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  • Yates Craig

Fly Me To the Moon

Fly me to the moon

Let me play among the stars

Let me see what spring is like on

Jupiter and Mars

In other words…

 

First, we saw bitcoin blast off to new heights on its way to the moon, then gold followed suit, reaching a new high in the stratosphere. Silver is also making moves and looks ready to soar, while oil looks ready for liftoff, waiting for the countdown. Elon Musk and SpaceX prepare for Mars missions and launch the giant Starship into space on Thursday. However, TSLA apparently slept through its alarm and missed the memo that everything is space bound right now.





While an actual cherry red Tesla Roadster is in space, orbiting the sun, the stock has different ideas. Tesla’s stock is now the worst performer in the S&P 500 Index for 2024. Declining margins, a reduction in EV demand, and a cooling story around EVs and the company have led to sharp drops in the TSLA price over the past six months. TSLA is very volatile and once it gets trending, it takes a while to slow down, no matter the direction. The first 6 months of 2023 were absolutely glorious for any bulls who bought the lows, but TSLA has retraced 70% of that bull run and is likely not done yet.

 

We received our most significant technical warning sign of 2024 on January 11th when TSLA closed below the 100DSMA, the 200DSMA, and key bullish candles after making a lower high. We sent out the chart below on January 25th, after its earnings, and TSLA has been following the count nicely ever since.

 

 

The next big warning sign on TSLA came on March 4th when TSLA got hit with one of the greatest bearish gap and goes you will find. What made it so great you may ask? Ok, let’s do it. Big Ace Ventura breath in First there was the bearish retest earnings gap on January 25th that created the most oversold conditions on TSLA’s RSI since the 2/27/22 low. It proceeded to make one final low with big bullish divergence and a sweet hammer candle. This low also eventually created a small inverted head and shoulders pattern that pretty much everyone on X could not stop talking about and TSLA bulls were salivating.

 

TSLA retested the neckline of said inverted head and shoulders pattern, letting everyone get long and then made one more high on 2/27/24. This high essentially filled the bearish earnings gap and completed the retest. It moved sideways for three more days with perfect inside candles as the pressure and indecision built. Then, on the brisk winter morning of March 4th, a decision was made, and it was bearish. TSLA gapped down and opened perfectly below/at the low of the prior four days of price action. All the bulls who were hoping it would break that pennant with a gap up were trapped, sad and scrambling for the exit. That was it. That was TSLA telling you it was not ready to go to the moon or even on a short jaunt in a puddle jumper. It continued its bearish trend and has fallen 18% in just 8 trading days since the gap.

 

So, what’s next for TSLA? If the Elliot Wave count continues to play out, there is further pain ahead for TSLA shareholders. The gap at $146.50 did not fill completely during the April 2023 retest.  It would have been too obvious and too easy. Everyone is still eyeing that gap and waiting for it to fill, so it is likely to overshoot this time and trade lower. If TSLA trades down to the monthly 100SMA, that should be an epic long-term opportunity. I see the worst case/best case, depending on how you look at it, as the $81.87 weekly gap fill, but its fundaments will be so appealing at that level that it seems unlikely. If TSLA does not hit any of those lower targets, look for a bottom to form with a trend reversing gap, a capitulation candle, a massive volume spike or some other bottoming signal that will indicate it’s time to lean more bullish than bearish once again on TSLA.



After so much TSLA talk there is hardly time for anything else, but inflation data is still top of mind for market participants, so here is a brief rundown. Inflation data surprised to the upside this week with hot CPI and PPI reports burning anyone who is counting on rate cuts. Instead of dropping, the latest CPI number actually crept up to 3.2% for February while Core CPI came in slightly above expectations, and still double the Feds target of 2%. PPI, which was released on Thursday, rose to 1.5%, much higher than the 1.1% that was expected. When Jerome Powell said higher for longer, it’s looking more and more like it actually meant it this time. The market is now expecting the first rate cut to happen in June of 2024 with only three total rate hikes for the year, down significantly from the six they expected coming into the year.

 

 

 

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