In my February Tesla update, I described how Tesla was positioned for an accelerated breakdown if prices slipped below the $780 low. At the time, TSLA was trading just above $800 (see chart below). It appears the breakdown is underway, and this could turn into an outright collapse into mid-March.
CURRENT CHART (TSLA): Anybody that bought Tesla after they entered the S&P 500 on December 21, 2020 is losing money below $650. A lot of new investors have only seen values go higher - never lower. If prices drop below $600, I think some of these investors may begin to panic out of their positions. The $600 level may be tested soon, let's see what happens.
Note- Prices could collapse to the price gap near $420 or lower if we enter a waterfall type decline.
MARKET UPDATE (SPY): Prices are very close to testing last week 378 low. The market remains vulnerable to a potential breakdown into mid-March, similar to 12-months ago.
Potential Breakdown Triggers: Senate negotiations over the $1.9 trillion stimulus turn negative or spiking interest rates are the obvious choices.
Note- I'm afraid a breakdown in the stock market could trigger more downside in gold miners, so I'd like to wait a little longer to see if stocks break down before adding to our educational portfolio. Senior gold miners are very cheap, in my opinion.
AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. For more information, please visit here.
For a look at all of today's economic events, check out our economic calendar.
This article was originally posted on FX Empire
Natural Gas Price Forecast - Natural Gas Markets Look Sluggish
Gold Price Forecast - Gold Reaching Down Towards Massive Support
Tesla Stock Update: Meltdown in Tesla Beginning as Forecasted
USD/JPY Price Forecast - US Dollar Continues to Shoot Straight Up
Can the S&P500 Reach Around 3770 Before Moving to 4000?
Stocks Tumble, Gold Dumps , Dollar Jumps Amid Treasury Yield Spike as Powell Signals Inflation is Ahead