Papafox's Daily TSLA Trading Charts

[Papafox]

TSLA chart above

QQQ chart above

I hope no one was surprised by Tuesday mandatory morning dip. It's the logical play on a Tuesday when the stock price went bonkers on Monday. Scare away the traders with the dip, and then with the lower volume (only about half of Monday's) tweak TSLA so that it closes right around your desired level. I don't buy the media's claim that Elon's firing in the supercharger group was the reason for the dip. Tesla is still going to build superchargers. The dip was coming whether or not that story even came out, and I strongly suspect Elon had a good reason for doing so. The media always goes through the list of news stories and says, "Ah ha, that has to be the one."

Why did TSLA close around 183 instead of below the 180 call wall? Glad you asked. It's early in the week yet, and the options are going to shift around with the stock price and expectations. What we know is that puts generally grow on the low side of the stock price and calls on the high side. If you want puts to grow at 180, why would you push TSLA below 180 this early in the week? Investor hunger for TSLA shares could rekindle as the week goes on, and a better strategy might be to let puts grow at 180 and only move TSLA below 180 if the market really wants to take it down or if it's Friday.

We saw an oversized dip of TSLA compared to the macros in late pre-market and early market trading. This is likely where the market makers used most of the 62% of selling short shares they generated. TSLA got down below 185 and into the 185 to 180 sweet spot by about 11am. Unfortunately for the market makers, the macros then swooned and they had likely overdone the shorting earlier in the day. No problem, they just started covering some of those short positions in the afternoon, which allowed TSLA to barely dip in the afternoon even though QQQ was losing ground. At day's end, TSLA saw 62% of selling tagged to shorts with 7.7M shares trading hands in the 4pm closing cross. TSLA lost 5.55% to Nasdaq's 2.04%.

Percent of selling tagged to shorts came in at a really high 62%, suggesting that options sellers were shorting the "sugar" out of TSLA at certain times on Tuesday

Yields on 10 yr. treasury bonds climbed to 4.67% on Tuesday

Max pain Tuesday morning ran all the way up to 180. It didn't make a difference, because the target of the market makers this week is to diminish the disparity between calls and puts at 180 (by keeping the stock price somewhat above 180) and then pushing the stock price below 180 on Friday if calls continue to outnumber puts by too much.

Tuesday's TSLA options volumes

TSLA is back below the upper bollinger band after one day outside.

Conditions:
* Dow down 570 (1.49%)
* NASDAQ down 325 (2.04%)
* SPY down 8 (1.58%)
* TSLA 183.28, down 10.77 (5.55%)
* TSLA volume 125.7M shares
* Oil 81.16
* IV 47.4, 49%
* Max Pain 180
* Percent of TSLA selling tagged to shorts: 62%
* Volume at 4pm closing cross: 7.7M shares

 

[Papafox]

TSLA chart above

QQQ chart above

While the main TMC investor forum was busy postulating and pontificating about the recent supercharger staff layoffs, I thought I'd cover everything else here. The pressure by the option sellers to keep TSLA from running higher this week is still evident, with 61% of TSLA selling tagged to shorts on Wednesday and a closing cross volume of 5.7M shares. We saw pressure in the pre-market with TSLA trading as low as 179, but the stock price rose and even managed to kiss the green around 10am. Alas, that didn't sit too well with you know who and TSLA flirted by touching 180, rising, then revisiting 180 multiple times.

Come 2:30pm, the FOMC meeting minutes were published and the market went green in celebration of Powell's words that the next rate move by the FOMC would NOT be an increase. Alas, Powell's assistants must have pointed out to him that his words raised the stock indexes, whereupon he set about ginning up enough gloom and doom to set the markets in a quick descent into close. Yep, things are normal in the Fed Meetings world.

The good news is that both QQQ and TSLA showed up uptrend as after-hours trading continued, and often that uptrend bodes well for the next day's opening trading. The market makers have Tesla priced exactly where they want it at the moment and so it'll be interesting to see what responses happen to the stock through week's end.

I wouldn't overthink the past couple day's of sinking TSLA price. The market is down about 2.5% this week, there's noticeable option seller downward manipulations on TSLA this week, and the combination of the other two downward forces has increase the amount of profit-taking after TSLA's strong climb out of the 140s.

Today's best laugh
* Reuters says Exclusive: Tesla retreats from next-generation ‘gigacasting’ manufacturing process. Hint: I guess they forgot about this little thing called Gen 3 vehicles, which would be initially built in 3 pieces and then mated together.

