Papafox's Daily TSLA Trading Charts

[Papafox]

TSLA chart above

QQQ chart above

No need to look for a story to explain TSLA's dip on Tuesday. A mighty 66% of TSLA selling was tagged to shorts on Tuesday (with 4.1M shares traded at 4pm cc), confirming that what ailed TSLA on Tuesday was big Wall Street dogs willing to manipulate like crazy to achieve their objective of pushing TSLA lower. I discuss my theory in detail in the max pain section, but bottom line is that I believe the market makers are starting early to set up TSLA for a very profitable Jan 19 closing of the yearly options that month. Fortunately, we may not have far to go.

News:
* Tesla Tweets that the new (Highland) Model 3 is now available in North America. I checked the order page and it shows Jan-Feb delivery dates.

Percent of selling tagged to TSLA shorts ran all the way up to 66% on Tuesday. For reference, 68% is about as high as I've ever seen it. Various entities were shorting the "sugar" out of TSLA, and the price action reflects that activity.

Once yields on 10 year treasury bonds crossed above 4% they've pretty much leveled off. Tuesday's close was about 4.02%

Max pain Tuesday morning was 240. Looking at the open interest chart above you can see 237.50 is about the neutral point with put-domination below and call-domination above. Market makers would be satisfied with 237.50. It looks like the heavy shorting may in fact be a push toward Jan 19's max pain of 220.

Looking at the max pain chart for Jan 19 (above), you can see that strikes 240 and 233.33 are call dominated but 230 and most lower strike are put-dominated. There's a big exception for though with 180 and 183.33 strikes, which are strongly call-dominated. Although 220 would be the max pain closing price on Jan 19 and would minimize the gains on those 180 and 183.33 calls, the market makers might just be ok with getting TSLA below 233.33, which is less than $2 below Tuesday's closing price.

Why would market makers and other pirates be working so early to get the price down to this level more than a week before it's needed? I would say that as long as TSLA closes above 230 on Friday there's not too many puts that need to come into the money and bringing the stock price down early causes investors to rejigger the options open interest for this and next week, in a way that's favorable to the option sellers.

Tuesday's TSLA options volumes

Things are getting interesting. The blue 50 day moving average is creeping up, as expected and TSLA didn't close too far below. The Wall Street big dogs may be getting close to the price they want TSLA to be at come Jan 19, so you can see the rate of descent slowing. TSLA bounced off the combination lower bollinger band and 200 day moving average Tuesday morning.

Conditions:
* Dow down 158 (0.42%)
* NASDAQ up 14 (0.09%)
* SPY down 1 (0.17%)
* TSLA 234.96, down 5.49 (2.28%)
* TSLA volume 96.3M shares
* Oil 72.22
* IV 46.9, 33%
* Max Pain 240
* Percent of TSLA selling tagged to shorts: 66%
* Volume at 4pm closing cross: 4.1M shares

 

[Papafox]

TSLA chart above

QQQ chart above
Note: Time-constrained report- no research
The Nasdaq closed up 0.75% on a strong day with some fall-off after 3pm but then a zoom upwards into close. OTOH, TSLA lost 0.43%. The cause? Once again, we're seeing 66% of TSLA selling tagged to shorts, and so the bear attack has reached a ferocious stage as the pirates work to prevent TSLA from bouncing and defining a bottom to this manipulative effort. The market makers would likely want something between 230 and 233 for Friday's close. Let's see how well the week works to enable that goal. Max pain for Jan19 is now 217.50, so there is a bit of an uptrend. This whole bear attack is going to be fascinating to watch as we try to guess whether Jan 19 is the endpoint for the effort. With Tesla's Q4 ER scheduled for Jan24, it's not going to give much time before the uncertainty of an ER.

Percent of selling tagged to shorts came in at 66% for the second day in a row. Mercy! The pirates are really going overboard to bring TSLA lower.

Yields on 10 yr. treasury bonds closed at 3.99% on Wednesday, the first close below 4% in days.

Max pain Wednesday morning was 237.50. Strike 235 is the relatively neutral point between put domination and call domination

Tuesday's TSLA options volumes

The lower bollinger band was sitting right about on the red 200 day moving average, and the combination did their magic and created a bounce when hit by TSLA in its daily low.

Conditions:
* Dow up 171 (0.45%)
* NASDAQ up 112 (0.75%)
* SPY up 3 (0.57%)
* TSLA 233.94, down 1.02 (0.43%)
* TSLA volume 91.3M shares
* Oil 71.77
* IV 46.7, 32%
* Max Pain 237.50
* Percent of TSLA selling tagged to shorts: 66%
* Volume at 4pm closing cross: 3.3M shares

 

[Papafox]

TSLA chart above

QQQ chart above

Folks, it was a good day to keep your seatbelt fastened. At 8:30am the CPI numbers came in a bit warmer than expected, 0.3% vs 0.2% expectations. You can see a dip in QQQ and TSLA trading initially. In contrast to the fed's inflation computations of 3.4% annually, Truflation.com is estimating 2.19% annual inflation at the moment.

Then came the Reuters article about Hertz selling EVs. Reuters is reducing its EV inventory by about a third due primarily to insufficient demand. Other EVs are offered by Hertz but Mr. Renter isn't keen to go searching for a charger. The CEO of Hertz was perturbed that the Tesla price cuts in 2023 greatly affected the value of his inventory, but it was just a matter of timing, rather than a characteristic of EVs. Finally, there was the concern about repair bills, which I think is more related to leadfoot drivers doing what they would in a Porsche or Ferrari (because that's how Teslas can accelerate). Reuters leaves you with the impression that people just don't want to rent EVs, which is a spin. Consider the timing of the Reuters report.

If Mr. Market needed more reason to get his knickers in a knot, then came the story of GigaBerlin going to be shut down for 2 weeks due to supply chain issues related to Red Sea attacks on shipping. This is a relative nothingburger, however, because inventory is sufficient to handle the break in the slowest quarter of the year.

Finally came the story of China Tesla prices being lowered between 3 and 6%.

Missing lately has been media emphasis on the positive stories, such as Model 3 Highland now available in America and images portrayed in this photo posted by @cab that could potentially be the new Gen 3 vehicle. If these cars are being produced in Alpha versions at the moment, production could be only half a year away. Finally, a top 1% analyst Vijay Rakesh of Mizuho just gave a 310 price target to TSLA, as explained on this Brighter with Herbert video.

So, with enough bad news out there to pull TSLA lower for the day, and with TSLA already well below the logical closing price of 230 for Friday, did the Wall Street pirates slacken with their shorting? Nope. Percent of selling tagged to shorts came in at a very high 61% with a hefty 4.5M shares trading hands at 4pm. The effort on Thursday suggests that either the market makers are aiming for their Jan19 target already or other big dogs (such as shorts looking for a convenient time to cover) are shouldering much of the day's burden.

With over 2.6 million options contracts expiring on Jan19, and each contract covers 100 shares, that's a lot of marbles on the table come Jan 19. For perspective, there's just a bit over 500K contracts expiring on Jan12, about a fifth the amount of Jan19.

Percent of TSLA selling tagged to shorts came in high again at 61%, suggesting continued high manipulations

Yields on 10 year treasury bonds remained below 4% on Thursday's close at 3.98%. It looks like CPI numbers caused some spiking but the market dismissed the move by mid-day.

Max pain Thursday morning was 237.50. The neutral spot between put-domination and call-domination was about 235, thus there is no incentive strictly for Friday's options close for the stock price to be below 235. The incentive must be to push lower for the bigger expiration, which is Jan19's yearly options expiration. The max pain for Jan19 rose to 220 by Thursday morning.

Jan 19's max pain is now 220. Look at the nearly 40K puts at strike 230. The 230 strike puts expiring on Jan 12 are not small potatoes, however. There's nearly 20K contracts expiring on Friday.

