TSLA chart above
QQQ chart above
Friday started out positively for NASDAQ and TSLA but approaching market open we saw the usual Mandatory Morning Dip of TSLA at market open as we have seen every day this week. Initially, QQQ was trending higher but comments from Fed Chairman Powell on Friday included the usual Darth Powell rhetoric about we have more work to do on interest rates, etc., and QQQ spend the late morning and all afternoon in the red.
This CNBC article says rates might not have to rise as much as previously thought to curb inflation and
this article interprets Powell's comments as likely leading to a pause at the next meeting.
In any event, the negative spin by the Fed cause NASDAQ to close down 0.24%. TSLA, OTOH, closed up 1.64%. TSLA really was ready to run higher, but we saw significant whack-the-mole activity any time cute little TSLA stuck its head above 180. Add that behavior to the MMD at market open, and you have a major effort by the MMs and hedgies (the option sellers) to keep TSLA from closing above 180 on Friday. Percent of TSLA selling by shorts was up at the nosebleed high level of 66% and volume during the 4pm closing cross was 3.7 million, indicating significant opportunities for the option sellers to cover their daily short selling.
Since TSLA closed 14 cents above 180, does that mean the market makers were willing to tie their grandmothers to the railroad track and watch them all be run over by the 4pm train? Actually no, because we saw TSLA pushed a penny or two below 180 in after-hours trading and prevent the 180-strike call owners from making any money. I'm guessing it'd take more like a 50 cents overshoot before sacrificing their grandmothers would become an equal pain event for them.
The clown show of the day was Gordon Johnson
claiming on Twitter that Friday's $3.25 gain was entirely due to market makers delta hedging as TSLA rose. Ah, Gordon, with percent of selling tagged to shorts hitting 66% on Friday, might the manipulative selling actually be pushing TSLA downward and it's real buyers bidding the stock upwards? Sheesh.
truflation.com 's U.S. number is rapidly dropping to near 3%. Keep in mind that in June and July the base for the CPI 12 month inflation number is going to rise 2.5% (meaning that 2.5% of the 12 month inflation number should be replaced with a value of about 0.5% for two months of inflation). Thus the U.S. inflation rate which is showing as 5% could look more like 3% after the July CPI report if there are no big surprises.
So, what caused Tesla's stock to rise more than 7% this week? I'd say it's effects from the annual meeting: a hint of Tesla's brilliant future that might no longer be 100% overlooked by Wall Street, advertising by Tesla, Optimus future revenues being considered, and anticipation of Gen 3 vehicles in future years that are generating positives vibes for TSLA. It's all of these factors plus vehicles price raises instead of cuts by Tesla (so far, fingers crossed). That 7% rise puts TSLA right at 180, which is a price that creates Fear Of Missing Out in investors who bailed prior to Tesla's Q1 ER. I'm hoping the usual Monday morning optimistic opening can get the FOMO train rolling further along the track.
News:
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This Harris poll that Elon reacted to on Twitter is eye-opening when you scroll down to most favored political candidates. We don't have to worry about Elon's talents being wasted as president because he was born in a foreign country (South Africa) and therefore not legal to run). Nonetheless, Elon's popularity in politics is a testament, I believe, to the work he's doing to make Twitter as truthful as possible. Elon still screws up from time to time, but his growing political popularity suggests to me that his Twitter antics are being slowly replaced by Twitter becoming viewed as a fair public forum for all, regardless of political leaning. Why does it matter to TSLA investors? Fewer Americans are going to pass on buying Teslas because they disagree with Elon's politics. He's making progress.
For the second day in a row, 66% of TSLA selling was tagged to shorts. Remember that 68% is about as high as we ever see this number. Push-down manipulations were likely significant on Friday because of this high number.
Yields on 10 year treasury bonds spiked higher on Friday morning after Darth Powell delivered his remarks, closing around 3.67%.
Max pain was listed as 170 for Friday. You can see the huge call wall at 180, something the MMs were laser-focused on throughout Friday's trading.
Under the first chart, you can see Friday's options volumes
So, in this post,
@Curt Renz figured max pain had risen to 180 on Friday. I don't know his techniques, but expect them to be sound (his predictions have typically nailed the Friday closing price). I suspect as options close Friday progresses, the max pain moves closer to the stock price as some options buyers close out their bets. In any event, I split the difference, figuring 175 would have been closer to max pain on Friday and put a red dot there. Nonetheless, I too was predicting that 180 would be the battle on Friday.
For this coming Friday, the enormous call wall is at 200 and the nearer call peaks are much lower. This is due in part to the past week being a monthly options expiration and the coming week being just a normal weekly expiration. Max pain is listed as 170 but should rise toward the stock price early in the week.
Looking at the tech chart, TSLA has made it above the blue 50 day moving average, hurrah! Now, if TSLA can continue a climb, it could pull the 50 DMA upwards and a crossing through the red 200 day moving average would excite the technical traders in a good way.
For the week, TSLA closed at 180.14, up 12.16 (7.2%) from the previous Friday's 167.98. It's been a good week my friends. Hoping you relax outdoors and spend time this weekend with those you love.
Conditions:
* Dow down 109 (0.33%)
* NASDAQ down 31 (0.24%)
* SPY down 1 (0.15%)
* TSLA 180.14, up 3.25 (1.64%)
* TSLA volume 134.5M shares
* Oil 71.55
* IV 44.5, 1%
* Max Pain 170 for both May 19 and May 26
* Percent of TSLA selling tagged to shorts: 66%
* Volume at 4pm closing cross: 3.7M