TSLA, Patterns and dogfighting an F-14 in afterburner (check fuel!)
when there are more BUYERS the stock goes UP when there are more SELLERS the stock goes down. PERIOD … notice I didn’t mention anything about anything else because, quite frankly, NOTHING else matters. It could be the smartest MBA in Finance or CFA or the geekiest CMT on the planet using all kinds of technical indicators to show divergence, bollinger band breakout, moving average indicator w/ RSI or blah f’ing blah …. just find your edge, believe in your edge and invest w/ your edge. in the end, we are playing cowboy and indians shooting mouse clicks at each other. put your cowboy hat on or your indian out fit and go at it …
I love this quote from the Bible Luke 12:7: “Indeed, the very hairs of your head are all numbered.”
why? well, on a chart that is all we have until we start bastardizing them w/ all kinds of useless lagging indicators. We have a NUMBER for PRICE and a NUMBER for TIME.
so, we have PEOPLE (machines) who are buying and PEOPLE (machines) who are selling. (Machines can’t help be affected by the greed of the person who coded it) those people are governed by EMOTION and EMOTIONS go UP and they go DOWN. So, IF (the big IF) EMOTIONS fuel a move and NUMBERS are graphically showing the move then we can put the two together and develop patterns that show EXTREMES in emotional behavior. this is the nature of parabolic moves.
“calling” or “picking” tops has proven to be tough if not impossible … HOWEVER finding areas of potential tops/bottoms helps and then a STRATEGY to potentially take advantage of the inflection is a gameplan. (see Sugar post for an example)
the Greeks knew it, the Egyptians knew it and it’s the old “yin yang” coming right at ya … EXPLOSIONS up and down lead to corresponding moves in the opposite direction. It’s proven time and time again … parabolic moves are followed by devastating corrective moves.
Now to $TSLA … this thing isn’t parabolic, it’s a ROCKET SHIP…good on them, holy smokes and KABOOM this thing has gone into orbit. as a market musician coloring pictures and going to 3rd grade geometry. that scares me like anything else out there …
here are some potential targets, but this move is OVER and what’s another 10% in the intervening 50+% correction that will be forthcoming.
my first signal would be a MONTHLY signal reversal candle. NOTE IT HAS NEVER GIVEN ONE SO UNTIL YOU GET ONE KEEP RIDING THE ROCKET SHIP.
But, like fighting 1v1 in a high performance fighter the real threat becomes FUEL after a while. you can’t stay in after burner forever … you’ll run out of gas and flame out, just like this high flyer.