Tesla (TSLA) is going to face a test.
I know it’s hard to look away from what Elon Musk is doing with Twitter… but for now, that’s a sideshow.
Yes, it is taking the TecnoKing’s attention away from his main company…
Yes, it could be making him some political enemies (and corporate enemies in the form of Apple)…
And yes, TSLA was down more than 2% yesterday…
But the real test isn’t going to be on social media or even on the Hill.
The real problem is that Tesla is getting credible competitors for its core business.
S&P Global Mobility reports that while TSLA still has the majority of the market, it faces tough challengers on both the low-end and high-end of the EV sector.
Ford, Chevrolet, Hyundai, Volkswagen, and Nissan all have strong products.
Meanwhile, companies like BMW are intensifying their investments to compete for the higher priced EVs. BMW is doubling its investment in a Hungarian EV factory, adding battery production to its facility.
Meanwhile, Elon Musk is facing demands from shareholders for a stock buyback… even as he’s still buried in the mire of Twitter.
In truth, I see opportunity here. TSLA’s market share is declining, but the overall EV market is growing.
The main threat remains political – as Musk has made powerful enemies (even as the GOP cozies up to him).
Keep an eye on the technical signals here. Remember, don’t trade based just on the news.
And don’t just go with your gut. Make sure you have the numbers to back it up.
Keep Moving,
THE OFFENSIVE is already underway.
WORD ON THE STREET
We Sit Down And Lesson When Jerome Powell Speaks
- Anyone Else Getting Tired Of This Guy? – Will he? Won’t he? Does it matter? Asian markets are uncertain and Americans are holding their breath as Federal Reserve Chairman Jerome Powell is scheduled to speak today. We’ll be keeping our ears peeled for anything about interest rates… but remember that Powell is a politician, not just a banker. He’ll be looking to sell his agenda, not just tell traders what to expect.
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Bipartisan Agreement To Stop Railway Strike – Speaker of the House Nancy Pelosi will bring a bill to the floor today to avert a nationwide railway strike. With support from both parties, the bill is virtually certain to pass the House… but the more fractious Senate could cause problems. Even one objecting senator could delay the bill’s passage.
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Morgan Stanley Warns Of Pullback – Morgan Stanley analyst Mike Wilson has joined the ranks of the doomers. “I mean nobody cares about what’s going to happen in 12 months,” he said. “They need to deal with the next three to six months.” He suggested the S&P could drop almost 25% in early 2023 and claimed “the bear market is not over.”
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Is There A Curse On Crypto? – It’s becoming a dangerous field, and I don’t just mean financially. Vyacheslav Taran of Libertex died after a helicopter crash near Monoco. Two other titans of crypto have died unexpectedly in recent days – Tiantian Kullander died in his sleep at age 30 and Nikolai Mushegian drowned in Puerto Rico.
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HOT SPOTS: What’s Going on in Geopolitics
- USA: Repairman For The World – Secretary of State Antony Blinken announced a $53 million effort to repair Ukraine’s devastated electricity grid, which has been hammered by Russian forces. Plummeting temperatures have sparked fears of a mass refugee exodus, one that might even necessitate the evacuation of Kyiv itself.
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Russia Claims To Be On The Offensive – After its initial gains, the Russian army has mostly been retreating over the last few weeks. However, Russian troops continue to surround the strategic settlement of Bakhmut in Donbass, hammering Ukrainian troops with massive artillery strikes. Ukrainians are responding with drone attacks, and Ukrainian soldiers boast superior equipment to survive cold weather. As the meat grinder offensive pushes on, Russia also claims it will not evacuate the Zaporizhzhia nuclear plant, the largest in Europe.
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China Tries The Carrot And Stick – The Chinese government has eased up on some COVID-19 controls as it tries to deter more public protests against the government. However, that doesn’t mean it’s backing down. Universities have sent students home and a massive police presence helped deter protests.
CUTTING EDGE: What‘s Happening In Tech
- China Stacking Nukes – The Pentagon reported that China is currently building up its nuclear forces. At its current pace, it will boast 1,500 warheads by 2035.
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CrowdStrike Stumbles On Earnings – All right, “stumbles” might be understating it. CRWD plunged almost 20% in after-hours trading. The company missed on both earnings and revenue, with CEO George Kurtz blaming “increased macroeconomic headwinds.” Not good enough, George.
- SpaceX Gears Up For Orbital Test Flight – The massive “Booster 7,” a prototype of SpaceX’s “Starship” Super Heavy rocket, was put through a successful test yesterday. Seven out of the eleven Raptor engines were ignited during a “static fire” exercise.
FOR YOUR CONSIDERATION
“A good portion of the time, excellent traders do nothing at all. They place their trades, set their autoclose orders, and go about their lives. Great trading is often extremely boring.
The Tao of Trading.
Look, you don’t need to be frantically clicking buttons and obsessing over what every ticker is doing. The point of a winning system backed by evidence is to make things easier for you.
Your Options Coach is on your side. Chris Hood has some practical tips to improve your trading game.
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