Yields on 10 year treasury bonds closed near 4.63% on Wednesday

Max pain Wednesday morning was again 180. Puts and Calls at the 180-strike didn't change much since Tuesday morning, and so that market makers will likely want to engineer a close at least a penny below 180 kind of like, ah... like what happened on Wednesday.

Wednesday's TSLA options volumes

The Nasdaq is down about 2.5% this week and TSLA is giving an exaggerated dip after Monday's big gain. Notice how low the volume is on these weak decline days.

Conditions:
* Dow up 87 (0.23%)
* NASDAQ down 52 (0.33%)
* SPY down 2 (0.32%)
* TSLA 179.99, down 3.29 (1.80%)
* TSLA volume 91.8M shares
* Oil 79.27
* IV 45.7, 39%
* Max Pain 180
* Percent of TSLA selling tagged to shorts: 61%
* Volume at 4pm closing cross: 5.7M shares

 

[Papafox]

TSLA chart above

QQQ chart above
Time for a quiz: Which explanation best describes TSLA's trading on Thursday?
1) TSLA has moved into a very narrow trading range of 179.99 to 180.01. We made it to the top of the trading range today and should be happy.
2) Option sellers shorted the "sugar" out of TSLA on Thursday, as they have every day this week. They continue to aim for a close near 180 on Friday.

Of course I believe #2 is the correct situation. Notice that Nasdaq ran 1.51% higher while TSLA remained essential level. These are perfect days for understanding why TSLA trades relatively level for years (+/- 100%, etc) before making a monster move. The option sellers are just making too much money from selling options to allow TSLA to float freely with the market. Suddenly it becomes evident that TSLA is seriously underpriced and then Boom! it's off to the races again as we saw in 2013 and 2020. Methinks the maturing of FSD will be the catalyst for the next big jump, with Optimus trailing not all that far behind.

As for Thursday's trading, TSLA mostly moves in the direction of the Nasdaq or QQQ, but it's magnitude of movement is decreased when it is heading away from 180 and increased when the movement is toward 180.

News:
* If you haven't seen it yet, check out the video of the China Model Y going airborne for 7 rolls before landing. All four occupants survived, with one suffering serious injuries. When convincing friends to buy a Tesla, don't forget to mention it's the safest vehicle they can buy.

* This Tweet by AJ shows that Tesla fared better than almost all other EV makers and many Ice makers during Q1 (compared to Q4) for worldwide sales.

* This Tweet says that Tesla could realize up to $150M now that South Korea has granted Tesla the right to trade carbon credits in the country.

* Please check your emails for notification of right to vote as Tesla shareholders for the Elon compensation question and other important topics. I was notified on Thursday by Schwab, Fidelity, and E-trade. I plan to vote Yes on Elon's compensation. The man earned the compensation and we should give it to him.

Percent of selling tagged to shorts on Thursday was 61%, continuing the high level seen all week

Yields on 10 yr treasury bonds ended the day around 4.63%

Max pain on Thursday continued to be glued to 180. We saw very little change in 180-strike puts and calls, with them remaining about 18K and 45K respectively.

Thursday's TSLA options volumes

TSLA closed 2 pennies higher on Thursday as volume continued to sag. It's as if the traders and investors know what's going on the second half of this week and everyone is snoozing.

Conditions:
* Dow up 322 (0.85%)
* NASDAQ up 235 (1.51%)
* SPY up 5 (0.94%)
* TSLA 180.01, up 0.02 (0.01%)
* TSLA volume 88.3M shares
* Oil 79.15
* IV 44.8, 31%
* Max Pain 180
* Percent of TSLA selling tagged to shorts: 61%
* Volume at 4pm closing cross: 4.2M shares

 

[Papafox]

TSLA chart above

QQQ chart above

Not surprisingly, TSLA was trading in the red early pre-market on Friday as the option sellers sought to pull TSLA's close below 180. Alas, a 8:30am the jobs report came out and it was weak according to CNBC, suggesting that the oversupply of jobs is diminishing. That situation bodes well for sooner rate cuts by the feds and the markets rallied. TSLA should have been a top performer on Friday with this news since interest rates are extremely important to vehicle buyers. TSLA rallied to 184 by 10am, but then the market makers turned on the sledge-o-matic to coincide with a slight macro dip and TSLA descended to nearly 178. From there on the day was a game of keeping TSLA below 181, and when that wasn't possible keeping it below 182.

