Tesla now a super critical technical crossroads.

The first time I posted (ever) on Tesla was 10/05/2013.  The title of that post was Calling a Top on Tesla.  In it I wrote, "...if TSLA cannot break back up into the channel from below then I give it a full 90% chance that it will collapse in a dramatic way, and soon.  Why?  Because after 5 big waves up (with the ending diagonal following an exponential 3rd wave so that the wave count is pretty darned high confidence), we have the breakdown and now the back test".

I followed this post up with yet another, more detailed post on 10-9-2013 in which I wrote, "I think this is just the start of a major sell off for Tesla and my current price target is down around $100, perhaps as low as $93 (the 61.8% fib retracement)."

Today TSLA plunged 15% based on little real news.  In other words, as the EW model predicted, the herd simply decided that it was time for a change.  Pundits are out in force trying to analyze the move from every angle possible looking at all the minutia as if it was the cause.  None of them saw this happening in advance because none of them really understands why stocks move.  If the overall accuracy of this stuff is starting to catch your eye then I suggest reading up on Bob Prechter.  He is the current master of Elliott Waves and I owe a good deal of my understanding of not just wave theory but of economics in general to his teachings.

Having said that, my original model indicated that the ending diagonal was the peak of a 5th wave.   While not refuting this model, subsequent chart action has been more sideways that I had predicted.  In fact, it could possibly be modeled as a flag formation with today's action being seen as an E wave throw under.  If that were the case then the model would have to morph into the prior peak being a 3rd wave instead of a 5th and today's action marking the end of the 4th wave as shown below.  I am not backing this model at this time.  I am just saying that the sideways action of this chart could lead many to the conclusion that it was a setup for the next move up.

 So that is what many could be seeing today but I still back my original count which, as of today, looks something like that shown below.  In other words, by hook or by crook a pullback to the $90-$130 range is indicated as that includes the 38.2-61.8 % fib pullback ranges.  In this scenario, the most recent peak at $180 was a 2nd wave up after a so called zig zag a-b-c retracement from small wave 1 down (marked with a tiny blue 1 below).   If this model is correct then today's plunge was only 1 of 3.  In that case, the next move would be 2 of 3 which would be a good bounce, perhaps as much as 5% in the next day or two.  But in this scenario that would soon reverse into a massive 3rd wave plunge.

Anyone interested in owning TSLA will have a good chance to buy at much lower prices IMO.  The shares remain overbought big time even after today's plunge and it will really take a good head shaking to get rid of the weak hands.  By the way, the horizontal location of that blue oblong could be way off to the right into 2014.  I was mainly showing price level targets for the pullback, not time frames.