To the long time Investors here who have more experience than I do. How do you determine you have seen Capitulation? When everyone who had to sell was forced to sell because of margin calls? When will wallstreet hedge funds think they have to lowest buying point and have grabbed all the shares from the retails at the lowest buying price?
Is there another way to determine capitulation on the chart than 2 massive down red days with everyone on Twitter saying they have sold because TSLA is going back to 400s?
I see a massive buying opportunity here if I had spare change, hedge fund managers must see the same thing I do?
How do they determinate we have reached capitulation day and tomorrow is massive buying day?
There have been a few responses to your questions, some quite reasonable. Overall the tendency of investors is to overreact to either good or bad news, and react to rumors too.
There is no way to know if Captilualtion has or has not happened, or if such a concept really exists in market movements. It is absolutely true that large movements happen that have perfectly sound justifications. All of them are the subject of serious quantitative analysis by highly qualified technicians, some with Nobel Prizes. Every single such tool is stochastic, and uses the past to try to predict the future. That works when the future follows the past neatly and smoothly. It sometimes does that. Hence the best neural networks still use observations as the basis for prognostication.
Hence, nobody can know, but some guess better than do others. Gordon Johnson, for example had a stellar track record. Then he misdiagnosed Tesla.
In the current situation emotions are exacerbated by current events. Those events were perfectly predictable back in 2013. They still are.
Many people including one or two giant TSLA investors, assumed TSLA would go up and up because of intrinsic value. They then figured lots of margin and derivatives would accelerate their riches, which would happen if they were correct. "Nothing goes "up and up" smoothly. NOTHING! Hence when that perfectly predictable political upheaval happened to appear (BTW, this has been FUD, SEC, NHTSA, FSD and many other acronyms, plus, the odd long-planned invasion.
All of that portended high volatility for TSLA. Elon even warned that if investors were afraid of volatility they should not buy TSLA.
So, when Capitulation? Nobody knows.
Several of us repeatedly warn that dealing in market timing and derivatives is doomed unless you're a market maker. Other insist that they know the 'secret sauce'. That is false and will remain so. Human behavior is not yet susceptible to accurate and precise prediction. Precise? Sure, that is the norm. Accurate? Never yet. Even Hari Seldon Psychohistory could not imagine precise and accurate, and that had Isaac Asimov to imagine it.
So, run fast from anybody who suggests they know when Capitulation happens. Ten years from now we'll know what happened now if we're still around to understand what actually happened.
In the meantime I, as usual HODL. Taking the longer view all is well with TSLA. Not so with many others.
FWIW, when a major event happened my rule is to stop watching the markets. I have no idea where they are now and I will not look. I will keep track of the actual events. Those whether about TSLA or the world, are serious enough. I will not trade at all during hysteria. Were I a market maker I'd be quite gleeful from an economic perspectives; Margin calls are profitable things! So are active
traders (oops) marks.
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