If you ever doubted that the option sellers manipulate the "sugar" out of TSLA to maximized their weekly earnings, this week's performance should really have removed all doubt.

TSLA's close at 181.19 left the stock priced over a dollar higher than the market makers wanted on a Friday, and so this close should be regarded as a mild manipulation failure, which is bullish. Check out the selling by shorts chart below and you'll see that shorts were tagged with no less than 60% of TSLA selling every day of this past week, indicating a serious effort needed to keep TSLA near 180. Mondays are typically the day when the market makers and hedge funds allow TSLA to climb a bit to relieve some of that buying pressure, and I wouldn't be surprised to to an upward run on Monday.

TSLA's big break upwards would likely to be connected with optimism of vehicles, energy, FSD, Optimus, and especially combinations of them.

* Vehicles: this Sawyer Merritt Tweet suggests that Model 3 Long Range may be getting its IRA subsidy back, due to a change in U.S. government rules regarding various elements contained within the battery. If the Model 3 LR does indeed get it's discount back, this is huge. Not only is the vehicle better priced for those who qualify, there are fence sitters waiting for the discount to come back before they purchase their Model 3. Fingers crossed

* Storage: It's growing quickly and needs to be appreciated by analysts as an important profit center going forward

* FSD- V12.3.6 is out and so far is well received. I've noticed that the V11 and V12 software have been very similar in planning time before moving into the needed exit lane on the highway. I suggest that the planning function has been carried over from V11 and needs to be upgraded to get improved exit from highway planning and improved choice of lane planning. My guess is that we see that in 12.4 or 12.5. We need it. Can't wait.

* Optimus: This Tweet posted by @TeslaOPtimus shows a Tesla Optimus robot performing battery cell placements. With Optimus continuing to improve and now doing useful work (though slowly), the idea of Optimus in a Tesla factory this year is not far fetched.

Percent of selling tagged to shorts was 61% on Friday as the number never dipped below 60% all week. Translation: There was a ton of option seller manipulations to get TSLA close to 180 for Friday's close.

Yields on 10 yr treasury bonds dipped second half of the week to close near 4.5%

The Truflation.com chart gives us an idea of what to expect on the May 15 CPI inflation numbers. All the government's numbers of the past month measured the March month, which saw a big jump in oil prices. As you can see by the truflation.com chart, That big rise at the end of March dropped off considerably as we exited April, suggesting lower inflation in April. Moreover, oil prices are presently trending downward. Tick, tick, tick.

Max pain Friday morning was 180 yet again. Big call walls rose at 185, 190, 195, and 200. The market makers would have preferred a close before 180 on Friday but they couldn't pull it off with Nasdaq up nearly 2%.

Tesla's options volumes for Friday

When you consider how far up and down both the stock price and max pain run in a week, and that they're generally somewhat different on a daily basis, the ability to nail max pain with the stock price looks all the more improbable without an actual effort underway to do so. Chart courtesy of @JimS

For this coming Friday, max pain is still 180. At 200 is the mega call-wall and 180 is nearly even between puts and calls. Thus, MMs won't be worried if TSLA rises above 180 on Monday. Strikes 185, 190, and 195 are call dominated and we'll see efforts to minimize the intrusions. As always, if the stock runs higher on Monday, there's time in the rest of the week for rejiggering of the options.

The tech chart tells the story of the past week. Monday was the big 15% up day. Every other day was an effort to first sink and then stabilize TSLA near 180. As the game of holding TSLA back got deeper underway, volume continued to drop as traders disappeared and the manipulations continued.

For the week, TSLA closed at 181.19, up 12.90 from the previous Friday's 168.29. It's been a good week, my friends. Hoping you spent the weekend with those who matter to you.

Conditions:
* Dow up 450 (1.18%)
* NASDAQ up 315 (1.99%)
* SPY up 6 (1.24%)
* TSLA 181.19, up 181.19 (0.66%)
* TSLA volume 75.2M shares
* Oil 78.11
* IV 43.8, 21%
* Max Pain 180 for May3 & May10
* Percent of TSLA selling tagged to shorts: 60%
* Volume at 4pm closing cross: 5.4M shares

 

[Papafox]

TSLA chart above

QQQ chart above

As expected, the market makers loosened their choke hold a bit on TSLA on Monday and the stock did indeed run higher. It passed 187 about 10am and then came the all too frequent walkdown of the stock price as a lack of recent news minimized volume (83.9M shares for the day) and that lower than typical volume allowed the market makers to enjoy a big walkdown through about 11:20am.