Thursday's TSLA options volumes

The 2.87% dip on Thursday pushed TSLA below the lower bollinger band. Despite the stock's poor performance this week, notice the the blue 50 day moving average has continued to pull away from the red 200 day moving average, which is a good thing.

Conditions:
* Dow up 15 (0.04%)
* NASDAQ up 1 (0.00%)
* SPY down 0 (0.04%)
* TSLA 227.22, down 6.72 (2.87%)
* TSLA volume 104.9M shares
* Oil 73.57
* IV 46.6, 32%
* Max Pain 237.50
* Percent of TSLA selling tagged to shorts: 61%
* Volume at 4pm closing cross: 4.5M shares

 

[Papafox]

TSLA chart above

QQQ chart above

Lots of news to cover this three-day weekend. Friday morning began with a very encouraging PPI number reveal. Here's CNBC's take. Basically, PPI actually dropped 0.1% for the month, bringing full year PPI to a mere 1% increase. Since PPI implies what's coming in the future, this is very important. The news brought QQQ out of the red and into the green. TSLA responded positively as well for a couple minutes, but the pirates had other plans and immediately pushed TSLA back to where it was pre-market (nothing to see here folks, move along, move along).

At open with QQQ heading higher, TSLA began it's second attempt on a recovery but you know who bopped it and shortly after noon TSLA bottomed out below 218. QQQ traded rather neutral for most of the day and TSLA was a fairly easy capping target.

With a close at 218.89, TSLA was below both the 230 and 220 put walls on Friday and so rewarded those entities betting against the stock. While many of those puts were likely defensive moves by long investors, there's a good chance some were bets placed by the Wall Street manipulators themselves.

With max pain of 220 for this coming Friday (it'll probably be somewhat lower Tuesday morning after TSLA's $8.33 dip on Friday) the stock price is indeed getting close to the most profitable price for the options sellers as the big (nearly 3 million contracts) expiration approaches this week. After a dip from the 260s, you would think there'd be room for a bounce once the bottom is in and prior to the Jan24 ER.

Unfortunately, Elon gave the rabbid media a story to run with on Tuesday with this post on X.com about his desire to have 25% of the vote at Tesla in the future if it is developing ai products. I think this is a chance to let investors know what type of compensation package he might be seeking in the future. No doubt the board would require extraordinarily high stock appreciation to reach those compensation levels, just as happened in the 2018 package. No doubt, also, that the media will twist Elon's statements to suggest Elon is threatening to leave Tesla if his demands aren't met. Consequently, don't be surprised by yet another down day on Tuesday.

News:
* @avoigt posted on X and TMC that Tesla is advertising for engineers to be involved in the Optimus program. One of the desired tasks involves preparing for high-volume production
* Sawyer Merritt on X says that Panasonic is preparing to produce a new, higher power version of the 2170 cells this year in the Nevada Gigafactory

Percent of selling tagged to shorts came in at a very high 62%, suggesting lots of manipulations

Yields on 10 year treasury bonds decreased to 3.93%, following the cool PPI report

Max pain was 230 Friday morning before the big dip.

Friday's TSLA options volumes

Both max pain and stock price dropped substantially this week as we get ready for the big options close this coming Friday. Chart courtesy of @JimS

For this coming Friday, Jan 19, max pain was 220. Calls and puts are rather closely matched below 235's call domination until you get down to 200's big put wall.

Friday's big dip pulled TSLA well below the lower bollinger band.

For the week, TSLA closed at 218.89, down 21.56 from the previous Friday's 240.45. It's been a tough week for us TSLA longs as the stock is manipulated into position for Friday's options close, with the help of some negative news. Here's hoping you kept things in perspective and enjoyed time with those who matter most to you this past weekened.

Conditions:
* Dow down 118 (0.31%)
* NASDAQ up 3 (0.02%)
* SPY up 0 (0.07%)
* TSLA 218.89, down 8.33 (3.67%)
* TSLA volume 122.7M shares
* Oil 72.68
* IV 49.1, 47%
* Max Pain 230 for Jan12, 220 for Jan19
* Percent of TSLA selling tagged to shorts: 62%
* Volume at 4pm closing cross: 3.7M shares

 

[Papafox]

TSLA chart above

QQQ chart above

TSLA did the expected cliff dive shortly after market open as two factors coincided: 1) Wall Street pirates hoping to make a buck on another day of negative trading shorted after the market opened, and 2) some retail investors who didn't do their homework sold for fear that Elon would leave Tesla and take the ai creations with him. Alas, investors were willing to scoop of those shares when they approached 212 and once the strong recovery began it was off to the races. Note that TSLA wasn't pulled up by the macros, it was more the other way around. By 9:46 TSLA took its last break and then climbed mightily. Such a climb didn't start with QQQ and Nasdaq until 9:52am. That macro climb did give TSLA incentive to keep climbing well into the green (as it usually does following a quick escape from a pushdown). By afternoon TSLA was plodding along suspiciously level just above 220.

The concerns for Elon's comment about a compensation plan are definitely overblown. Elon can't take Optimus and full self driving with him if he left, those projects still belong to Tesla and its shareholders. Elon is on good terms with the board and has no plans to leave. Most of his wealth is tied up in this company. He just is setting expectations on what his priorities are in a future compensation deal. Please don't lose any sleep over this.

Translation: the bear attack we've been enduring recently could indeed be aimed at Jan19's options expirations. Max pain is 216.67 and we're in that vicinity right now. With no need to push TSLA lower, the percent of selling by shorts dipped way down to 46%, further supporting the theory that maximizing option seller profits on this Friday's options expirations was the incentive for the bear attack.

Wednesday would have been very interesting to watch without any negative news, but in fact some negative news has transpired in the form of sizeable European Tesla price cuts, according to this X.com post. Some honest dipping by market forces will likely result from that news, but of course the shorts will add to any negative movement. Keep in mind this is January, beginning month of the slowest quarter of the year for auto sellers.

Longtime Tesla bull and youtube channel provider Rob Maurer of Tesla Daily is retiring from daily posts to spend more time working at an investment group known as First Principles. We'll miss Rob.

Percent of selling tagged to shorts plunged to 46% as the option sellers grew content with TSLA's price as we head toward Friday's big options expiration.

Yields on 10 yr treasury bonds crept above 4% on Tuesday and closed around 4.05%

In case you're getting worried about inflation, consider the truflation.com chart above which shows current inflation to be 2.13%

Max pain once again dipped to 216.67 from 220. My guess is that the sweet spot for the option sellers might be between the put-dominated 220 and the call dominated 225 strikes come Friday. Rest assured, we will find out.

TSLA's option volumes on Tuesday

TSLA managed to rise back above the lower bollinger band on Tuesday

Conditions:
* Dow down 232 (0.62%)
* NASDAQ down 28 (0.19%)
* SPY down 2 (0.37%)
* TSLA 219.91, up 1.02 (0.47%)
* TSLA volume 115.1M shares
* Oil 71.79
* IV 48.2, 43%
* Max Pain 216.67
* Percent of TSLA selling tagged to shorts: 46%
* Volume at 4pm closing cross: 3.6M shares

 

[Papafox]

TSLA chart above

QQQ chart above

TSLA fell on Wednesday primarily due to market forces such as Nasdaq being down (0.59% dip of Nas X 2.1 beta = ~1.24% dip for TSLA) plus vehicle price cuts in Europe accounting for the rest of TSLA's 1.98% dip for the day.

I was going to include a chart to show the various bottoms of the past year's dips but @Artful Dodger gave us a good chart here in the main forum. In that graph, he shows that TSLA bounced off 212.xx on Tuesday and on August 18 the stock bottomed out and bounced at 212.xx as well. Technical traders consider such a turnaround price to be support for the stock. On Wednesday, TSLA bounced at 212.xx yet again. Hmm.

TMC's @NicoV made an excellent point here in the main forum that the big inventory discounts in Europe went away with the latest price cut there. In other words, Tesla's new prices aren't as much lower as the discount percentage suggests.

