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Tesla Investor's General Macroeconomic / Market Discussion

FluxCap

Active Member
Oct 3, 2013
2,524
1,908
DC
Hi folks,

Per earlier request, I'm creating this thread for general discussion of macroeconomic forces affecting the entire market or large segments of the market, from the perspective of and for the benefit of Tesla Motors investors.

I'll start with a few links I find useful (others, please feel free to suggest links you find useful for macroeconomic analysis):

First, here is an Economic Calendar for the markets that is worth paying attention to, as it displays important current and upcoming market indicators & reports and times of release.

Second, here is a decently-written market update link I check periodically from Yahoo via Briefing.com that provides updates pre-market, during the day, and post-market close.

Third, I wanted to share some market contra-indicators I track to gauge fear and/or flight to perceived safety on down days, including gold, treasuries, and expected market volatility. The tickers I often use for that are GLD, TIPS and VIX/VXX, the latter of which is often called the "fear index."

Looking forward to some good discussion.

Thanks,
Flux
 
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I thought this was an interesting writeup:

This Extraordinarily Ferocious Selling - Yahoo Finance

However, I am in the camp that large macro trends nine times out of ten cannot be predicted by nine out of ten people, so I'm largely agnostic with regards to the macro developments. If anyone wants to know, I sold myself down to 50% of my initial Tesla position (from about 80%) when we crossed 250. I put 15% of the proceeds back into Jan 15 270 calls (bought at $212 approx. two weeks ago) and leave the rest in my savings account in preparation for a potential period of voluntary unemployment after I finish my Masters degree in a few months. I am thinking double benefit: The possibility of taking some time off work and also the ability to buy back in in case there is a big market event in the meantime.

My overall view is neutral to slightly pessimistic, but I don't think this is an indicator of anything other than the recent decline.
 

FluxCap

Active Member
Oct 3, 2013
2,524
1,908
DC
Marketwatch has expanded on this idea throughout the day
U.S. stocks extend losses ahead of quarterly reports - Market Snapshot - MarketWatch
They postulate that with Q1 forecasts generally downbeat there is a sell off now before things get worse when the actual data arrives. Even if Tesla did well in Q1 they could get lost in the weeds.

It's an interesting thesis, and thanks for sharing. Personally, I don't really see too many signs of investors selling because of expectations of coincidentally bad earnings reports for every single company in the index. I think today's weakness comes from economic data and expectations of economic movements. Right now the market is heavily paying attention to Russia/Ukraine with some uncertainty/fear and volatility making traders wonder if they should take cash out of the market. Additional fear of weak employment in US, fear of Chinese economy cooling slightly, and fear of the Fed tapering QE too soon for the market's taste. I'm pretty sure if Putin's Russian marine hadn't murdered a Ukrainian officer this weekend, we wouldn't be seeing so much red in the market today.

Incidentally, the ticker VXX is a very interesting contra-indicator of market sentiment. It tracks short-term expected market volatility and is often called the "fear index." I watch that, TIPS and GLD for quick indications of negative market sentiment / flight to safety. Can be a useful barometer for trading decisions, and even a decent hedge for the bold.

The "Fear Index" did simmer down towards the close today which is a good sign, so hopefully the market will resume a more normal trading pattern in the days to come this week.
 

FluxCap

Active Member
Oct 3, 2013
2,524
1,908
DC
This morning, I am growing increasingly concerned about Putin's actions in Ukraine as is our Secretary of State:

John Kerry said:
US Secretary of State John Kerry squarely blamed Russian agents on Tuesday for separatist unrest in eastern Ukraine, saying Moscow could be trying to lay the groundwork for military action like in Crimea.



"It is clear that Russian special forces and agents have been the catalyst behind the chaos of the last 24 hours," Kerry told US lawmakers, adding this "could potentially be a contrived pretext for military intervention just as we saw in Crimea."