If you look at the daily trading, the whack-a-mole procedure looked to be employed any time TSLA exceeded 185, which suggests to me that 185 is the target that the option sellers would like to see for this week. There's time for the options to rejigger by Friday and once again reward the option sellers with a nice profit.

Nonetheless, arranging for a slightly sub-185 close required significant effort. Percent of selling tagged to shorts came in at 60% again, with a hefty 5M shares trading during the 4pm closing cross. All this means that there's still upward pressure on the stock price and the option sellers continue to work hard to moderate the gains each week in order to maximize their option selling profits.

On Friday, CNBC tried their best to pull a Reuters and affect Monday's stock price by poo-pooing Tesla's FSD efforts. The production (more than a news report) attempted to paint Waymo and Mercedes as the industry leaders on FSD as Tesla as a wanna-be. In this Solving the Money Problem video, Stephen Mark Ryan had a field day dissecting the hit piece. Judging by the strength of TSLA during Monday's open, I'd say the CNBC effort failed miserably.

Will the option sellers keep TSLA's gains down to $5 this week when the stock rose more than $12 last week? No guarantees one way or the other.

Yields on 10 yr treasury bonds closed around 4.47% on Monday

Max pain Monday morning was 180. The best the option sellers could do on Monday was to protect 185 calls and above as TSLA closed at 184.76

Monday's TSLA option volumes

Monday's gains allowed TSLA to shake off the level-off last week and post some gains for the new week.

Conditions:
* Dow p 177 (0.46%)
* NASDAQ up 193 (1.19%)
* SPY up 5 (1.03%)
* TSLA 184.76, up 3.57 (1.97%)
* TSLA volume 83.9M shares
* Oil 78.56
* IV 43.5, 18%
* Max Pain 180
* Percent of TSLA selling tagged to shorts: 60%
* Volume at 4pm closing cross: 5.0M shares

 

[Papafox]

TSLA chart above

QQQ chart above

TSLA got off to a red start on Tuesday as China deliveries in April came in lower than the 1st month in Q2 of 2023. Check out the Roland Pircher post below.

With the present mess in China (too many EV companies chasing too few buyers until a bunch of the companies go out of business), a bit lower delivery number isn't so unexpected. To add context, though, consider this Tweet from TSLA Chan, which says Tesla delivered 10,400 Model Ys and 600 Model 3s. Why so few 3s? They were being loaded onto ships for foreign destinations (Berlin doesn't make Model 3). Thus, the April China delivery numbers don't really tell a useful story unless you consider what happened to the Model 3s in April.

With high percent of TSLA selling tagged to shorts (62%) and high volume at the 4pm closing cross (5M shares), rest assured that someone was working like crazy to get the maximum dip possible out of this news. Keep in mind, too, that Tuesday of last week was a deep dip day as well.

News:
* Sawyer Merritt Tweeted that GigaBerlin will experience a one day break from work. I'm told there's a protest planned during this time period. With a holiday on Thursday and both Saturday and Sunday off for the weekend, closing on Friday wasn't a particularly negative decision.
* Someone Tweeted that Tesla would build 1,000 Optimus robots in 2024, 10,000 in 2025, 100,000 in 2026, ..., ..., ..., ..., and 1,000,000,000 in 2030. Elon replied with "Not quite that fast, but not far wrong."

Percent of TSLA selling tagged to shorts ran all the way up to 62%, indicating a serious effort to manipulate the stock price downward.

Yields on 10 yr treasury bonds closed Tuesday near 4.47%

Max pain has been glued to 180 for some time now. That strike is now dominated by puts but 185 is a tall call wall that the market makers would like to protect.

Tuesday's TSLA options volumes

With only 74.5M shares volume and 62% of TSLA selling tagged to shorts on Tuesday, someone really wanted the stock to go lower in ways that the max pain chart can't predict. Perhaps this was an effort at leveraging the somewhat low China deliveries in April.

Conditions:
* Dow up 32 (0.08%)
* NASDAQ down 17 (0.10%)
* SPY up 1 (0.11%)
* TSLA 177.81, down 6.95 (3.76%)
* TSLA volume 74.5M shares
* Oil 78.04
* IV 41.7, 6%
* Max Pain 180
* Percent of TSLA selling tagged to shorts: 62%
* Volume at 4pm closing cross: 5.0M

 

[Papafox]

TSLA chart above

QQQ chart above

TSLA got a kick in the ribs early Wednesday when Reuters put out this stinker of a FUD post claiming that Tesla is under investigation for securities and/or wire fraud for misleading its investors about the abilities of its full self driving product. For this steaming pile of FUD, Elon called Reuters the "worst of the worst." The market saw through the sham and TSLA recovered most of its market open losses by 11am. Then again, QQQ made a dip similar to TSLA's Wednesday morning (but far smaller) and much of the recovery in morning trading likely was attributable to macro recovery. Still, we see quite the FUD and short-selling attack on TSLA this week. Percent of selling tagged to shorts came in at a high 60% once again, and trading during the 4pm closing cross amounted to nearly 6.8M shares. Someone is working this stock, and hard.

