The reason I said lots of loose ends were tied up is because the topping process in August - September was extremely confusing. It was impossible to tell with certainty whether TSLA was making a local top of an impulsive series, meaning 207 in June was the bottom. Like this:
View attachment 873309
Or the entire run up from 207 was a corrective series and TSLA was working on the first stage of another down leg in September, like this:
View attachment 873310
Now that the down leg scenario has played out, it seems obvious but 2 months ago it was confusing to everyone involved. The result was longs were hesitant to get out and shorts were hesitant to stay in. Coupled with Q3 P&D hype, TSLA was so damn strong relative to the market.
Once a new low was made @ 198.5, it became apparent that a lot of people were trapped up top and now they're trying to get out, which is why the initial bounce off 198.5 was so weak, only good for 35-39 points.
Maybe Elon's selling was known or at the minimum expected by bankers close to him. Maybe that's why we saw massive put bet on TSLA last Thursday just before the plunge. I demand answers!
Well, back to the plunge. It answered a few important questions:
1/ The double top formation in late August - September was the beginning of wave 1 and 2 of a large impulse series. It's not typical for wave 2 to retrace 100% of wave 1 like this but like I said, this was a confusing chart.
2/ The plunge since last Friday - early this week COULD HAVE BEEN wave 5 of this impulse series, meaning this could be THE low for TSLA. I don't expect any lower low to be made. I'm more sure of this than I did @ 198.5.
The complete picture:
The last stage of this correction began in early April and ended yesterday. It came in a zig zag formation: an impulse series, followed by a corrective expanded flat, follow by another impulse series. This is a complete formation.
The 2nd impulse series went 0.764x the length of the first impulse series
Wave 5 of the 2nd impulse series extended 1.618x of wave 4
Double bullish divergence was observed on the daily timeframe, showing exhaustive selling pressure. Kinda hard to believe considering Elon was selling the whole time but that's what the chart shows.
View attachment 873324
Bounced right at the channel support
View attachment 873325
Log scale support trendline right below @ 170. You can see how this support trendline has supported and rejected TSLA multiple times since 2010.
View attachment 873326
Confirmation: As I mentioned earlier. I want to see TSLA pulling back after 207-215. Might go as far as 230. This pullback will be deep, retracing at least 50% of the initial bounce from 175. However, at the end of the pullback, I want to see double bullish divergence on a 1h+ timeframe. It cannot go lower than 175, preferably no lower than 180. If something as impulsive as this week sell off happens, then we haven't seen the low yet and I have to rework the chart.
Can I guarantee the low is in? No. But, all the ingredients are finally here in term of price and structure. Now we just need TSLA to execute Q4 and Elon to say he's done selling. Well, if you subscribe to the idea that someone always knows, then maybe someone already knows Elon is close to being done. That's why the stock got to where it got to but not any lower.