TSLA Tuesday Update 02/28/2023

 If you read Monday's Update, you had a pretty good roadmap for today's session. In that update I said I was expecting a move higher at the open, followed by a 6-8 point pullback. TSLA did open higher, gapping up and hitting a high of 211.23. It is notable that it stopped just shy of the 212 lower bound that would end the sequence from the 101.81 low. It is nice when a forecast comes to fruition, but obviously they will not all be that good. But the accuracy does speak to the forecasting power of my model. Some set-ups lend themselves to highly accurate forecasts, while others are more difficult. I thought I would walk through what I saw yesterday in the set-up, and how I was able to arrive at those forecasts.

 

Going into today's session, this was the set-up. On the lower left side of the chart you will see a 4 on the 22nd. I will start there. My count has Wave 1 completing on the open of the 23rd. The next labels you will see are for Waves A, B, and C. These are the first 3 waves of a 5 wave sequence. From Wave C, there are labels for the first three waves of a lower level sequence, Waves 1, 2, and 3. After that another sequence with Waves A, B, C, and D labeled. From Wave D, you will notice a slight pullback into the close. My model is based on a simple premise: Namely that when waves are taken as points, with coordinates (Startpoint, Endpoint), and a linear regression is applied to those waves, a wave completes when the first, third, and fifth waves of a sequence have an R^2 value above .99.

I will start with the final A-B-C-D sequence on the chart. The previous Wave 3 is our start point, so we have 197.67-194.00-208.22-204.22-209.42. Taken as points, that gives, (197.67, 194.00), (208.22, 204.22), (209.42, X), where X would be the Wave E completion point. The pullback at the end of yesterday's session had a low point of 206.35. Using that as X, the resulting linear regression gives an R^2 value of .9952, above the .99 threshold. This allowed me to consider that as the endpoint of the sequence.

The A-B-C-D-E sequence was then the end of Wave 4 of the 1-2-3 sequence started on the 24th. So we have (192.80, 195.67), (193.58, 197.67), (206.35, X). The minimum value for X that gives an R^2 value above .99 for that regression is 208.02. This gave a me a minimum value for today's opening move up. The high of that move, 211.23 gives an R^2 value of .9955.

That opening move to 211.23 thus completed the 5 wave sequence from Wave C on the 24th, or Wave D. Given the four completed waves, the sequence is (205.14, 196.33), (203.28, 192.80), (211.23. X). Being able to infer today's opening move allowed be to extrapolate that into the 6-8 point pullback, since it would be completing the inverted corrective wave starting with Wave 1 on the 23rd. The pullback to 203.75 was just under 8 points, and gave the sequence an R^2 value of .99086.

The final count after that is shown here:

Looking at today's action, we had the opening rise to 211.23, followed by a pullback to 203.75. That sequence looked like, (211.23,206.43), (208.43, 204.71), (206.19, 203.75), with an R^2 value of .99038. From there the market moved higher again, tracing out a five wave sequence as (203.75, 206.33), (204.86, 207.88), (206.31, 209.41), with an R^2 value of .99357. After that TSLA moved lower, dipping to 204.91, before trying to rally into the close.

In my current count from the 101.81 low, TSLA has now completed four waves of a five wave sequence, with Wave 4 completing at 191.78. Today's low would be the completion of Wave 2 from that Wave 4 low. With four waves completed, we can project Wave 5 to complete between 212, and 234. That remains my current target. Some of my work shows a convergence around 229, but any move between 212, and 234 would be sufficient to complete the sequence. The 191.78 Wave 4 low would be a critical point. A move below that would require a revision to the current count.

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TSLA Update 02/27/2023

 Friday saw a gap down for TSLA, falling to 192.80 shortly after the open. TSLA then traded in a narrow range, with a slight upward bias, throughout the day. The fact that Thursday's 191.78 low held was important, as that is my Wave 4 low, and a break below 187.61 would invalidate the count, and likely mean a top was in. After holding those levels, TSLA moved markedly higher at the open, gapping up to 208.22 before a slight pullback. Another move higher brought the stock to 209.42, which proved to be the high of the day. From there TSLA fell slightly into the close, ending the session at 207.60.

A very short term count would call for a move higher from the close, followed by a pullback of 6 to 8 points. This move higher has a lower limit just below today's high, but the upper limit gives it a large range to work with. That would set up a final move into the 212-234 target area mentioned Thursday. On a cautionary note, another move higher at the open could put TSLA in that target range, so close monitoring will be needed from this point. One possibility would be for the initial move higher to carry to a point where the 6-8 point pullback keeps it above the 212 target. 

On the downside, I am watching the 191.78 and 187.61 levels. A break of those would seem to be near term bearish. Should be an interesting couple of days.

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Monday Update 02/27/2023

 In Thursday's Update I mentioned the possibility of another move down for SPY, probably below 396, followed by a move higher. Friday opened with a gap down, opening just below that 396 level at 395.54. Most of the day was spent bouncing around the 394-396 level, with only a couple of failed attempts to break through that 396 level. Today opened on a firmer note, with SPY gapping up back to the 400 level. I have also mentioned 402 as a near term resistance level, and SPY reached 401.29 before spending the rest of the session giving back most of those gains, falling back to 396.75 before rallying slightly into the close.

 Friday's drop below 394 was slightly more than I was anticipating, which again still leaves several possibilities from this point. There is still short term resistance at the 402-403 level. The primary short term count still calls for SPY 406-411, but the 402-403 may be all it can muster. 

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