News:
* Dave Lee did a youtube video here on Tesla's Optimus folding laundry video. He basically sees the video as demonstrating the dexterity of Optimus's hands. He feels that balance is coming (other robots do it) and by getting the hardware right like this Optimus could see surprisingly quick growth of software that enables a plethora of useful tasks.

Percent of selling tagged to shorts remained low but rose to 48%, suggesting somewhat low downward manipulations

Yields on 10 year treasury bonds rose to 4.08% on Wednesday

Max pain Tuesday morning was 216.67, which changed to 215 by this evening. Strike 210 is strongly put-dominated, which suggests the market makers would not like to see TSLA that low, Strike 215 is also put-dominated. Strike 220 is neutral and 225 is strongly call-dominated, suggesting the sweet spot for the option sellers right now is between 215 and 225. If max pain is 215 then they'd prefer something along the lines of 215.01 for their Friday close.

Wednesday's options volumes

TSLA closed just right at the lower bollinger band on Wednesday

Conditions:
* Dow down 94 (0.25%)
* NASDAQ down 89 (0.59%)
* SPY down 3 (0.56%)
* TSLA 215.55, down 4.36 (1.98%)
* TSLA volume 102.5M shares
* Oil 72.81
* IV 48.1, 40%
* Max Pain 212.50
* Percent of TSLA selling tagged to shorts: 48%
* Volume at 4pm closing cross: 3.7M shares

 

[Papafox]

TSLA chart above

QQQ chart above

Sometimes the best defense is a good offense. That's the way I see Thursday's trading as the option sellers worked hard (and succeeded) in discouraging TSLA from climbing too far above max pain, which now comes in at 210 for Friday. A TSLA close down 1.7% at 211.88 on a day when the Nasdaq was up 1.35% should make my point. That's over a 3% gap between TSLA trading and Nasdaq trading.

Here's how they likely did it. In pre-market trading, TSLA was up along with the macros. Just a few minutes before market open you can see the beginning of the scheduled pushdown. I think they start the pushdown early when volume is low because it requires fewer overall shares to be shorted. From about 15 minutes prior to market open to about 1pm, TSLA descended with some ups and downs similar to QQQ, but continued its descent. Draw a line from just before open to 1pm and you will see what I mean. Whoever was operating the sledge-o-matic was doing A+ work. There was no news of substance for Tesla, and on both Tuesday and Wednesday the pirates could not get the stock to close below 212, a triple-bottom number. Thursday's effort was to finally conquer 212, and the day's close at 211.88 (just 12 cents below 212) did just that. A bounce on Thursday after a double-bottom 212 bounce could bring out the buyers and that would be bad news with so many options expiring on Friday. Thus the preemptive strike.

Percent of selling tagged to shorts wasn't overly high, a mere 50%, but trading during the 4pm closing cross was huge: 8.1M shares. That closing cross volume (plus the otherwise puzzling price action) suggests to me that the manipulations were large and the pirates merely borrowed a large number of shares from non-FIRNRA exchanges to avoid the scrutiny of regulators.

Yields on 10 yr treasury bonds continued to rise, closing at 4.16% on Thursday

Max pain Thursday was 210 That strike price is heavily put-dominated and so I don't see MMs wanting the stock price much below 210 on Friday's close. For those who don't believe in manipulations in this market, consider how improbable it is that the night before the big yearly options close, TSLA is trading within $2 of its max pain number of 210 (when it was trading above 260 less than a month ago).

Thursday's TSLA options volumes

For next Friday, Jan26, two days after the 23Q4 ER of Tesla, max pain is 230. Call domination begins at strike 220. That big put wall at 200 is something the MMs don't want to contend with. A close around 210 on Friday and a creep upwards in the stock price next week through the ER date would put TSLA in a comfortable position for the option sellers to once again do well.

All you have to do is look at the chart above to see just how manic-depressive this stock is. My belief is that the volatility is not accidental. Sometimes a dip is kicked off by legitimate news, sometimes not. Volatility leads to more trading in stock and options, and trading brings in lots of profits for the market makers and participating hedge funds. Pseudo-media companies such as Reuters add to that volatility with their exaggerated reporting and thereby enrich the market makers and hedge funds. We're talking about a big money machines my friends that neither the SEC nor the politicians are willing to rein in. You can defeat this volatility by hodling or by primarily making well-thought-out trades which you have the time to wait for them to turn positive, even with a few surprises along the way.

Conditions:
* Dow up 202 (0.54%)
* NASDAQ up 200 (1.35%)
* SPY up 4 (0.89%)
* TSLA 211.88, down 3.67 (1.70%)
* TSLA volume 108.0M shares
* Oil 74.03
* IV 47.7, 38%
* Max Pain 210
* Percent of TSLA selling tagged to shorts: 50%
* Volume at 4pm closing cross: 8.1M shares

 

[Papafox]

TSLA chart above

QQQ chart above

We've watched for weeks as the option sellers shorted and joined forces with their FUD partners to bring TSLA down nearly to the perfect closing price for this week's big options expiration. They missed max pain by a mere $2.19. Really, there's no need for a detailed analysis of the day's trading. There were simply too many marbles on the table for the option sellers to let exuberance creep into TSLA trading this week.

The Psychology
The net effect of a long-term pushdown of TSLA is that it disheartens some retail investors, who end up selling. This is the mechanism by which such pushdowns work. Of course the bots are dumb and tag along with the selling when the big pushdowns come, so institutional investors get hit, too. Nonetheless, if you've been reading the TMC investors forums lately you see examples of investors who lose sight of the upcoming catalysts and instead get fixated on the negative. Investors who react emotionally buy and sell at the wrong times. Don't do it. Although there has been some negative news in the past weeks (vehicle price cuts, Elon talking about the next compensation package, etc.), most of this dip from 260 has been the result of relentless FUD and clever manipulations. When the percent of selling by shorts charts are showing in the 50s and 60s, you can bet your bottom dollar that someone is leading the TSLA stock price in a desired direction. As for FUD, the failures of auto manufacturers to compete with Tesla has resulted in the story that nobody really wants EVs. The Hertz story was spun by Reuters to echo this theme. Nor have EVs become unable to cope with winter weather after the Chicago incident (just ask the better than 90% EV buyers in Norway). The lower the TSLA price goes, the more willing some TSLA investors are willing to accept such baloney as facts.

The Economy
Surprisingly, it looks like a soft landing lies ahead. Truflation sees only 1.85% inflation in the U.S. at the moment. The Fed is planning to cut rates later this year. Optimism about the economy and lower interest rates enable people to order a new vehicle.

Short Term Catalyst?
For the past few days the Teslasphere has been buzzing about robots. First came this Brighter with Herbert video in which investing legend Chris Camillo says that Optimus could result in 10 trillion dollars of market cap by 2030 (not including anything else at Tesla). His views really come down to the near inexhaustible demand for a truly functional humanoid robot. Next, Brighter with Herbert interviewed Brett Adcock, CEO of ai robotics company Figure, which has just inked a deal with BMW. From Adcock we learn of the significant interest out there for humanoid robots, mostly caused by companies being unable to hire and retain sufficient numbers of humans for many jobs. Adcock has been turning down requests for future customers. He alludes that the most difficult feat ahead will be manufacturing in volume (something that Tesla has the capital to do and the knowhow to do right). Then Randy Kirk and Scott Walker discuss how the BMW+Figure partnership has legitimized humanoid robotics and brought it to a place where Wall Street will be forced to recognize that there are huge dollars ahead for the big humanoid robot manufacturers. Let's see if Elon gets pertinent questions during Wednesday's ER. Bottom line: never believe that there can be no significant catalysts in the short term when dealing with Tesla. Analysts may or may not respond soon to this development. I wouldn't want to be on the sidelines in case they do, however.

Wednesday, Jan 24, will by the 4Q23 Earnings Report after market close. Should be an interesting week.

