Yet another chance to short oil at $43.50!
What a great way to start the week and we had 3,500 on the S&P (/ES) and 12,000 on the Nasdaq (/NQ), 28,750 on the Dow (/YM) and 1,585 on the Russell (/RTY) this morning and the best way to short the indexes is to short the laggard. In other words, wait for at least 2 of the indexes to cross below those major lines and then, as soon as the 3rd one crosses below, short that and STOP OUT IF ANY of the indexes goes back above their line. If the 4th one confirms by crossing under – you are probably in great shape. That limits your losses but not your gains – it's a money-management style of playing that can be very effective in the long run as a single win can cancel out many losses.
Tesla (TSLA) split 5:1 and Apple (AAPL) split 4:1 today so Tesla shares went from $2,213 to $442.60 and AAPL went from $499.23 to $124.80 and both are up slightly on that action but they've been bid up so much the past few weeks in anticipation of the split that I don't think there's much gas left in the tank but I did say that at $1,250 on TSLA and again at $1,950 (now $390) and so far, so wrong on that one.
No matter how you split it, TSLA is a one-stock bubble and $450 is a market cap of $415Bn – more than the ENTIRE rest of the auto industry combined and they sell 100M cars per year and TSLA sells 400,000 or 1/250th as many. So, unless those cars cost $10M each with a 15% profit margin – their valuation makes no sense at all. You can't "grow into" that sort of valuation. Even if TSLA were going to be the ONLY car company in the World with the best margins in the World (car companies generally make 10% or less) – how long would that take? They are being priced like that now!