Short-Term TSLA Price Movements - 2016

[Robert.Boston]

This is definitely not like 2008 but every indicator is screaming recession in the US. Atlanta Fed is estimating 0.7% GDP growth for Q4 which is very close to recession. And this was for what should be a good holiday quarter.

The Atlanta Fed recently updated the estimate of the 2015 Q4 GDP growth, revised upwards to 1.0%:

The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2015 is 1.0 percent on January 6, up from 0.7 percent on January 4.

The upward revision was largely due to stronger than expected exports; the Atlanta Fed's model had predicted a bigger hit from the strong dollar than has actually occurred.

That said, the stock market is usually a leading indicator, so it could still be the case that the majority of investors see the U.S. slipping into recession this year. IMO, if a recession occurs, it will be because the U.S. economy is dragged down by larger recessions elsewhere in the world and, therefore, that U.S. stocks will be stronger buys than others (on average).

 

[Julian Cox]

My theory of the decoupling is just general weakness of 2015 results. TSLA compared to the rest of the tech stock had an abysmal year when conditions are so favorable to tech. Low commodity price, high inflation, increase in employment and wage. Until it proves it is a tech stock, it will not move in lockstep with them.

Just glancing over a 1-year Yahoo Finance comparison chart of TSLA vs OIL it looks like TSLA tracked OIL with very high correlation up until mid May 2015 before starting to diverge although still trending with OIL. From the mid Q4 2015, actually literally from "my November 13th 2015 inflection", a negative correlation appears to have emerged with OIL breaking to the downside and TSLA breaking to the upside in unison.

There had to be an eventual decoupling of TSLA and OIL as the demand correlation FUD continued to get debunked by consecutive Tesla quarterly delivery records. It is a bit too early to be certain but maybe this decoupling has now finally occurred. It would make sense considering it was becoming clear that Tesla would make Q4 delivery guidance around the same inflection point and at a time when the bearish consensus seemed to be certain of a solid unit delivery miss.

On a side note, I think the Max Pain thesis has merit. The market seems to do an outstanding job of punishing the majority of purchasers of options. Over the holidays there was a lot of media talk about disproportionate interest in short-term Call Options which caught my attention and considerably lowered by surprise level regards recent short term downward volatility. Personally I think this stock makes sense in 3-6 month chunks excepting specific events where it is obvious that a prevailing short thesis is going to get decisively breached.

 

[dmunjal]

Non farm payroll for dec and nov revision were much better than expected .
So much for recession and the nattering nabobs of negativism

Don't get too excited. Market is down now after the big jump. I'm expecting another 10% downturn.

 

[Drax7]

The Atlanta Fed recently updated the estimate of the 2015 Q4 GDP growth, revised upwards to 1.0%:

The upward revision was largely due to stronger than expected exports; the Atlanta Fed's model had predicted a bigger hit from the strong dollar than has actually occurred.

That said, the stock market is usually a leading indicator, so it could still be the case that the majority of investors see the U.S. slipping into recession this year. IMO, if a recession occurs, it will be because the U.S. economy is dragged down by larger recessions elsewhere in the world and, therefore, that U.S. stocks will be stronger buys than others (on average).

The Atlanta fed seems to adjust its gdp number after every economic release, and the non farm payroll and prior revisions
released today have not been included, they would imply upward adjustments to 4th qtr gdp. Whatever.

The stock market has forecasted the last nine of the last 5 recessions , is a quote from Paul Samuelson .

 

[FluxCap]

Don't get too excited. Market is down now after the big jump. I'm expecting another 10% downturn.

Why?

 

[gene]

Apple Registers 'Apple.car' and Other Auto-Related Domains - Mac Rumors

Friday January 8, 2016 7:53 am PST by Joe Rossignol
Apple has registered a trio of auto-related top-level domain names, including apple.car, apple.cars and apple.auto. Whois records updated on January 8 show that Apple registered the domains through sponsoring registrar MarkMonitor Inc. in December 2015, although they are not yet active.

 

[dmunjal]

Why?

Markets don't turn around without a capitulation bottom. The fact that this great jobs report didn't cause a 200+ point bump after four down days is a problem for me.

I'm not gloom and doom but I look at the charts and the sentiment. China is not out of the woods and the Fed is committed to raise rates (even more after this morning's job report) a few more times this year.

Usually, the Fed raises rates into a growing economy. But this time, GDP growth is actually declining which means it actually is not a good time to be raising rates.

To me, the Fed is everything. Their rate strategy defines the market sentiment.

This should really be in the macro thread.

Micro is another matter. Each stock trades on its one fundamentals and TSLA has good ones coming up. But the market can drag good names down, too.

 

[CALGARYARSENAL]

Markets don't turn around without a capitulation bottom. The fact that this great jobs report didn't cause a 200+ point bump after four down days is a problem for me.

I'm not gloom and doom but I look at the charts and the sentiment. China is not out of the woods and the Fed is committed to raise rates (even more after this morning's job report) a few more times this year.

Usually, the Fed raises rates into a growing economy. But this time, GDP growth is actually declining which means it actually is not a good time to be raising rates.

To me, the Fed is everything. Their rate strategy defines the market sentiment.

This should really be in the macro thread.

Micro is another matter. Each stock trades on its one fundamentals and TSLA has good ones coming up. But the market can drag good names down, too.

You, my friend, are spot on.