News:
* Telescope on x.com says that FSD ver 12.1.2 is going out to some customers including some with hardware 4
* Zanegler on x.com says that groundbreaking has begun on the semi-truck factory at Gigafactory 1 in Nevada.
* Hans Nelson on Brighter with Herbert says Panasonic may be able to deliver upgraded 2170 and 4680 cells to Tesla this year. The $4B investment by Panasonic in a Kansas factory has been known since July and construction is well underway. Now we know the factory is to produce for Tesla and batteries may allow Model 3 to qualify for the full IRA subsidy later this year.

Truflation's estimate of U.S. inflation is now down to 1.85%. The PPI inflation number for the past year is 1%. I'd suggest that the CPI number of 3.4% is overstating inflation, due to ridiculous delays in figuring cost of shelter, etc. OTOH, 10 yr. treasury bond yields are back above 4% again, so the market isn't yet buying the "inflation is dead" view.

Percent of selling tagged to shorts was a low 43%. Volume during the 4pm closing cross was a robust 4.3M shares, however, and I think the option sellers were again borrowing from non-FINRA exchanges or just plain naked shorting. The disparity between TSLA's 0.15% gain vs Nasdaq's 1.7% gain is just too large on a critical day for option sellers this year.

Yields on 10 yr. treasury bonds closed at 4.13% on Friday

Max pain on Friday was 210 and TSLA closed at 212.19, just $2.19 above. When you consider that TSLA descended from above 260 to land this close to max pain on the big yearly options expiration date, the chances of something like this happening for other reasons is really remote.

Friday's TSLA options volumes

@JimS needs to keep adding new rows of numbers below the previous chart to keep the lines on the chart. Hopefully, now that the option sellers have scored big profits from the big Jan19 options expiration, the stock price can recover some of the lost ground. Max pain for Friday is 230. Fingers crossed.

For this coming Friday, max pain is 230. A rise of $18 is not out of the question for TSLA, but if the option sellers pull some slight of hand, it might be downward pressure early this week to try and bring that max pain number lower for Friday and then allow a creep up to the new number. OTOH, they just might let the stock run. Very curious to see Monday's trading. This week we'll get a chance to see if the big push-down of the past several weeks was specifically aimed at Jan 19.

Judging from previous dips this past year, the current one may be played out. Wednesday's ER will affect the trajectory, one way or the other.

For the week, TSLA closed at 212.19, down 6.70 from the previous Friday's 218.89. Hoping you spent time with those who matter to you this past weekend. Looking forward to the week ahead.

Conditions:
* Dow up 395 (1.05%)
* NASDAQ up 255 (1.70%)
* SPY up 6 (1.25%)
* TSLA 212.19, up 0.31 (0.15%)
* TSLA volume 101.5M shares
* Oil 73.41
* IV 47.1, 35%
* Max Pain 210 for Jan19, 230 for Jan 26
* Percent of TSLA selling tagged to shorts: 43%
* Volume at 4pm closing cross: 4.3M shares

 

[Artful Dodger]

Stretched the NASDAQ realtime chart a bit for you: top-of-chart is now at $215. HTH.

 

[Papafox]

TSLA chart above

QQQ chart above

We saw two sides of TSLA today, both the Fear of Falling (FOF) and the Fear of Missing Out (FOMO). Our friendly neighborhood pirates arranged for a small Mandatory Morning Dip right after market open, but it was quickly defeated. The usual reaction to a defeated MMD is a climb into the green, but TSLA got hit with the whack-a-mole shortly thereafter, despite strong Nasdaq and QQQ. Alas, TSLA got away from it's handlers for 15 minutes around 9:45am and climbed to nearly 218 as those on the sideline sought to get back in. Too bad the macros lost most their gains as the day went on because I think the higher TSLA could climb, the more volume you'd see that would support a bigger climb. Mainsteam media was mostly quiet about the release of FSD 12 to a popular youtuber and to the incredible market for robots that was exposed last week through the BMW/Figure partnership.

Once TSLA descended below 210 the party was over and "we may still not be at the bottom" fever kept the stock in check. I'd say that we likely saw short shares used for the MMD and for capping the morning run into the green, but after that not much intervention was needed. We saw a hefty 4.6M shares trade during the 4pm closing cross, which suggests to me that the pirates were working the stock on Monday.

I think the option sellers may have positioned TSLA well for Friday's close, provided the results of Wednesday's earnings call aren't too strong or too weak. If TSLA has a max pain of 215 come Thursday, it won't take much tweaking to arrange for another particularly profitable week for the option sellers. OTOH, TSLA could indeed go lower as so many retail investors are now reluctant to catch falling knives and are waiting for a stronger indication that the bottom is in.

News:
* X.com's Whole Mars (Omar) received FSD 12.1.2 and produced a few videos. Here's a link to a daylight drive through San Francisco. The video is sped up and lasts about 3:30. Be sure to check out the excellent handling of passing a fire truck with firemen present. Later, Omar said there's an issue with driving on the highway in heavy rain, a discrepancy we were already aware of. Nonetheless, as a current FSD driver I see a much smoother operation with 12.1.2 and can't wait to try it myself.
* David Lee commented here in a video about impressions of 12.1.2. He's impressed and in a concise video gives a knowledgeable assessment of what this version means to Tesla FSD.
* Teslarati says that Tesla will open its first store in Chile this month. Chile is an excellent choice not just because of the country's potential market but also because of its geography. A long, slender country is a great place to begin a supercharger network because it can initially be done with a serious of stations running from north to south. Other stations can be added as needed but the whole country can be accessed before long with such an approach. Tesla will then be positioned to expand throughout South America.

Yields on 10 yr. treasury bonds closed slightly lower on Monday at 4.10%

Max pain dipped to 220 on Monday. Don't be surprised to see a 215 max pain on Tuesday or Wednesday. Whereas market makers are known for pushing the stock price lower at week's end to approach max pain, they're also quite happy to see stock price and max pain decline early in the week until its closer to the stock price that we could see on Friday's close. Options get rejiggered as the week goes on.

TSLA options volumes

Big price swing on Monday, up about 5 down about 5, closing down 3.4ish. Take a look at how many steep dips this past year were followed by steep climbs.

Conditions:
* Dow up 138 (0.36%)
* NASDAQ up 49 (0.32%)
* SPY up 1 (0.21%)
* TSLA 208.80, down 3.39 (1.60%)
* TSLA volume 116.6M shares
* Oil 75.19
* IV 49.6, 51%
* Max Pain 220
* Percent of TSLA selling tagged to shorts: 46%
* Volume at 4pm closing cross: 4.6M shares

 

[Papafox]

TSLA chart above

QQQ chart above

TSLA trading shared many characteristics with Monday's pattern. We saw a big jump higher shortly after market open with TSLA rising above 215 and then we saw the inevitable walking down of the stock price as volume decreased. Normally, I'd say the underperformance of TSLA compared to QQQ and Nasdaq could be explained simply by weakness stemming from the long dip we've been seeing, but despite a low 43% of selling tagged to shorts on Tuesday, I suggest we had the hand of the pirates at work today. First, TSLA is back into that strong in the morning/weak in the low volume afternoons scenario that we're all too familiar with. Nobody has ever offered a believable reason why TSLA just has trouble with afternoon trading (without mentioning manipulations). Second, we saw a nice resurgence in QQQ in the final hour and a half of market trading but TSLA just hung out near the red/green line. I suggest that manipulators other than market makers were at work here (hello, shorts!). Volume during the 4pm closing cross was a high 3.7M shares.

After Wednesday's market close we will see the 4Q23 numbers, followed later by the conference call. Analysts will be myopically focused on earnings per share (0.73/share expected) and gross margins.

There truly is a great disparity in views toward Tesla at the moment. Pundits such as Jim Cramer talk about whether the stock still belongs in the Magnificent Seven any longer (they still think Tesla is a car company) and analysts such as Wedbush's Dan Ives see Tesla as an emerging AI company that should reclaim a trillion dollar market cap before year's end. Check out this Solving the Money Problem video on the subject.