To put Wednesday's trading into perspective, the enthusiasm for FSD v12.3 has really gotten the TSLA naysayers in a frenzy. The media failed to cover the enormous increase in retail investor sentiment that pushed TSLA up from it's doldrums in the 140s. CNBC issued a hit peace on Tesla autopilot on Friday afternoon, and now Reuters is keeping the pressure on as shorting activity stays high. It's ironic that as Tesla finally delivers on the FSD promise made years ago, the shorts are jumping on the "FSD-is-a-fraud" bandwagon. I suppose it's their last chance, but it seems too late for slowing the progress now.

With max pain at 180 and no tall call walls below that strike, the pushdown should not logically be generated by option sellers (market makers and hedge funds). Instead, I think we may be seeing big shorts starting to get hot under the collar and looking to engineer a better price for their exit.

Complicating the situation for big shorts of TSLA is word on Wednesday from Elon that FSD v12.4 should be released next week. FSD 12.4 could possibly be a nice positive catalyst to the stock price and I suspect some knowledgeable shorts would like to be out of the stock by then.

As for my personal trading, I use the volatility to do free rolls of call options in my IRA (no tax consequences). My 50 strike calls that expire in Dec25 are now about half rolled to June26 expiration dates. Buying Friday before close and selling on this Monday morning high was a successful call roll and profitable as well. I'm sticking my neck out and bought some more June26s Wednesday afternoon. I'll sell an equal number of Dec25 50s when the stock price allows for a no cost or profitable roll. Two catalysts I'm looking at are retail enthusiasm for FSD v12.4 next week or the week after and a May14 CPI number that surprises to the cool side. I'm looking at truflation.com April performance and crude oil prices. The biggest negative on the horizon right now is that Q2 vehicle production and sales are somewhat low. That's a number worth watching as the quarter progresses.

Why aren't we seeing much volume when news (or FUD) is negative? I think a greater and greater percentage of the stock is being bought by investors who are betting on FSD and Optimus. Let the vehicle numbers do as they will as long as these two projects remain heavily funded and heading for success. We'll see next time there's a negative catalyst just how stoic these new investors truly are.

News:
* According to Sawyer Merritt, Energy Digital has named Tesla the world's number one energy storage company.

Percent of selling tagged to shorts was 60% on Wednesday, making this the longest streak of 60% and above shorting in a long, long time

Yields on 10 year treasury bonds ended the day around 4.5%

Max pain continued to be glued to 180 on Wednesday morning. That strike is now nearly even between puts and calls and is effectively neutral. The 165 and 170 put walls have climbed, which gives market makers an incentive to see the stock finish the week above those numbers.

TSLA's Wednesday options volumes

Despite the best attempts of FUDsters and short-sellers, TSLA still remains above the mid-bollinger band

Conditions:
* Dow up 172 (0.44%)
* NASDAQ down 30 (0.18%)
* SPY up 0 (0.01%)
* TSLA 174.72, down 3.09 (1.74%)
* TSLA volume 79.5M shares
* Oil 79.30
* IV 41.7, 7%
* Max Pain 180
* Percent of TSLA selling tagged to shorts: 60%
* Volume at 4pm closing cross: 6.8M

 

[Papafox]

TSLA chart above

QQQ chart above

The market went into bad news is good news mode Thursday morning when the weekly jobless numbers came is higher than expected. Although more unemployment suggests a slower economy ahead, it also suggests that the Fed has even more reason to start cutting rates sooner than later this year, and so the market decided this was a net positive. You can see the QQQ numbers bounce higher.

Over at TSLA, the 8:30am unemployment numbers were good news and TSLA jumped into the green until market open when the manipulators hit the stock with the sledge-o-matic and kept the pressure on throughout the day. The decline in TSLA from about 1pm to close was typical pushdown by the day-shorting manipulators during the lowest volume hours of the day.

