Note: post was delayed because TMC was unavailable during posting time early Friday morning
TSLA chart above
TSLA chart above
Thursday was going to be the day we saw just how much capping must have been done to hold TSLA in Wednesday’s after hours trading at a price lower than Tuesday’s closing price, even though the earnings report was nothing short of epic. What we found was that instead of TSLA closing near 1020 during the hours following Wednesday’s Earning Report and Conference Call, TSLA zoomed up to the 1080s within 15 minutes of market open on Thursday. Volume was too high on Thursday open for the market makers and hedge funds to work their shorting and capping mischief, and so we got a more honest view of how the market regarded Tesla’s Q1 earnings.
Unfortunately, the market had a conniption over an increase in 10 yr. treasury bond yields and the whole market headed down throughout the day. The NASDAQ lost 2.07%, NVDA closed down 6.05%, and ARKK lost 4.97%. TSLA’s gain of 3.23% made it the only stock in the green in many of our feeds at close on Thursday, but keep in mind that 3.23% gain followed about an 8% dip of TSLA from the day’s morning high.
May I just point out that a trading day like Thursday's with a long downward run lasting most of the day is a perfect opportunity for rolling some in the money call options forward at no or little cost if you are trading in a tax-free environment such as an IRA. Of course I instead spent the day driving my dog to two vet appointments, sigh.
If you take a look at the treasury yield chart below, you will realize that although yields spiked in the morning, they drifted lower before close and Thursday’s close of 2.9% was actually lower than Tuesday’s close of 2.94%. We have a case of the market again afraid of its own shadow. A 2% drop in the NASDAQ on Thursday is really silly when we’ve seen similar yields already this week. Eventually the overreactions will give way again to tech stock FOMO.
This chart gives a great idea of just how well TSLA has been outperforming analyst expectations lately. Wednesday's beat was massive.
Overall, TSLA clearly has more need to move further up before the magnitude of this excellent quarter is reflected in the stock price. I strongly suspect that the market makers have been adding downward pressure to market forces on Thursday. After all, they have option closures on Friday in need of rigging. Be patient.
News:
* Elon has apparently lined up the funding he needs to make a tender offer for Twitter
* Trip Chowdhry raised his TSLA price target to $2300
Compare Thursday's 10 yr treasury yields to Tuesday's. Tuesday was a big up day for the market and yet Thursday's somewhat more benign yield performance caused a 2% dip in the market. Not rational nor consistent.
Max pain showed 985 on Thursday morning. I guess the reason was to deny the 1000 calls from moving into the money.
TSLA busted through the mid-bollinger band with a vengeance on Thursday but the unrealistically negative market allowed for TSLA to be pulled back down on the side the market makers want. Looks like we'll have to wait until next week to top the mid-bb (macros permitting).
Conditions:
* Dow down 368 (1.05%)
* NASDAQ down 278 (2.07%)
* SPY down 7 (1.50%)
* TSLA 1008.78, up 31.58 (3.23%)
* TSLA volume 34.4M shares
* Oil 103.8
* IV 54.3, 44%
* Max Pain 985
* Percent of TSLA selling tagged to shorts: 39% (shortvolumes.com)
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