Could Tesla fall below analyst expectations of 73 cents/share earnings in Q4? Of course it's possible. Would Wall Street punish TSLA for a miss? Most likely, but consider that Tesla has already fallen about $50 as the ER approaches.

Considering the above, did I spend the day clutching my prayer beads? Nope, I became a binge YouTube viewer as I took in the many FSD 12 videos that Omar (Whole Mars Catalog) has been uploading. Watching that Tesla navigate the streets of San Francisco so expertly is intoxicating for those of us who have FSD on our current vehicles and know the scenarios where V11.x simply falls short. If end to end neural net process can produce such stunning results in so short a time, what is possible over the coming year as Tesla adds an order of magnitude more compute for FSD to be trained on? This is an exciting time. I predict that FSD purchases and subscriptions will show a noticeable uptick when the quality of FSD becomes known. That uptick translates into Tesla revenue with very little cost attached. When other countries are added to FSD availability, the first quarter such an offering is made within will see a very nice spike in revenue. Can't wait on all accounts, and excited about Optimus as well.

News:
* Sawyer Merritt reports on X that Tesla has told suppliers about a compact SUV codename "Redwood" it would like to produce beginning in June 2025

Percent of TSLA selling tagged to shorts fell back to 43% on Tuesday

Yields on 10 year treasury bonds closed at 4.12%

Max pain Tuesday was 217.50, about $8 above the current stock price. Strike 200 has a big put wall and strike 220 has a tall call wall.

Tuesday's TSLA options volumes

The rapid descent from the 260s has turned into capitulation near 210 as the earnings call looms after close on Wednesday

Conditions:
* Dow down 96 (0.25%)
* NASDAQ up 66 (0.43%)
* SPY up 1 (0.29%)
* TSLA 209.14, up 0.34 (0.16%)
* TSLA volume 105.3M shares
* Oil 74.46
* IV 49.6, 51%
* Max Pain 217.50
* Percent of TSLA selling tagged to shorts: 43%
* Volume at 4pm closing cross: 3.7M shares

 

[Papafox]

TSLA chart above

QQQ chart above

TSLA missed the earnings per share by a couple pennies (0.71 vs. 0.73/share) and gross margins excluding credits were 17.2% instead of 16.3% in Q3, as noted by TMC's @Singuy . The latter improvement was made possible by major cost cutting of vehicles that brought average cost down to 36K.

So, why the big dip, then? Part of the issue was that Tesla didn't announce projected vehicle deliveries for 2024. Mr. Market then assumes the worse. Also, according to @Big Time in this post, TSLA lost between 9 and 10% following each of 2023's previous earnings reports. It seems the market is ready to punish anything that isn't a clear beat.

We learned that Gen 3 will aspirationally be delivered in 2nd half of 2025 and we could see Optimus delivered in that same time frame. Judging from the progress with FSD version 12, there's a chance we could see government approval at or before that timeframe and a nice increase in FSD revenues well before approval. Looks like 2025 could be the golden year, but markets are forward looking and you'd expect to see a run higher before then.

Looking at the tech chart at far bottom, you can see that the early November dip got into the 190s and bounced, so we may find some support there on Thursday (or not). My overall feeling is that with FSD, Optimus, and Gen3 on track plus 4680 production to increase significantly in 2024, there are powerful reasons to be holding this stock into the future but it's important to keep this longer investment horizon in focus.

Yields on 10 year treasury bonds closed at 4.16% on Wednesday

Max pain was 217.50 on Wednesday. Notice the high put wall at 200. Market makers would probably appreciate TSLA closing above 200 on Friday, but the MMs are not typically helpful for pushing this stock upwards.

TSLA options volumes on Wednesday

After TSLA leveled out around 210 for a few days the earnings report gave Mr. Market a shiver and we saw close to 195 in after hours trading

Conditions:
* Dow down 99 (0.26%)
* NASDAQ up 56 (0.36%)
* SPY up 1 (0.11%)
* TSLA 207.83, down 1.31 (0.63%)
* TSLA volume 110.9M shares
* Oil 75.39
* IV 52.6, 62%
* Max Pain 217.50
* Percent of TSLA selling tagged to shorts: 46%
* Volume at 4pm closing cross: 3.7M shares

 

[Papafox]

TSLA chart above

QQQ chart above

Thursday's dip of 12.13% was unpleasant to say the least, but not too far from the typical 9-10% dips we've seen after the other three 2023 earnings reports. The media had a field day of proclaiming doom for EVs in 2024 after the ER. Reading the reports, you would think that Tesla couldn't give away vehicles, but in fact Tesla will sell more cars and trucks in 2024 for greater total revenue than in any previous year. Nonetheless, other EV manufacturer's have had serious trouble competing with Tesla, which has led to surplus EV inventory. That inventory must be moved through discounting, and I'm sure Elon and our CFO are familiar with that particular hurdle in the early months of 2024, which may have influenced their conservative tone regarding growth in 2024. The bigger story is that Tesla outperformed the competition so greatly that it's going to take some time to clean up the battlefield. Elon spoke of Optimus becoming the biggest product that has ever been offered, he spoke of the breakthrough of V12 FSD, and he gave some info on Gen 3. It's in Tesla's advantage to sandbag on the beginnings of deliveries date. As expected, Wall Street largely ignored these words of future products and instead sulked over not being given questionable delivery numbers to place into their spreadsheets.

Looking at the charts above, TSLA would have lost 10% and activated the alternative uptick rule around price 187, but we don't see much of a change in downward trajectory at that price, suggesting to me that shorting at that time wasn't much of a factor in the descent. There were plenty of retail and institutional investors willing to give up their shares in the hope of rebuying lower, or perhaps they were just tired of the roller-coaster ride. Instead of typical volume of around 118M shares we saw a whopping 196M trade hands on Thursday.

So, on Friday with the Alternative Uptick Rule in effect, shorting to push the stock price lower will be more difficult and less effective (but capping would not be affected). If you are a buyer, try to get some indication that the price has bottomed out before pulling the trigger. Monday morning could potentially be a gap up bounce if nothing positive happens on Friday.

Yields on 10 yr. treasury bonds closed at 4.11% on Thursday morning was 215

Max pain Thursday morning was 215. There's a sizeable put wall at 180 and I suspect the market makers would prefer that TSLA remain above that number on Friday's close. The market makers haven't shown themselves to be too much help in the past in elevating TSLA in weak weeks, but the good news is they're not pulling down on Friday, either.

Thursday's TSLA options volumes

Thursday's red candle is officially Ugly. TSLA is about $7 below the lower bollinger band but you can't expect support from the lower bb when it is near vertical and chasing the stock price.

Conditions:
* Dow up 243 (0.64%)
* NASDAQ up 29 (0.18%)
* SPY up 3 (0.54%)
* TSLA 182.63, down 25.20 (12.13%)
* TSLA volume 196.1M shares
* Oil 76.96
* IV 44.1, 14%
* Max Pain 215
* Percent of TSLA selling tagged to shorts: 45%
* Volume at 4pm closing cross: 6.5M shares

 

[Papafox]

TSLA chart above

QQQ chart above

After Thursday's big dip, Friday's close in the green was a welcome change. Friday's max pain was 192.50, which suggests the 50% of TSLA selling tagged to shorts was not likely the work of market makers but rather the work of hedge funds and shorts benefitting from a further dip of TSLA. Clearly the stock was ready to recover some lost territory on Friday but the big QQQ dip in early afternoon likely affected the stock's ability to hold those gains. Note, though that TSLA recovered to nearly 184 in after hours trading, which bodes well for this coming week.

Speaking of this coming week, it is the week following six red weekly candles, a situation we've only seen three times before. In each of those cases, the week following the six negative TSLA weeks was a positive week with gains ranging from 6% to nearly 11%. Check out the x.com post. Does this mean TSLA will be up this coming week? Sorry, there are no guarantees, but it does show likelihood of a climb.

