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Thursday, February 6, 2020

Market Update Thursday 2/6/2020 - Wall Street Get's It Wrong Again!

Today, we're going to take another look at Tesla, and how Wall Street Money Managers totally got it wrong, and carry that theme into this ridiculous 3 day rally.

I blogged on Tesla a few days ago, just as it went parabolic, and that trend continues up until, just before the close on Tuesday, where it gave back $100 in the final minutes of trading. This was the day I decided to go to a 1 min. chart, in order to see what that looked like, and when that chart broke, it really broke!

How weird is it that the same day I go to a 1 min. chart, I'm able capture the crash in real time? I wasn't watching this chart when it broke, and unless you already had your sell-order in - just below the 940 level, you miss the boat anyhow. I call this a crash, but it was really more of a washout, to support, as I tweeted this morning.

 CNBC didn't ever report on the Tesla Crash, but then a day later - after they run 2 bearish stories - they're reporting that Tesla is trading in a "bear market", and this when it's still up 18% for the week.
Again I gotta wonder what's really going on behind the scenes, at the financial Fake News networks. Who owns then, and who is really being helped, by their ridiculous reporting? 

Today we see Tesla trading around the same level, it was a few days ago, when I started warning people not chase it, and even to to add to their shorts. Granted it's not easy coming in and selling 10-20% daily moves to the upside, but any fool should know that a parabolic move in Tesla - in which it's valuation surpasses McDonald's - is not going to last.

I was watching Bloomberg this morning, and learned it was actually professional Money Managers chasing that parabolic rally! How dumb is this new generation of investors?! I suppose this helps explain why this market continues to hold up 12 years after it started, as well as the panic buying we've seen over the past 3 days. 1000 point rally on the Dow, in 3 days, seems a little ridiculous.

Now, I've spent way too much time on Tesla, but it's another good example of how Wall Street gets it wrong, all the time, and another reason not to trust this market. 

This rally has extended farther, and rallied faster than even the wave "C" target I set in the previous blog. I think part of that is short covering, and maybe Asian investors moving their money into the US, and Europe? But this was an east bottom to call, and money gets put to work on the 1st Monday of the month.

The $VIX remains elevated, and ports being shut down over this coronavirus situation, and an overshoot to the upside doesn't make me more bullish, going into next week. Seems like the PTB like to take profits on Friday, and Monday, knowing the short sellers won't want to get short?

Risk Off

So far we're only seen risk priced into commodities markets, while the NASDAQ is trading at all time highs. This divergence scares me, and reminds me of the Hindenburg Omen, which is a situation where you have many stocks trading at all time lows, and too many stocks trading at all time highs, and a sudden re-balancing can occur.

I'm out of time. I spent at least an hour updating 23 Dow charts this morning, and this is just one of them.


Market looks pivotal here. You can follow my charts, and market alerts on my twitter page, and the public charts area. Find the links. Thanks for your support.

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