Kerry said the US and European allies were united and willing to impose tough new penalties on Russian energy, banking and mining if Moscow fails to honor a sovereign Ukraine.



He said he will meet with Russian Foreign Minister Sergei Lavrov next week in Europe. [Reuters]

There is a lot of chatter about a general market de-risking among traders I follow, but that noise could just be salivating shorts.

The challenge now, I think is to start to strategize about what an all-out invasion by Putin of Ukraine would do to the markets, the global economy, the US economy, and Tesla Motors specifically. I am thinking of this in stages, as in immediate effects lasting several weeks/months, medium-term effects lasting several months to a year, and long-term effects years in the future.

Short-term, I see a catalyst for a catastrophic risk-off and market crash.
Medium-term, I see a moderate recovery as markets figure out whether war is imminent or diplomacy can help.
Long-term, regardless of whether there is larger-scale military conflict, I see a realization that petroleum and fossil fuels in general create liabilities and national security risks for all Western nations, and a MASSIVE move into renewable solars, batteries, and electric motors replacing combustion engines all over the place.

I have not translated any of this into valuations other than to personally exit my riskiest short-term trades for the time being. I hold TSLA LEAPS and an abundance of stock.

Anyone have thoughts?
 

FluxCap

Active Member
Oct 3, 2013
2,524
1,908
DC
Looks like the market likes the minutes. Anyone got an interpretation or why they do?

From Briefing.com link I posted in first post:

"Most notably, the minutes revealed that several FOMC members believed that forecasts presented by the FOMC have overstated the expected pace for an increase in Treasury rates. This suggested that the expectation for an increase in rates during the first half of 2015 may not be on solid footing.

Accordingly, Treasuries regained all of their losses, sending the benchmark 10-yr yield to 2.69% after hovering just below 2.72% ahead of the release. Also of note, gold futures spiked from their afternoon lows back to their flat line ($1309.50/ozt)."

This is going to move NASDAQ stocks significantly higher, I believe. 220+ TSLA close today is my bet.
 

FluxCap

Active Member
Oct 3, 2013
2,524
1,908
DC
Well I took some QQQ straddles and sold the puts the moment the stock started to move. Now nicely in the green and if indeed the guideline now is low interest rates continuing, then I'm holding on to those calls :) TSLA going up too is nice and might help us get back above the down channel.

Now would be a perfect time for Elon to stick a fork in the shorts with a numbers release to ride this wave up. Not saying he will, just saying I'd like it. :)

Edit -- there are some odd yarns being spun in the press now. It's like a competition to see who can write the more meaningless article. I mean here are two news outlets with polar opposite headlines about the same minutes release. So who is right, the Washington Post or Reuters? /facepalm

gnewsfedwhat.png
 
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FluxCap

Active Member
Oct 3, 2013
2,524
1,908
DC
@fluxcap, any thoughts on this article re: the unrest being resolved (one way or another) within 48 hours? the markets seem to be less concerned about ukraine the last two days...

I tend to oscillate daily between panic that WWIII is imminent and thinking Putin will pull back to Russia. I just honestly don't know right now.

I like this live news feed to stay updated, if you're interested.
 
I tend to oscillate daily between panic that WWIII is imminent and thinking Putin will pull back to Russia. I just honestly don't know right now.

I like this live news feed to stay updated, if you're interested.
hard to decide what to do with TSLA (to some degree) and solar stocks (to a large degree) both feeling like they are poised for a recovery barring any negative news from the ukraine. thanks for the link; i'm going to be watching closely.

surfside
 

The Blue Owl

Endangerous Herbivore
Feb 27, 2014
1,555
5,146
Toronto, ON
I tend to oscillate daily between panic that WWIII is imminent and thinking Putin will pull back to Russia. I just honestly don't know right now.

I like this live news feed to stay updated, if you're interested.

The annexation of Crimea went without a hitch. If you are Putin, you want to know to what extent is the West prepared to push back against further expansion.