Some TSLA investors have noticed nice prices on options after the ER. As a rule, IV (Implied volatility) runs higher before an earnings report and then drops noticeably right afterwards. The IV on Friday was only lower 4% of the time in the past.

To review the week, TSLA had been leveling off around 210 when the ER happened on Wednesday and the lack of delivery guidance gave Wall Street its excuse for the typical post-ER selloff, but one a couple percent deeper than others for 2023. Because TSLA had already been pushed down $50 prior to the ER, the dip felt particularly painful. Meanwhile, Tesla shared V12 of FSD with Whole Mars, who has been very busy with a string of youtube and X.com videos showing this early version of end-to-end neural-net created FSD is so much better than V 11 on a wide range of issues. The negatives mostly include failure to proceed once stopped for a stop-sign in unusual situations, but this is the kind of issue that is easily addressed by the driver (give it a little accelerator pedal when safe to proceed) and perhaps easily addressed in training. VERY excited to try V12 in the coming weeks.

Lots of earnings reports in the coming week. Expect volatility.

* Cybertruck Vin 1000 has just been delivered in this x.com post

truflation.com says the U.S. inflation rate is now 1.81%

Percent of TSLA selling by shorts rose to 50% on Friday. Something I'll be watching in the coming week is the reason behind any percent of selling number approaching 60% or higher. If the stock price is approaching 187.50 (maybe within $2) then I would say it's your typical market maker intervention. If the high shorting comes at a lower price, then we have something more curious taking place.

Yields on 10 year treasury bonds closed Friday at about 4.14%

Max pain from this past Friday was about 197.50. Notice the big put wall at 180. Despite an uptick in selling tagged to shorts to 50%, we still managed to stay above 180. Methinks the market makers might have even helped on this one.

Friday's TSLA options volumes

What's fascinating about this chart is how close max pain and closing price came together on each Friday. That takes some serious management by the market makers and other option sellers. The previous week's close was only possible with several weeks of walkdown prior. Again, I don't think the interns were in charge of the TSLA whack-a-mole this past month. The descent was just too well-orchestrated for chance. Chart courtesy of @JimS

For this coming Friday, max pain is 192.50. Strikes 187.50 and 190 are the tall call walls that the market makers will work to protect in the event of a price recovery.

Our friend the blue 50 day moving average was doing a commendable job of climbing away from the red 200 day moving average up until the last couple weeks. It's crossing below the 200 DMA would give the technical traders a small conniption.

For the week, TSLA closed at 183.25, down 28.94 from the previous Friday's 212.19. Hoping you spent your weekend with those who matter most to you. Let's also hope this is the end of that long string of down weeks and some rebound lies ahead.

Conditions:
* Dow up 60 (0.16%)
* NASDAQ down 55 (0.36%)
* SPY down 1 (0.13%)
* TSLA 183.25, up 0.62 (0.34%)
* TSLA volume 106.9M shares
* Oil 78.01
* IV 42.3, 4%
* Max Pain 192.50 for Jan26, 192.50 for Feb2
* Percent of TSLA selling tagged to shorts: 50%
* Volume at 4pm closing cross: 4.2M shares

 

[Papafox]

Note the 0.87% after-hours increase

TSLA chart above

QQQ chart above

Hello longs, what an excellent trading day we saw on Monday. To set a bottom for this long cliff dive from the 260s we needed a strong rebound day. Friday's gains were so meager they didn't count. With TSLA on sell cheap, and with a weekend to ponder the situation, plenty of potential TSLA investors were watching the stock price Monday morning to see if it was indeed safe to buy in again. I suspect the usual suspects were busy at work Monday after market open, working the stock price down to a minimal gain to keep the troops from getting excited. Around 10:30am TSLA started a big run higher and you can see that volume picked up noticeably as that big run higher was a suggestion it was time to get back into the stock.

The macros likely rose because of news that the annualized 4Q23 GNP came in at 3.3% according to the Bureau of Economic Analysis, a number not too hot nor too cold. In contrast, the New York Fed is giving a 63% chance that the economy enters a recession before year end.

As TSLA crossed above 190 in late morning it appears that the big option sellers (market makers and hedge funds) turned on the sledge-o-matic first to cap TSLA and then to bring it down no higher than 187.50. The stock price line between 11:36am and 12:30pm looks just too straight to be the result of random forces, particularly when you note that QQQ was heading higher at the time. Around 2:30pm the sledge-o-matic ran low on juice, just a couple dimes below the desired 187.50. With QQQ and Nasdaq continuing to rise, TSLA reversed the descent and started climbing with the macros. At 3pm you can see a vertical rise in QQQ as that index went ballistic and TSLA followed suit. TSLA closed market trading hours up 4.19%, an approx. 3.75X of Nasdaq's 1.12% climb.

In after hours trading, QQQ lost 0.12%, in contrast with TSLA's gain of 0.87%. TSLA's strength after hours bodes well for its opening on Tuesday.

As a general rule, market makers would prefer for TSLA to make a big move up or down early in the week so that options could be rejiggered during the week for a better convergence of the max pain and stock price numbers. The problem with a day like Monday, however, is it marks a change in momentum for the stock and if this week follows the model set by the previous three recoveries from a dip of six consecutive weeks, the stock should go up somewhere between 9 and 16% for the week. The flip side is that nothing in investing is set in stone and a hiccup in the macros and/or a convincing and strong FUD story could upset the process that has begun.

News:
* @Alex_avoigt says that production at GigaBerlin has been shut down until February 11, as previously announced.
* Elon says that Neuralink has done its first human brain implant

Yields on 10 yr. treasury bonds came in at 4.08% on Monday

Max pain Monday morning was 187.50. TSLA has already climbed well above that level. Notice that the 190 strike, which was a tall call wall on Friday, has shrunken immensely and is now just a dot on the side of the 187.50 call pyramid. MMs would like to get TSLA back down below 187.50 but with increased volumes and investors smelling a turnaround, they make be unable. The next sizeable call wall is at 200, so expect a fight there if TSLA climbs to that level.

Monday's TSLA options volumes

Time for a rebound? The market certainly suggested that on Monday.

Conditions:
* Dow up 224 (0.59%)
* NASDAQ up 173 (1.12%)
* SPY up 4 (0.79%)
* TSLA 190.93, up 7.68 (4.19%)
* TSLA volume 125.5M shares
* Oil 76.95
* IV 40.3, 0%
* Max Pain 187.50
* Percent of TSLA selling tagged to shorts: 53%
* Volume at 4pm closing cross: 7.5M shares

 

[Papafox]

TSLA chart above

QQQ chart above

Tuesday was a stronger day during market hours than QQQ and Nasdaq, and so the rebound was still doing well. Unfortunately, after hours a Delaware judge voided Elon's 2018 compensation plan, some 54 billion dollars worth. It's truly remarkable that a shareholder with 9 TSLA shares (might even have been short) was able to convince the judge to throw out the overwhelming approval of the plan by the other 99.999999% of TSLA shareholder. Sigh.

Mr. Market is generally a worrier and I was frankly surprised that we didn't see more of a dip after hours. You can see a big QQQ dip as the market was not happy with guidance from Google and Microsoft. QQQ didn't recover much but TSLA did. I would expect to see a bigger TSLA reaction on Wednesday with negative macros. Of course the shorts may jump in to add to any dip, and once TSLA is below 187.50, the market makers might actually try to soften any dip. Strikes 175, 180, and 185 are all tall put walls that the MMs would prefer to not pay out. The problem with trying to trade on such a dip is that it starts with a gap down (most likely) and could reverse should the Tesla board and Elon post comments that show a reasonable plan for getting a new compensation package created and approved by shareholders. In theory, they could have prepared a response, just in case. Chances are the board is going to be careful going forward, though.