 

[gene]

ok, ok Off Topic. But! The FTC is having hearings about USA Auto Dealer models. Nice article here, but most importantly, there is a link to the FTC where you may make comments of your stance on automobile direct sales. Maybe share your experience if you are a Tesla owner: Tesla To Testify At FTC Hearing On Auto-Dealer Franchise Laws

 

[FredTMC]

Oil back up and naz up and tesla sagging. Sheesh

 

[Renaud]

Hi, and since it's my first post of the new year, best wishes to all of you!

So Dec 31st, SP 240, just over a week after 10% down, not that the day is over, but I don't think we'll see green again. But I've been wrong so many times.
I really thought that the 220 we broke this morning was going to be some kind of support, but it was more a psychological thing for me than an actual support.
The 50 dMA being at 224 and max pain at 225 this morning I believed coming back in that sort of channel between the 50 and 200 dMA was achievable. Low volume, everything else greenish, it would have been a good end of the week...

 

[ludicrousspeed]

Apple Registers 'Apple.car' and Other Auto-Related Domains - Mac Rumors

I think this is the reason for the price action today. Wonder how many times the Apple Car rumor will surprise the market. Just a few months ago TSLA fell like $8 in 5 minutes because of a similar report. Please sell your tesla stock if you are concerned over the Apple Car because it's most likely going to happen.

 

[Causalien]

Just glancing over a 1-year Yahoo Finance comparison chart of TSLA vs OIL it looks like TSLA tracked OIL with very high correlation up until mid May 2015 before starting to diverge although still trending with OIL. From the mid Q4 2015, actually literally from "my November 13th 2015 inflection", a negative correlation appears to have emerged with OIL breaking to the downside and TSLA breaking to the upside in unison.

There had to be an eventual decoupling of TSLA and OIL as the demand correlation FUD continued to get debunked by consecutive Tesla quarterly delivery records. It is a bit too early to be certain but maybe this decoupling has now finally occurred. It would make sense considering it was becoming clear that Tesla would make Q4 delivery guidance around the same inflection point and at a time when the bearish consensus seemed to be certain of a solid unit delivery miss.

On a side note, I think the Max Pain thesis has merit. The market seems to do an outstanding job of punishing the majority of purchasers of options. Over the holidays there was a lot of media talk about disproportionate interest in short-term Call Options which caught my attention and considerably lowered by surprise level regards recent short term downward volatility. Personally I think this stock makes sense in 3-6 month chunks excepting specific events where it is obvious that a prevailing short thesis is going to get decisively breached.

The only good correlation (inverse) I have found is Bitcoin. TELA seem to have inverse correlation with each other on big fundamental moves with a phase difference of about 1~2 months. This drop for me is completely saved by a similar rise in bitcoin.

 

[gene]

I think this is the reason for the price action today. Wonder how many times the Apple Car rumor will surprise the market. Just a few months ago TSLA fell like $8 in 5 minutes because of a similar report. Please sell your tesla stock if you are concerned over the Apple Car because it's most likely going to happen.

Long term, a car from Apple will be excellent for Tesla as Apple going into the car business will validate EV's in general. "All boats rise".

 

[ZenMan]

I am beginning to get deja vu again.

This effect I call the January effect was 't as strong as before, but is now getting stronger every year as more retail dumb money gets into options. It coincides well with the timing of a big push by retail brokerage in introducing options to retail clients.

All if a sudden, options are not just for sophiscated investors that has to jump through hoops in order to get an account. Since we retails cannot get 5 year LEPS, we are relegated to crappy 1 ~ 2 year options on January. This is why the open interest on these are always so large. I believe that going forward, on every January, we'll be seeing a price reversion to one year ago level on most stocks in order to milk the most amount of money out of retail investors. My suggestion is to get rid of your LEPS by July and at the latest September.

With this and my recent checks, I believe the pain will trough on the 18th and go back to its rise in February.

I wouldn't the Maximum Pain calculation take this into effect? The January 15th Maximum Pain is at $230. Do you see it differently?

 

[FredTMC]

More news today from Gene Munster saying apple should buy Tesla for ~$40B. I don't care either way, but I want this talk as a catalyst to lift the stock price.

 

[ludicrousspeed]

Long term, a car from Apple will be excellent for Tesla as Apple going into the car business will validate EV's in general. "All boats rise".

Agreed. In my opinion, Apple (and Google) will never sell cars directly to consumers, but rather approach the ride sharing business. Uber is currently valued around $60B and their drivers make 80% of the fees. Producing self-driving cars and having them bring in years of revenue with no further costs is a ridiculously profitable business model.

 

[aznt1217]

More news today from Gene Munster saying apple should buy Tesla for ~$40B. I don't care either way, but I want this talk as a catalyst to lift the stock price.

Call it $50B and I'll be comfortable.

 

[Drax7]

Call it $50B and I'll be comfortable.

On a lighter tone, I suggest we all buy tickets in the $800 million lottery
coming up.

 

[Causalien]

I wouldn't the Maximum Pain calculation take this into effect? The January 15th Maximum Pain is at $230. Do you see it differently?

From my understanding of the max pain calculation, It just uses the amount of contracts at the end if the day and see ehat price induces the maximun amount of expiration in $$$ terms.

What it doesn't see is when these contracts were created and how much premium decay has already happened. It also doesn't take into account on which side the market makers are on. I've always wanted to write a detailed algorithm to track this, but never had the incentive to do since my strategies are not based on max pain. If I have to coin a term for this enhanced tracking. It'll be called Maximum Retail Pain or Maximum Market Maker Money Making (MmMmM)