The sky-is-falling story of the day was the resignation of Rich Otto, who has been in charge of planning many Tesla events over the years and he oversaw about 100 employees. He commented that morale is being affected at Tesla because of the layoffs, and I wouldn't be surprised if he's right, but Tesla has done deep cuts before and the company has emerged strong. The loss of this one manager is actually small potatoes when compared to this story from a Brighter with Herbert videocast, which says that British Petroleum has announced a desire to acquire Tesla supercharger sites. There could be hundreds of millions of business for Tesla, depending how the desire for more superchargers shakes out.

Folks, TSLA is in the midst of one hum-dinger of a bear attack, but one that isn't yielding much results for the effort extended so far. On Thursday we saw percent of selling tagged to shorts way up at 64%, about as high a number as you ever see. Trading during the 4pm closing cross was a robust 4.7 million, which is a high number especially when considering that the whole daily volume was a mere 65.5M shares. I like to thing the low (and shrinking) volume is the result of few investors being willing to sell at the moment and a lack of buying as those on the sidelines wait for the bear attack to bottom out before jumping in. Think about it: we've seen CNBC concoct a bogus special report on Tesla FSD (Tesla is number three behind Waymo and Mercedes, don't you know), we've seen truly reprehensible FUD out of Reuters, enough to get Elon to call them the "worst of the worst", and we've seen massive day-shorting efforts that have now stretched into their 9th trading day in a row at 60% or greater.

I emphasize the bear attack because I wish to suggest that often what we see with TSLA trading is disconnected from reality. Ditto with the troll campaign that's been underway in TMC's main investor forum these past couple weeks. It's often unpleasant to sort through the dribble. What I suggest you do at times like this is focus on the reality, which is that Tesla has shown it can outperform any automotive company out there. Now it's taking its know how and agile corporate ways into the AI space with full self driving and Optimus robots. From Tesla's 6 year history with human coded FSD, we learned that neural nets can do the job better and quicker. With driving data and massive compute being the cornerstones of a neural net-based FSD effort, no one is going to beat Tesla to the prize of widespread robotaxi deployment. Q2 of 2024 will look pretty insignificant once Tesla robotaxis are proliferating and earning big returns. Tesla should win the winner-takes-most robotaxi competition in North America and many other locations as well. The humanoid robot competition will have mutliple winners, and that's okay because the total addressable market is far bigger than any other product has ever seen. That's the reality if you extend your horizons. Unless you're changing your investing strategy, I suggest you also find focus in areas of your life outside of the Teslasphere for a while. Life is too precious to allow the FUDsters, trolls, and day-shorters to get you down. Someone you love needs a hug.

Percent of TSLA selling tagged to shorts rose all the way to 64% on Thursday, which is about as high as we ever see that number. A high plateau of above 60% selling tagged to shorts is very uncommon as the shorting activity usually subsides once the mission is accomplished (usually reversing a stock climb). Considering the very low (and falling) volumes on TSLA and the relatively light dips for this heavy of a shorting effort, the manipulators have to be somewhat miffed by the relatively small number of sellers when such pressure is applied to the stock. Remember that a huge portion of the daily volume comes from high-frequency trading (some think around 50%).

You can see a dip on May 9 as the job loss numbers suggest the labor market is cooling off (something that Darth Powell has been waiting to see)

Max pain finally budged off 180 Thursday morning. It's now 177.50. Looking at the open interest chart above, you can see that strikes 175-180 are pretty neutral now. Market makers won't have a strong preference where the stock ends on Friday as long as it's above 170 and below 185.

Thursday's TSLA options volumes

Despite the best efforts of those doing the shorting this week, TSLA remains above the mid-bollinger band

Conditions:
* Dow up 331 (0.85%)
* NASDAQ up 43 (0.27%)
* SPY up 3 (0.58%)
* TSLA 171.97, down 2.75 (1.57%)
* TSLA volume 65.5M shares
* Oil 79.93
* IV 40.4, 2%
* Max Pain 177.50
* Percent of TSLA selling tagged to shorts: 64 %
* Volume at 4pm closing cross: 4.7M shares

 

[Papafox]

TSLA chart above

QQQ chart above

On Friday the markets had a strong day that was not participated in by TSLA. Let's see how this scenario shook out. On open, TSLA was up about 0.7% while QQQ was up about half that amount, around 0.35%. Small retail investors who buy during pre-market trading were bidding TSLA up higher than the market was pricing QQQ's gains for the day. Shortly after open, QQQ jumped much higher but then fell to lose most of that early gain. It would recover some of those losses in the afternoon. TSLA, otoh, was hit with a mild mandatory morning dip right after open, tried to recover, but when QQQ fell TSLA plummet to magnify all of QQQ's descent but had not participated in the initial rise. It was a really apparent manipulation by holding TSLA back during the market's initial rise and then shorting the market's downward movement on TSLA at an exaggerated amount. To people watching the stocks, TSLA looked to be following the market for much of the day but of course the big runs higher were capped so that TSLA didn't participate in that portion.