Percent of selling tagged to shorts rose to 54% on Tuesday, suggesting substantial and growing manipulations. Clearly the market makers aren't happy that TSLA has risen above the big call wall 187.50

Meanwhile, yields on 10 yr treasury bonds continued to fall to about 4.02%

Max pain Tuesday morning was 187.50 Look at that string of tall put walls at 185 and below. The MMs would prefer a close between 185 and 187.50 at the moment.

Tuesday's TSLA options volumes

The last three days of trading looked like a nice bounce off the bottom of this dip, but I suspect the Delaware court action will cause a bigger disruption on Wednesday than the after-hours trading suggests.

Conditions:
* Dow up 134 (0.35%)
* NASDAQ down 118 (0.76%)
* SPY down 0 (0.08%)
* TSLA 191.59, up 0.66 (0.35%)
* TSLA volume 106.9M shares
* Oil 77.61
* IV 40.7, 1%
* Max Pain 187.50
* Percent of TSLA selling tagged to shorts: 54%
* Volume at 4pm closing cross: 3.7M shares

 

[Papafox]

TSLA chart above

QQQ chart above

The market was much kinder to TSLA than I expected on Wednesday and the stock even went green for a few moments in the afternoon. Considering how the media could have run with the story, I think we did well.

Nonetheless, right after the big macro bump upwards at about 2:45pm, both QQQ and TSLA descended into close. QQQ lost about 1.3% from the bump while TSLA lost about 3.2%., Seems pretty high, particularly with TSLA outperforming the Nasdaq previously. Alas, take a look at the almost linear descent of TSLA into close for the final 35 minutes and compare to QQQ. Looks to me like someone turned on the sledge-o-matic for TSLA over that time span. Moreover, the closing price of TSLA was 187.29, just 21 cents below the Everest-tall call wall at 187.50. Coincidence? I think not. Bringing TSLA a smidge below the tallest call wall looks like a better strategy at this time in the week than shooting for max pain at 190 because you're keeping both big call walls out of the money.

Percent of selling tagged to shorts came in at 49%, enough perhaps to enable the final 35 minute pushdown. More telling, though, was the massive 6.5M shares traded in the 4pm closing cross. Mischief was afoot my friends.

Developments in the Delaware judgement against Elon includes this poll by Elon where 87% of respondents think that Tesla should move its incorporation to Texas. Elon commented that Tesla will do this. That move would keep Elon from facing the wrath of the antagonistic Delaware judge should a future corporate issue bring Tesla back into court. With Elon's ire directed at Delaware and its Chancellory court, Mr. Market figured that the board and Elon are putting together a plan. Meanwhile, more voices are suggesting that appealing the ruling might be needed since putting together a new compensation package at this new stock price might be very laborious. Finally, public opinion is that the judge in Delaware was showboating and going after Elon's comp package in a manner that is not typical in that court.

In any event, TSLA outperformed Nasdaq right up until the sledge-o-matic was switched on and providing the news is positive on Thursday there's an opportunity to resume the recovery climb. Fingers crossed.

News:
* Sawyer Merritt has posted on X.com that GigaNevada is acquiring surplus equipment from CATL for creating LFP cells for megapacks. CATL personnel will set up the equipment and Tesla will run it. We're seeing the opportunities with EV battery supply in China exceeding demand at the moment.

On Wednesday yields for 10 yr treasury bonds fell below 4% once again, to about 3.93%

Backing up the falling inflation suggested by the 10 year treasury yields, Truflation.com says inflation in the U.S. has just plunged to 1.44%

Max pain Wednesday morning was 190. Looking at the open interest chart above, though, 187.50 is the mega call wall, with 190 containing only about 2/3rds the contracts of 187.50. The market makers would prefer to keep the stock price right between the 185 puts and the 187.50 calls. Any question why the stock made a beeline to get a few pennies below 187.50 during the closing minutes?

TSLA Wednesday options volumes

I was happily surprised to see Wednesday's stock performance being about even with the Nasdaq's. TSLA can resume the bounce after Wednesday if news and macros allow. The crossing of the 50 DMA below the red 200 DMA is not as big a deal if it happens on a day when the stock is climbing.

Conditions:
* Dow 317 (0.82%)
* NASDAQ down 346 (2.23%)
* SPY down 8 (1.63%)
* TSLA 187.29, down 4.30 (2.24%)
* TSLA volume 100.7M shares
* Oil 75.80
* IV 41.0, 2%
* Max Pain 190
* Percent of TSLA selling tagged to shorts: 49%
* Volume at 4pm closing cross: 6.5M shares

 

[Papafox]

TSLA chart above

QQQ chart above

TSLA came into Thursday's trading with strong investor sentiment. How do I know? Check out the pre-market trading that averaged about 190. Once the market trading began, however, it was time for the options sellers to crank up the sledge-o-matic and minimize the damage on a day when the Nasdaq was trading quite positively. The method they used didn't include a mandatory morning dip, I think the reason why is that the MMD would have been quickly bought and then turned into a rally. Instead we saw a QQQ dip of a bit below 1% from 10:30ish to 11am-ish and TSLA, which had been under pressure by the sedge-o-matic since shortly after market open, did a disproportionately large dip during this time. After that dip, QQQ pretty much climbed for the rest of market hours. TSLA, otoh, languished in a game of whack-the-mole at or near the red/green transition line. Finally, in the last hour and a half, the gains of the macros were just so great that TSLA had to climb some and tag along. Nasdaq gained 1.3% for the day and TSLA 0.84%.

Then came after-hours trading Meta gained 15% and Amazon 7%, plus some smaller companies did well, too. QQQ gained nearly another 1% after the bell. In contrast, TSLA gained only 0.38% after hours. What's up? TSLA has lots of options in play this week and they're very heavily crowded between 185 and 195. If TSLA closed above 195 the option sellers are going to see 125K contracts move into the money this week. They have lots of incentive to minimize TSLA's climb above the 187.50 max pain number. With strong earnings reports Thursday after hours, tech-like stocks are going to see a strong open on Friday. One possibility is a strong TSLA open and a walkdown. Another possibility is TSLA getting away from the MMs during the attempted walkdown and galloping upward (where the market would have priced the stock without the shorting). Can't wait to see. Of course Friday is a likely time for more FUD to appear. Never a dull moment here with TSLA.

On Thursday we saw 53% of TSLA selling tagged to shorts, suggesting moderately high levels of manipulation

Yields on 10 yr. treasury bonds closed down again at 3.88%

Max pain Thursday morning was again 187.50. Notice the big put wall at 185 gives the market makers a very narrow target for Friday's close. Strikes 190, 192.50, and 195 are all above 25K contracts apiece and a threat to a big Friday rally if the pirates can't hold TSLA back.

Thursday's TSLA options volumes

The blue 50 day moving average completed its pass below the red 200 day moving average.

Conditions:
* Dow up 370 (0.97%)
* NASDAQ up 198 (1.30%)
* SPY up 6 (1.31%)
* TSLA 188.86, up 1.57 (0.84%)
* TSLA volume 91.2M shares
* Oil 74.26
* IV 39.5, 0%
* Max Pain 187.50
* Percent of TSLA selling tagged to shorts: 53%
* Volume at 4pm closing cross: 3.3M shares

 

[Papafox]

TSLA chart above

QQQ chart above

Well, if it worked on Thursday they might as well try it on Friday too. On both days, the NASDAQ closed way up: 1.3% on Thursday, 1.74% on Friday. To keep TSLA from tagging along (or even worse, climbing at 2.1X the NASDAQ climb) the pirates used the same technique two days in a row: a good offense equaling the best defense. Thus, we saw a pushdown shortly after market open on Thursday that brought TSLA well into the red until it could bounce back somewhat in the afternoon. For Friday, the classic pushdown approaching market open suited the needs, along with some skillful capping around 183. Alas, TSLA said "phooey with this" around 1pm and started for the green, but the option sellers were able to hold TSLA very close to max pain 187.50 for the close. Sigh.

