As we go into the second half of the year two outstanding sets of TSLA trades are unfolding, the first already has generated upwards of 700-800% returns, the the second has yet to trigger. In addition and hanging ominously over the market is the potential for a third wave down from the 2021-2022 market top which will have its own sets of exponential options' opportunities. I. TSLA TSLA Trades - Blue Line PRO TSLA Trades - Blue Line Premium As set out last in Friday's update, TSLA will either correct further into earnings before taking off into the 3rd and 4th quarter, or, it will replicate the energizer bunny and simply keep on truckin' toward a new all time high before December expiration. In either scenario a new set of aggressive out-of-the-money calls will carry us the rest of the way into December. Make no mistake, neither Cybertruck nor AI nor FDS is fully valued in the current share price. Expect anywhere from 50% to 100% still to come in the second half of 2023, the only question being from where, i.e., current prices, or a 38-62% Fib retracement as shown on the chart below: TSLA Intermediate (Daily) Trading Model Everything I have been writing about TSLA and the weeks ahead is shown on this chart, starting with EW structure, earnings due out July 24th and the past two post earnings runs in the first half of the year. The only bearish tone is the shaded Fib Retracement zone, currently around $200-230 worst case basis. If that ends up coming into fruition, we will be loading up on Dec OTM calls in both services. If instead TSLA takes off from around current levels, we also will be loading up on Dec OTM calls.. Any questions? II. The Big Picture: Longer Term still ominous, but yet to trigger. The Jun 26th IWM Sell Signal has resulted in a 50% drawdown on our puts, i.e., stop hit. The first hint that this Sell Signal was a false alarm was the failure of any other index to follow through with their own Sell Signals. If they do, we will revisit the short side, especially since we want to protect TSLA gains. For now, suffice it to say the patterns allow for both more upside and believe it or not, a third wave down in a multi year bear market - see Weekly DJI chart below. DJI Intermediate Term Trading Models Weekly Daily It will take a fresh red Sell Signal and then a break of the bottom trend line to trigger aggressive put positions for the second half of the year. If and when that happens there will be plenty of time to situate ourselves for the long awaited deep dive across all stock indices, retracing to the Covid Crash lows and possibly beyond. Monday is a half day trading and Tuesday the market is closed in observance of Independence Day. Wednesday begins the second half of 2023 and it should be one for the history books...be ready for anything. Happy July 4th to All! Allan
