully the market makers managed to catch up in their delta-hedging last week because Monday's trading shows TSLA trying to make up for lost time. The near vertical climb after market open was indeed impressive and TSLA needed just a little over half an hour to reach 800. The capping of course followed, and the stock spent the day gyrating between 790 and 800.

Alas, falling macros into the close is almost always a dicey situation for TSLA, and today was no exception. When the NASDAQ/QQQ dip accelerated in the final minutes of market trading TSLA managed a quick dip in the final 10 minutes. Although that final dip of TSLA's could simply have been market forces at work, given the strength earlier in the afternoon of TSLA vs. the market, that final 10 minute dip of TSLA's could have been the results of a profitable pushdown by hedge funds, bless their little petty-larceny-inclined hearts.

With the 3Q Earnings report only 7 trading days away, at some point TSLA will likely gain some traction and establish a foothold above 800, but in the short run macro uncertainty could make the job a bit tougher. OTOH, buyers this week and last have shown their willingness to buy into steep climbs of TSLA, suggesting there's a fair number of buyers planning to get in before the Q3 Earnings Report. They're waiting for the best entry point but showing that they're jumpy about being left behind in a big move.

News:
* FSD version 10.2 rolled out on Sunday and about a thousand new beta testers are being added. So far impressions are quite positive.
* Model X reservation holders getting phone calls to see if they will accept 6 seat version for earlier delivery. It's starting to happen.

10 year treasury bond yields are looking somewhat worrisome as they continue to climb.

Official max pain is at 750 and I would expect that number to rise during the week. Monday's chart shows puts and calls about even at 775 with puts solidly dominating below and calls solidly dominating above.

Looking at the tech chart, an upper bollinger band number of nearly 806 bodes well for a close above 800 sometime this week, providing macros cooperate.

Conditions:
* Dow down 250 (0.72%)
* NASDAQ down 93 (0.64%)
* SPY down 3 (0.72%)
* TSLA 791.94, up 6.45 (0.82%)
* TSLA volume 13.9M shares
* Oil 79.35
* Percent of TSLA selling tagged to shorts: 40%
* IV 44.7, 15%
* Max Pain 750

 

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TSLA chart above

QQQ chart above
So far, this week's trading is what last week's should have been but the market makers weren't prepared for the stock price to rise so much and so they put the rally on hold for a week while they got their hedging in order. Now we're seeing the climbing to relieve the upward pressure on the stock price. Fortunately, with the Earnings Report on October 20 there's a reason for the stock price to rise higher between now and then.

TSLA once again traded green when the macros were red. Part of the reason for Tuesday's strength is volume of over 21M shares, which makes the manipulator's work all the more difficult. Another part of the reason is an upward break for a stock that's already in an uptrend. Many stock buyers of TSLA are more focused on the trend than factors such as price to equity ratio. Thus, when TSLA is climbing, there's a tendency for it to continue climbing (at least for a while) instead of tapering off and returning toward some traditionally recognized valuation metric.

Looking at the charts above, you can see the feeble attempt at a Mandatory Morning Dip shortly after open. It lasted 2 minutes. When the MMD was quickly dispatched, buyers jumped on board and as Top Gun's Maverick would say, "Hang on Goose, we're going vertical!" With TSLA pushing 808 10 minutes after open, there was no way the option sellers could reclaim 800 on Tuesday without a big macro event. They tried to control TSLA, though. Look at the percentage of selling by shorts in the conditions below, it has climbed to 45%. After 2pm QQQ started a modest downward slide and TSLA followed. Over 800,000 shares traded in the closing cross at 4:00pm, suggesting some of the shorting done for holding TSLA back today was being covered during that minute.

Looking toward the rest of the week, a couple scenarios present themselves. With a $20 gain already this week, option buyers have been picking up 810, 820, and 830-strike call options that expire Friday. The 810s have been particularly lively. If the market makers can hold TSLA back at prices similar to Tuesday's, there's money to be made this week. OTOH, estimates of Q3 earnings have been rising this week too, and there's plenty of incentive to get into TSLA before next week's Earnings Report. If volume climbs or stays high, the market makers may be unable to hold the stock back, just as they failed Tuesday morning.

We finally saw relief on Tuesday to the relentless daily climbs of 10 year treasury bond yields

Calls slightly exceed puts at strike 780 but otherwise 800 is the first strike where calls dominate. Another development is that 810 calls have become the most active.

Notice the 21.9M volume of Tuesday's trading. No wonder the usual suspects couldn't force TSLA back below 800. TSLA didn't get much further than the upper bollinger band on Tuesday and then sank back about $5 with a macro retreat. With lots of call options expiring Friday at 810 strike and the upper BB at 810 today, that price made a logical point at which the market makers would draw their line in the sand and establish a new point of resistance.

Conditions:
* Dow down 118 (0.34%)
* NASDAQ down 20 (0.14%)
* SPY down 1 (0.25%)
* TSLA 805.72, up 13.78 (1.74%)
* TSLA volume 21.3M shares
* Oil 80.64
* Percent of TSLA selling tagged to shorts: 45%
* IV 44.1, 14%
* Max Pain 760