Three different views of why TSLA trades as it does.

Brighter with Herbert interviewed Mark Newton, a technical chart guy with FundStat, and we learned his prognosis for TSLA according to the technical chart tea leaves. Newton believes there could be more dip ahead of TSLA in the short term but the stock should bounce this spring and might climb for most of the remainder of the year. If it rises above 265 he believes TSLA has a clear shot at a new ATH.

Herbert Ong also interviewed analyst Dan Ives. Ives remains bullish on TSLA long term but he has been critical of Tesla's earnings conference calls ever since Zach departed the company. Ives believes that analysts want "guardrails" so that they don't get blindsided at an earnings call and see a big dip of the stock price when it was unnecessary. He's a believer in giving shareholders and analysts a best guess on yields because this is a metric that is much harder to figure than deliveries. He believe that poor communications from Tesla is heavily responsible for the stock having far below average holdings by institutional investors.

Then there's the Papafox explanation. As you can see by the 11 year chart of TSLA below, the stock trades relatively level for years at a time and then makes these giant leaps upward. My belief is that since options are so plentiful at TSLA you get a case of the tail wagging the dog. In other words, you see option sellers manipulate TSLA without mercy most weeks in an effort to bring about a Friday close that is close to max pain (or best nearby alternative target). Such efforts over the long run tend to stifle large increases in stock price (thus the long periods of relatively flat trading). Note that in the past 12 months we've seen what appears to us to be large runs up and down, but when you graph the stock performance on a log chart you get what you see below. A good example would be the past two days of trading when TSLA rising with the macros was incompatible with the needs of the option sellers and they managed to prevent TSLA from climbing. If market makers string manipulations of this sort together long enough, the stock price appears to be stuck. What eventually frees the logjam is news that is so compelling that an entirely new level of profitability is envisioned for TSLA. When that happens, the stock price increases several times over and it's off to the races. No market makers and hedge funds can hold TSLA back when it is in beast mode. Tesla reaching profitability with Model S in 2013 produced the first big jump. Around October of 2019 the market saw the production hell of Model 3 disappearing as Model Y was introduced. Boom, up she went! My guess is that the next big upswing takes places when Full Self Driving matures and it's apparent it will become a cash cow, Optimus development moves far enough along to excite with production estimates, yields, and demand, and finally Gen 3 becomes ready to launch. Amazingly, all three of those events could happen together in 2025. Normally, you see the market anticipate such events and prices start to rise well ahead of time, but remember that the manipulation of the stock to maximize options profits for the sellers holds TSLA back.

Why not just sit out the next year, then? Well, a run to 400 would more than double the stock price but wouldn't be an enormous blip on the chart below. Do I want to miss that jump? Nope. I also look at Elon's 2018 comp package and how closely he managed to guess where the stock price, profitability, and deliveries were heading. Now he's talking about Tesla producing a higher market cap than Apple and Aramco combined. With FSD (and robotaxi), Optimus, and Gen 3 coming along, that far-fetched goal actually looks achievable. this decade. It's not guaranteed, but it's possible.

News:
* TSLA investors led by Amy (with help from Teslaboomermama and others) have sent a letter to Tesla's board of directors requesting confirming that they voted for Elon's pay package, they understood his relationship with the various directors, and they want him compensated fairly for his efforts. Over 4 days they managed to get more than 5800 shareholders to join the petition, and this group represents over $4.3 billion woth of TSLA. Their hope is that this petition can be submitted in any legal battles to outweigh the claims of the Delaware judge who suggests her actions are in the interest of TSLA shareholders. Looking forward to seeing what happens from here.
* Tesla has raised the price of Model 3 LR by $1000 in the U.S.
* GigaBerlin just hit a 6K vehicles in one week record (prior to the necessary two week shutdown)
* Tesla is once again offering transfer of full self driving and earlier announced transfers available for those whose current vehicles have unlimited free supercharging. Model 3 was originally excluded but may have been added into the FSD transfer

Friday's close of 10 yr. treasury bond yields was about 4.02%, We can see a peak into this coming week, which is already up to nearly 4.08%

Max pain Friday morning was 197.50 (sound familiar?). Strikes 190, 192.50 and 195 were all high call walls that the market makers didn't want to pay off. In the end, TSLA closed 41 cents above max pain of 187.50, not enough for the call buyers to recover anywhere near their time value on those calls. Market makers win again.

Friday's TSLA options volumes

What can I say, the market makers are using the A team (not the interns) this past month to walk TSLA down so that it could close close to last Friday's important yearly options expiration max pain. This week, they managed to keep TSLA level even though the Nasdaq increased more than 3% in the final two days. The problem is that what they're doing is neither ethical nor legal. Chart courtesy of @JimS

For this coming Friday, max pain is showing 190. Strike 190 is pretty much at the neutral point between calls and puts with 187.50 now put-dominated and 195 and 200 tall call walls.

Conditions:
* Dow up 135 (0.35%)
* NASDAQ up 267 (1.74%)
* SPY up 5 (1.05%)
* TSLA 187.91, down 0.95 (0.50%)
* TSLA volume 109.9M shares
* Oil 72.28
* IV 40.4, 1%
* Max Pain 187.50 for 2/2, 190 for 2/9
* Percent of TSLA selling tagged to shorts: 49%
* Volume at 4pm closing cross: 5.4M shares

 

[Papafox]

TSLA chart above

QQQ chart above

Egads, how to explain Monday's trading? We know that the January employment report came in strong, which is why yields on 10 year treasuries (and 30 year mortgages) were up. A smidgen higher interest rates couldn't have explained TSLA's outsized dip.

Another clue was TSLA volume was quite a bit higher than an average day these past weeks, up to 133.8M shares on Monday. Someone was doing some serious selling. A post in the main thread by @UkNorthampton (showing a Bradford Ferguson Tweet) may be the most helpful as apparently there was a big selloff in a sector of China's market and TSLA was a component of many ETFs that were sold.

Of course the shorts will jump on any dip and enhance it. Nasdaq dipped 0.8% between market open and 10:46am while TSLA dropped 4.5%. Further, NASDAQ recovered all the losses of the dip by a couple hours later but TSLA carried half that dip into close. The good news is that I see no actual news to suggest anything is amiss at Tesla.

That said, the FUD at the moment is atrocious. When other U.S. carmakers could not compete profitably with Tesla in the EV space they backed way off on production while licking their wounds and trying to figure how to be competitive. The story they hatched was that their efforts with EVs were just too much too soon. U.S. motorists aren't interested in EVs yet. Hertz only magnified this viewpoint. The thing is that Model Y became the best selling vehicle of any kind in the world this past year. Someone is taking Tesla EVs seriously. Some pundits are calling for years of wait before EV sales recover, but I'd just like to mention that we could see Gen 3 in 2025, with Cybertruck production ramping and an excellent upgrade to Model 3 hitting U.S. showrooms just now. Larry Lunchbucket may fall for the FUD, but I choose not to, Better days lay ahead.

Yields on 10 yr. treasury bonds were sinking last week but they're heading higher this week. Close was 4.12% on Monday.

Max pain Monday morning was 192.50. That number was comfortably between the put and call walls. After Monday's big dip the options will rejigger as the week goes on. The tallest put wall is at 180 strike and the MMs would prefer not to go below it.

Monday's options volumes

You can see the fallout from the Wednesday dip due to the Delaware judge's ruling. It disrupted the recovery from the low at a critical time. That loss of momentum allowed Monday's dip to occur.

Conditions:
* Dow down 274 (0.71%)
* NASDAQ down 31 (0.20%)
* SPY down 2 (0.36%)
* TSLA 181.06, down 6.85 (3.65%)
* TSLA volume 133.8M shares
* Oil 72.93
* IV 42.5, 7%
* Max Pain 192.50
* Percent of TSLA selling tagged to shorts: 48%
* Volume at 4pm closing cross: 5.4M shares