Tesla's Big Move This is where another trading service would take a deep dive into fundamentals seeking reasons for TSLA being up over 80% from its April 22nd low of $138. Yet the most insightful observation that can be made is exactly that: TSLA IS UP OVER 80% IN THE PAST 10 WEEKS. This is the beauty of a technical analysis driven trading service, we seek not why, but if. Although our trading decisions arise from a slightly more complicated combination of a historically more accurate than not "Trend Model," and a subjective set of pattern recognition rules, a/k/a The Elliott Wave Principle, the bottom line analysis is based mostly on observation; whether price is moving strongly in one direction and if so, at what velocity is it moving, i.e., fast enough to buy an option on reaching a designated price level within the time frame defined as the option's expiration date? So while everyone and their brother is citing new model deliveries, rolling out the Tesla Robotaxi, AI, or the opportunity to get first dibs at SpaceX or Neuralink, we rest our game on the fact that TSLA share price is rising strong and fast enough to justify increasingly expensive call premiums. Meanwhile, TSLA is up 50% since June 11th, enough to turn in stellar performance numbers on all of our TSLA calls we are tracking between the two Blue Line Trading System services, the Jan 2025 calls in the Premium Service and Sep 2024 and Dec 2024 calls in the PRO Service. If the trajectory of the ascent continues even close to what has been virtually straight up, we are looking at the $300's by December/January and challenging the old highs at $414.50 by March 2025. "The Bigger Picture," (below) covers what could go wrong from here. Depending on TSLA call exposure, move stop up to $200 minimum, $220 for aggressive traders with multiple positions, willing to trade more often. Alternatively, lock in gains with trailing stops, i.e., a 50% decline from Best Returns high tick. TSLA Intermediate Term Trend Model Next leg up holds potential for huge percentage gains (from here) in Sep/Dec/Jan calls TSLA Calls - Tracking Positions Premium Service - January 2025 $240C PRO Service - Dec 2024 $230C & Sep 2024 $200C These calls are all well into triple digit returns, so kudos to all who took and held through that long Wave 2 chop into mid-to-late April. Wave 3 is acting as Wave 3's should, dynamic with opening gaps. Expect retracements along the way (ergo stops as set out above) and if you are feeling lucky, taking profits after extended runs with the expectation of rolling into higher, more leveraged strikes toward the end of retracements and/or nearing option expiration dates. I'll do my part, monitoring and making recommendations as expirations near. Easier said than done, but absolutely doable. Next strikes should be well into the $300's, with new expirations late in 2025, or early 2026. Bitcoin Next up, Bitcoin. My last comment (June 29) on BITO was: "Close to recommending puts, but Bitcoin has to break down into mid $50K's." It should have read: "Recommending puts on BITO, no reason to wait until the mid $50K's. Yes, trading is so much easier in retrospect. Now that Bitcoin has dropped into, "the mid $50's," is it too late to be buying BITO puts? Let's take a look at the charts: BTC BITO Discussion It looks like BITO is leading the way down, clearly breaking down below the lower trend channel. I don't want to chase, nor do I want to see Bitcoin break its lower trend channel without owning BITO Puts. Therefore, on a breakdown in Bitcoin below $53,500 (Friday's low) buy BITO Sep $18P: BITO Puts Highlighted strike ($18) is recommended, but any strike in table is acceptable depending on individual appetite for risk vs. reward, lower strikes = more risk, but higher reward. Stock Market: The Bigger Picture Hanging over the market this weekend are politics, geopolitical tensions (oil prices in particular) and the trifecta of inflation reports (July 11th), interest rates and the FOMC (July 31st). Because of the latter, we will be going out to September on any new stock index trades, hoping to catch the move with enough time to wait out any fallout from that July 31st meeting. IWM IWM remains on a Trend Model Sell Signal, waiting for a breakdown to add Sep 20th Puts in anticipation of an acceleration down. Without a breakdown, the most bullish play is in TSLA, not stock index calls. That's our trade plan going into next week's inflation report and likely into the July 31st FOMC announcement. QQQ The end of a bull run at multiple degrees of trend...four that I can count. Look for false breakout of top channel line and decline back inside channel - that would be a high confidence pattern recognition Sell Signal. Market Sentiment Too Bullish; At Major Top Levels Courtesy EWI International From Macro Charts What's the biggest risk to investors? Ironically, one of the biggest risks is that Stocks will start moving in the same direction / at the same time — something which happens often throughout history, yet now isn’t expected to happen anymore. While the direction could be UP (and I’m open-minded to this possibility, perhaps even a Bubble-like blowoff with Index volatility and Stock correlations both rising), we are at point where even a small, normally “standard” decline could be the spark that unwinds everything at once. Meanwhile, the last time the S&P fell 1% was more than two months ago. Historically, when low-Volatility streaks such as this one finally ended, if conditions were right (and Short Volatility positions extremely crowded as they generally are today), markets went through some rough times. IF and when this low-Volatility streak is broken, history suggests something important may be happening. (No one will think "something has changed". Most will brush it off as another dip to buy. Maybe they’ll be correct, but history suggests otherwise.) Gold: Another Breakout GLD Still Bullish for Sep calls GLD Calls - New Capital Ideas Sep $230 if looking for better leverage.
