These two DJI charts spell out the status of the stock market going into the important CPI report out tomorrow pre-Open. DJI - Daily Trading Model This first chart is a straight forward swing trading chart based on daily price bars. It looks equally capable of breaking out to new highs or breaking down to slice through the lower support trend line. Tomorrow's CPI numbers could trigger either move, but what is more telling is pulling back a little and looking back longer term to early 2020: DJI Longer Term Trend Model On this time frame a break below that lower trend line would have ominously be forecasting a deep dive to the low 20'000's and possibly approaching the Covid Crash lows of 2020. The first trigger on a move like this is a fresh red down arrow on the top chart, then a second red arrow on the longer term chart and we have no choice but to be all in on the short side for the rest of the summer. Please review this past Weekend Update which sets out the current market psychology of EXTREME GREED, compatible with a bearish resolution that could start as early as tomorrow morning upon release of the CPI Report. A bullish reaction to that report would turn psychology even more ebullient, i.e., even more bearish for the intermediate term. In other words, the case is building for new short positions, but no new red down arrows and no major breakdowns means no reason to put on new trades...yet. TSLA - Update Discussion from Twitter, today: Teslaconomics Many don’t understand the significance of what Elon is really saying here, so let me break it down. Elon’s statement points to a two-fold revolution in the automotive industry that is taking place. First, is a future dominated by electric vehicles, replacing a majority, if not all, fossil fuel-dependent systems. This switch to EVs is vital for combating climate change, reducing global carbon emissions, and building a sustainable future. Second, he’s emphasizing the importance of autonomous driving technology, which essentially drives a person from point A to point B without human intervention, and in the future, without human supervision. Elon is implying that this advancement is even more crucial than just solely building EVs by itself, as Tesla continues to push the boundaries of physics, AI, and technology to build products that show the world they are in fact at the forefront of both of these things. However, legacy automakers are grappling to catch up in both these excruciating tough areas. Accustomed to producing conventional vehicles, their transition to designing, manufacturing, and marketing EVs, let alone self-driving ones, represents a SIGNIFICANT challenge. They need to truly embrace and go all in on this change that is taking place, overcome steep learning curves, establish new supply chains, and adapt to a rapidly changing environment. Tesla’s dual lead in BOTH electric vehicles and autonomous technology sets a very high bar that these companies must strive to meet. It will be a tough road for the ones that DO NOT 1/ embrace the EV revolution taking place, 2/ leverage Tesla’s supercharger network, and 3/ establish a partnership to license Tesla’s self driving technology. ----------------