Just how much shorting took place on Friday? The chart below shows a stratospheric 67% with a big 4.4M shares traded at 4pm despite the meager volume of 72.6M shares.

Who was doing this shorting when the max pain was at 75%? As it turns out, the market makers and hedge funds were likely behind the dip. Friday's close about $1.50 below the put wall at 170 is of course non-optimal on a day with max pain at 175. What you need to do to see the incentive of the market makers is to look at the big high volume option expiration date May 17. This expiration contains options which were placed back when TSLA was trading lower and the max pain came in at 170. Thus, TSLA's Friday closing was "ok" for the May 10 expiration of options (lots of profits still made by the options sellers) but set those same option sellers up for a nice May17 expiration around 170. My mistake last week was not taking a look at May 17 expirations when I assumed the MMs were shooting for 180 this week. Their real target was about $10 lower at 170. Live and learn.

So, why the descent to 168ish early on Friday when the target for next week is 170 and something closer to 175 would have been more profitable this week? One possibility is that since all option sellers have not sold the same distribution of puts and calls, one big dog option seller on Friday was trying to optimize their profits for the May 10 week, irrespective of the broader option seller goals. Another possibility is that this pushdown to below 170 was only possible with HEAVY shorting for the past couple weeks. A close at 168 makes a close on Friday, May 17, at 170 just that much easier of net buying pressure still exists without the manipulative shorting. Perhaps the Monday trading will give some hint as to what's coming this week.

Looking at the past week's news, it is looking more likely that the mass firing of the supercharger team was a reaction to a manager who wouldn't provide the needed cuts. I've heard rumors and more rumors that some of the fired team members are being rehired by Tesla (unconfirmed). If so, the action wouldn't be seen as nearly draconian as it first appeared, and once the layoffs have been completed Tesla-wide we should see an improvement in morale. Despite a press release from British Petroleum seeking to acquire more superchargers, Elon Tweeted that Tesla would spend over $500M this year expanding the supercharger network.

In other news, Tesla announced a 0.99% loan program in the U.S. for Model Y, valid through May 31, 2024. This is good news for multiple reasons. First, it will spur sales because it's an attractive offer (cutting about 15% off some monthly payments) and it has a relatively soon expiration date. Marketers have long known that a good offer with an expiration date is an effective way to make a sale. Further, we may be closer than you think to the beginning of Fed rate cuts. We find out on Wednesday morning how the CPI numbers for April look, and I expect an improvement. With employment coming back into equilibrium, the Fed may soon be ready to begin cutting. This May sale improves the Q2 prospects without cutting the sales price. Tesla does have to account for the subsidy to the loan at some point, but that subsidy may be spread out on the books (we need an accountant to answer this question).

Meanwhile, Elon is Tweeting about FSD v12.4, 12.5, and 12.6.

Percent of TSLA selling tagged to shorts spiked all the way up to 67% on Friday

Yields on 10 yr treasury bonds rose to 4.5% on Friday

Max pain was 175 Friday morning. I suggest that the trading on Friday was based not upon this Friday's. As things worked out, the sweet spot for this Friday was between the 170 put wall and the 175 call wall. A close a dollar below the 170 put wall was no big deal.

Friday's TSLA option volumes

Unlike last week, TSLA missed this week's max pain by more than $5, primarily because the options sellers are already focused on next week.

Max pain for May 17 is 170. Looks like this coming Friday's max pain number best explains what was happening last week. Looking at the 170 strike, you can see over 28K calls but an even greater number of puts. If TSLA movement has been propelled during this bear raid by market maker desires, then a pause around 170 makes sense.

Amidst the very low volumes, TSLA has been sinking for the past two weeks. Notice, though, that Mondays have typically been up days.

