Weak Bounce Wednesday
Not much is happening.
Powell and Mnuchin's testimony to Congress did not help or hurt the markets, which are still bouncing from September's 10% drop (what, you forgot that happened already?). Economic data has been blah and even politics has been blah this week so the market is just drifting back to test the weak bounce line – which it still hasn't reached yet and probably won't because, as we pre-noted on Monday, the 100-hour (weekly) moving average is about to death cross under the 400-hour (monthly) moving average and that's going to form significant upside restistance at the weak bounce line.
Failing to get back over the weak bounce line in the time it took you to fall below it (call it two weeks) means you are consolidating for a move below it – not recovering. This is a market that is only propped up by external (stimulus) forces, swimming in a pool of very low reality that operates in a Nation that is dumb enough to still possibly be re-electing Donald Trump AFTER seeing the evidence of the damage he's done in just 3.5 years in office.
I really can't believe there's even a discussion about Trump being re-elected, let alone it being close but it does seem close – or at least that's what the media say – and we can't trust them to tell us the truth anymore, can we? See! You don't know if we can – that's TERRIBLE!
The same people that are actually considering inflicting humanity with 4 more years of Trump are trading the markets and, if they don't see that the last 3.5 years have been a stain on the history of our Nation – they sure can't see that Tesla (TSLA) is on over-valued piece of crap or that paying close to 30 times earnings for the average S&P 500 compay is clearly an historical abberation that is certainly going to correct itself as soon as "THEY" stop pumping it up like a carnival baloon.
Elon Musk held his "Battery Day" at a drive-in yesterday and that was cool but not actually having a battery was not cool Battery Day was, as usual, full of empty promises designed to pump up the stock prices but it sounded a lot like "Next Year in Jerusalem", which Jews say every Passover but we never actually go. Musk says it would be great to have a battery that's 50% more powerful and 50% cheaper – and it would be – but he doesn't have one. He's "working on it" and I'm sure he is but a lot of people work on a lot of things and we don't pay them 300 times earnings for trying.
"One of the things that troubles me the most is that we don't yet have a truly affordable car," Musk said. "That is something that we will make in the future."
$400 is our October target price for TSLA so we don't want people to realize what a sham this thing is too quickly or it might go too low but yesterday's battery day disappointed even me – and I'm the one that keeps shorting them! As noted by Wired, one of the few tech magazines not in Elon Musk's pocket: "Elon Musk made big promises at Tesla’s highly anticipated event. But a prototype never appeared, and it was unclear what the company had actually achieved." Or, as noted by Electrek, which is so deep in Elon Musk's pockets it is covered in lint: "Tesla unveils new 4680 battery cell: bigger, 6x power, and 5x energy."
Of course, that's because the battery is 6x BIGGER than the previous battery - NOT because Musk actually invented anything. He's claiming a 14% cost reduction and that does make some sense as he's cut the need for casing by more than 14% (one cylindar instead of 5) but there's no indication of any improvement in energy density. Still, the consumers don't care how many cells are powering their car – they care about how much their car costs so any cost savings is a good thing, as long as the batteries don't explode more easily, of course.
“Taking the tabs out of the equation will allow you to have more coated area on your electrode, increasing the capacity of the cell without changing anything else about the design,” says Greg Less, the technical director of the University of Michigan’s Battery Lab. “It's not a new idea, but there are a lot of engineering challenges to making something like this work reliably and reproducibly.”
Elon Musk is a risk-taker and, as we learned from Boeing, radical design changes coupled with the stock market's relentless pressure to perform can cause even well-meaning companies to rush products (including vaccines) to market, sometimes leading to adverse outcomes for consumers of these radical products so please – be careful out there!
I said to our Members on Monday:
September 21st, 2020 at 1:38 pm | (Unlocked) | Permalink
Actually, if you see /GC bouncing and /SI and /HG are lagging, you wait for the next one to confirm and then go long on the laggard. See how easy these lessons are to apply?
/NG is the bargain of the day, testing $1.80.
Back over $2 now is a $2,000 PER CONTRACT gain in just 2 days and that's now our stop line.