Gravity

I popped open my trading console this morning and one of the first charts I caught a glance of was TSLA. And it sort of hit me that the long term panels are nothing short of mind boggling. Look, I’m not an economist and neither do I play one on television (or is it Youtube these days?) but I’ve been around the block for a few decades now and let me tell you: this is not how large American automotive companies used to be valued.

Unless Elon Musk or his hair transplant surgeon managed to invent a low cost anti-gravity device there is no plausible reason why any automotive company should quadruple in price in the span of six months.

I’ve looked at tens of thousands of charts over the course of my career and there is only one way how exponential spikes like these resolve: with gravity asserting itself quickly and forcefully.

Now just for the record: It it impossible for TSLA to push to 1100 or 1200 in the next month? Of course not. But what are the odds of that compared with TSLA dropping to $700 or lower?

Exactly.

Exhibit B is AMZN which admittedly isn’t as over extended and probably has a bit more to go before we may see a correction. But based on the break out formation the direction here is pretty clear and it’s akin to the previous chart.

AAPL has not experienced two consecutive negative weeks since mid summer of last year. The monthly chart also is starting to look a lot like TSLA which is great news if you are holding the stock.

But the notion of sustainability comes to mind here especially given the supply chain issues it’s now facing over the coming quarters. I’m not one to fall for clickbait and doomsday scenarios but it seems the coronavirus epidemic is here to stay for a while and we probably haven’t seen the worst of it yet.

More effervescent charts below the fold for my intrepid subs:

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