Conditions:
* Dow up 837 (2.160%)
* NASDAQ up 185 (1.14%)
* SPY up 1 (0.13%)
* TSLA 168.47, down 3.50 (2.04%)
* TSLA volume 72.6M shares
* Oil 78.02
* IV 40.1, 0%
* Max Pain 175 for May 10, 170 for May 17
* Percent of TSLA selling tagged to shorts: 67%
* Volume at 4pm closing cross: 4.4M shares

 

[Papafox]

TSLA chart above

QQQ chart above

No big surprises on Monday. The Monday morning buyer exuberance showed up as usual and TSLA ran to 175. Option sellers then started their price walkdown but couldn't keep TSLA below 172 and thus that's the price we ended up with. I was curious to see just how much manipulative shorting would be done since the stock price was already below where the MMs wanted it for Friday's close. As it turns out, that zoom to 175 took a lot of work to get under control and we saw 62% of selling tagged to shorts, which gives us 11 trading days in a row at 60% or above.

Overall, I think the Monday strength was typical Monday plus the market liked the idea of Tesla's lower interest rate for a few weeks to stoke the sales. The option sellers are being careful to keep TSLA from getting too uppity. Biggest threat of the week may be Wednesday morning when the CPI numbers are released. If cool, the market will rally, and I think there's a fair chance of cool numbers this time around.

News:
* Sawyer Merritt tweets that Tesla has been given a construction permit for its Shanghai Megapack factory.

Yields on 10 yr. treasury bonds closed near 4.49% on Monday

Max pain Monday morning was 170, which is almost exactly even with puts and calls. Puts slightly outnumber calls at 175 and calls rule at 180.

Monday's TSLA options volumes

Volumes remain light as investors don't want to sell but aren't yet in a buying mood after the past two weeks of downward movement.

Conditions:
* Dow down 81 (0.21%)
* NASDAQ up 47 (0.29%)
* SPY up 0 (0.01%)
* TSLA 171.89, up 3.42 (2.03%)
* TSLA volume 66.6M shares
* Oil 79.16
* IV 40.7, 4%
* Max Pain 170
* Percent of TSLA selling tagged to shorts: 62%
* Volume at 4pm closing cross: 4.6M shares

 

[Papafox]

TSLA chart above

QQQ chart above

Tuesday was a more positive day for TSLA than you might have imagined. The stock gained 3.29% vs. the Nasdaq's 0.75%. More importantly, Tuesday's have recently been a day for a mandatory morning dip and getting the Monday climb back under control. In the case of this Tuesday, we saw relatively low climbing with QQQ until after 1pm but TSLA made its way within about 57 cents of 180 a little past 11am. You can see the typical market maker walkdown of TSLA from its high to about 1pm when QQQ started climbing, but that walkdown was much shallower than we have typically seen.

Bottom line is that the option sellers want TSLA close to 170 for Friday, and it closed at 177.55 on Tuesday (178.40 after hours) despite 62% of TSLA selling being tagged to shorts and a large 4pm closing cross volume of 5.2M shares. For the option sellers to be trying this hard with their manipulations and TSLA running this much higher, I consider this a definite failed manipulation, which is bullish in my eyes.

The market may have been responding to the news that the Biden administration is raising tariffs on imports of China-built vehicles from 25% to 100%. In theory, those tariffs give Tesla a powerful position in the U.S. EV space since the Chinese so far are the only real threat to Tesla's dominance. The market was happy too at Darth Powell's comments that inflation has been more stubborn than expected but Fed rates should hold steady (in other words, no raises on the horizon). My hope is that Wednesday morning's CPI numbers will be cool and get the market excited about possible rate cuts again.

All eyes will be on the CPI numbers at 8:30am Wednesday. This could be the catalyst that sends TSLA above 180 or it could be the wet blanket that the option sellers are hoping for. They need help because they clearly lost control of TSLA's price on Tuesday.

Yields on 10 yr treasury bonds closed down at about 4.44%

Max pain Tuesday morning was again 170. That strike is heavily put-dominated, but 175 is call-dominated to a lesser degree. I think the market makers are now keeping an eye on 180, trying to avoid crossing it again. They might not succeed.

Tuesday's TSLA options volumes

Not only did TSLA rise above the recent narrow trading range, it also showed noticeably higher volume as investors on the sidelines start thinking the bottom of this recent two-week dip may already be in place.

Conditions:
* Dow up 127 (0.32%)
* NASDAQ up 123 (0.75%)
* SPY up 2 (0.46%)
* TSLA 177.55, up 5.66 (3.29%)
* TSLA volume 86.1M shares
* Oil 78.36
* IV 41.4, 6%
* Max Pain 170
* Percent of TSLA selling tagged to shorts: 62%
* Volume at 4pm closing cross: 5.2M shares