I hope that NATO reasserts its presence in the Eastern-most members, and also that the U.S. and E.U. convince the Russians that they are ready to inflict serious economic pain if Russia takes another bite. This is a dynamic system that became unstable when the old equilibrium broke. Now it's searching for a new equilibrium, which will only be reached when all forces acting on it balance each other out.
 

FluxCap

Active Member
Oct 3, 2013
2,524
1,908
DC
Well said, Familial. The market is definitely in "searching" mode right now and things like Fed comments, news from China, and of course Ukraine tend to overshadow news about individual companies.

I'm seeing a lot of hedge fund tweets about "de-risking" and "shorting small caps" but so far those tweets have not translated into any profitable trades I'm aware of. Something to watch though.

Today, VXX the "fear index" also retreated quite a bit, which is a good sign at least for now.
 

mershaw2001

I'm short the short sellers
Apr 26, 2013
682
599
Menlo Park
I also fear that Putin may want to push until he hits serious resistance, and that sort of resistance would come from armed fighting. If the VXX is retreating, that means investors aren't bracing for such an impact. Putin will want to strike without warning, and if people aren't wary then it will hit the market all the harder.
 

Auzie

Tree Hugger Member
Jul 29, 2013
1,898
45
Sydney
My expectation is that Putin will be happy with his gains so far and will not push as far as to invite active resistance from others than the Ukraine. So far he got internal support for his move, resistance comes from Ukraine only and some diplomatic protestations from the rest of the world. Ukraine might be in turmoil for a longer period of time due to many pockets of rusian majority population and their uprising. Such conflict may stay isolated and localised and it may simmer for many years to come. Or it might spill outside. My expectation is that it stays confined to Ukraine.
 

FluxCap

Active Member
Oct 3, 2013
2,524
1,908
DC
The fear index, gold, and inflation protected treasuries are all up a bit this morning as the NASDAQ dips. We will see if this nervousness holds throughout the day.

Some of this movement is reaction to this:

US troops may be sent to Eastern Europe



NATO's top military commander in Europe has said American troops could be deployed to alliance member states in Eastern Europe.


US Air Force Gen. Philip Breedlove told The Associated Press he wouldn't "write off involvement by any nation, to include the United States."


Foreign ministers of the 28-nation alliance have given Breedlove until Tuesday to propose steps to reassure NATO members nearest Russia that other alliance countries have their back.


"Essentially what we are looking at is a package of land, air and maritime measures that would build assurance for our easternmost allies."


Breedlove told the AP. "I'm tasked to deliver this by next week. I fully intend to deliver it early."


Asked again if American soldiers might be sent to NATO's front-line states closest to Russia, the four-star U.S. general said, "I would not write off contributions from any nation."
[Associated Press]
 

FluxCap

Active Member
Oct 3, 2013
2,524
1,908
DC
Today was a bloodbath, pure and simple. Total panic selling across the entire market. I believe that the market-makers created a story about a correction that became a self-fulfilling prophecy.

Basically, my current hypothesis is that institutions and big fund managers talked to each other and decided they needed to short the market and make money on a fabricated "correction" story with no fundamental economic basis. They tested this by shoving the market down and selling on every peak over the last few weeks, then pounced full force today. They will buy everything back up at bargain basement prices when they decide to stop the bleeding. Question is when.

There was no Lehman brothers collapse today.
There was no dot-com bust.
There was no war.
There was no housing bubble bursting.

There were simply some "momo" stocks that got de-hyped.

So my theory is, self-fulfilling prophecy by the small group of men that control the vast majority of the planet's wealth.

We will see if this continues tomorrow or not, but there is now no question about the sentiment.

Incidentally, I do believe that this is a "stock pickers market" for buy and hold investment over a multi-year time horizon, but that doesn't ease much of the short-term pain. Honestly, I'm positive there are some overvalued companies out there, particularly in biotech, but TSLA is simply not one of them. Not selling my core shares for years.
 
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