TSLA Pops NFLX Flops
Oil, bonds and more
Tesla reported pretty solid earnings after the close today negating the -$55 move earlier today now trading up 5.5% at $1031:
However, when we look at the technical chart, we can’t help but think this move will be swallowed down by larger longer term sellers:
$1 Trillion market cap is a tough nut to swallow and priced for perfection, so let’s just say we are bigger fans of consolidation to lower at this point.
Now on the flipside of this euphoria lets look at Netflix disastrous earnings after yesterdays close…this dog is down 69% from the highs…YIKES!!!
Ok let’s continue to look at tech and a chart that we posted yesterday lets just say $2497 is a very big deal:
Futures wise the only chart that really stands out right now is the Ultra Bond. Somehow we are thinking yields have gone too far here too quickly and that the bond market may catch some players off guard here on a rally:
This is also coming off a stellar 20Year bond auction today as the US Treasury sold $16BN in 20Y paper at a high yield of 3.095%, which stopped through the When Issued 3.125% by 3.0bps, the biggest strop through in the (brief) history of the 20Y auction.
Basically anyone short into the auction results would have had to chase the bond market higher to cover the shorts and on the flipside, those smart arbs who went in bidding the auction and underhedged were handsomely rewarded!
The bid to cover jumped to 2.80, up from 2.72 in March (record high)
Indirects took down a chunky 75.9%, +11.5% from March's 64.4% which is well above the 6yr avg.
All in all let’s just say a few heavy investors have come to the table in an obvious way. Swimming up stream for sure, but noticeably treading water…which is good news for bond yields which have steadily risen at a torrid pace.
One last tech chart is oil, we have been seeing some fundamental news upon freight showing signs of capacity constraints coming off as this recent FreightWaves charts suggests a couple of things to us:
That torrid inventory build from Covid is coming off as carriers have cut load rejection rates by over 50%
Inventory build may be hindering businesses now that the economy has opened back up and less demand is driving inventories to build resulting in a margin compression revenue killer known to all as inventory overhang can murder P+Ls
This data may be consistent with a slowing economy and one where wholesalers will have a hard time passing input costs off on to end users.
Are we beginning to see the Bullwhip effect here??? Time will tell but maybe Oil will begin to notice, or maybe it already has…not to mention this little fact that last week, weekly exports from the US hit a record 10.6 million barrels a day, the highest in 2 years according to the EIA.
While we are on the subject, I noticed something strange in the Import/Export of Oil chart, which country is on both sides of the chart? Why is this? Why can’t the US just use its own oil and stop exporting it? This is a fake question btw, we know the answer, but its the absurdity of the assumption that the world operates on a level playing field when it comes to geopolitical and economic structure…this graph paints a very clear picture to us that something is rigged…if you don’t think so then try to come up with a logical answer for us as to why the US exports oil other than arbing some sort of currency profit differential somewhere:
Alright readers, that’s it for today, keep your eyes and ears upon the wheel and understand the markets
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