Market On Open - Wednesday 24 April

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“The Most Entertaining Outcome Is The Most Likely"

by Alex King

Or as the full version of Mr. Musk’s statement goes, “… but not necessarily the outcome that is most entertaining for those affected”.

Tesla earnings yesterday after the close were pretty awful on most fundamental measures. But so heavily was TSLA stock shorted - directly and via put options - that, predictably, the name mooned on the print. Today anyone selling puts is happily collecting their premium, and anyone who bought them is crying into their Celsius. The bullish spirit is driving up the Nasdaq at present too. Personally I think TSLA likely has more weakness ahead of it - I opened a small speculative short equity position after the stock mooned in postmarket yesterday - we’ll see how that goes once all those retail put options get torched. If TSLA keeps going to the moon, so too with the Nasdaq and it will take my TQQQ position with it, so I can eat some losses on the TSLA short if needs be.

Otherwise, markets remain on an uneven keel during this period of general weakness. I am not sure the selloff is complete; and I am not sure there is tragedy ahead either. Most likely, in my view, another technical selldown to come before a firm low is found and then a sprint to new all time highs. Treasuries are selling off again today as the 10yr yield climbs - I think Treasuries will also be turning bullish soon, but this is purely chart analysis, not based on anything in the real world!

For now, let’s get into the detail on the market charts. Below we walk through our daily take on all four major US equity indices, plus treasury bonds, oil, volatility (via the Vix) and sector ETFs.

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Short- And Medium-Term Market Analysis