Tesla shares moving with lightening speed throught the EW model.

In this post I presented first what I thought might be an incorrect model for TSLA (one that I believed some people might be mistakenly led to believe was the truth) followed by my actual model choice for the stock's next move.  Turns out I was right this time.  In fact, TSLA shares recently reached all the way down to a nearly perfect 38.2% fib retracement a you can see from the chart below.

The typical retracements are shown below: 38.2, 50 61.8.  The 23.6 fib is also shown but it is rarely used as a full retracement point.  It is much more typically used as an intermediate support point as you can see below.  Look at how the chart touched the 23.6, bounced up hard and then gapped down to just below it in 1 huge step.  The herd knows where these technical support and resistance points lie even if most people don't even know they exist.  Think of these as potholes and logs in the path of the herd.

So, how can we tell what might likely happen next?  Obviously, a closer zoom in of the chart is warranted.  Before I lay out the chart, I will acknowledge that attempting to predict such herd movements to this level of accuracy is risky.  I only give the following chart 60 percent confidence.  In other words, this stock, this sub herd is too volatile and animal spirited to really have high confidence in most day by day moves.  If I predicted such moves with alarming accuracy up until now then the dice of chaotic chance simply agreed with my educated opinion this time.  I fully expect to get "slayed" on these very short term calls at some point (like I did with a recent AMD call).  When dealing with chaos, perspective is everything!

So here is my model.  To summarize, I think the massive recent move down was simply 3 of A.  4 of A should then be a sideways or zig zag move and then one final small move down to complete the A wave.  Next, a trade-able sucker's rally should occur into B.  I show a straight line but it will likely be an A-B-C movement.  After that I expect a massive collapse downward as the C wave plays out and brings the shares back to the 61.8% fib somewhere in the $90 range.

I do not think TSLA is a mania.  I do not think the shares will end up below where they started.  TSLA is driving value into the market place.  Electric vehicles are important to the future and nobody does them better than TSLA.  When the world finally comes up with a good battery chemistry for automotive applications you will have to be a moron not to own electric.  But nothing goes straight up or straight down and right now TSLA has a lot of making up to do for having gone straight up for too long.  As usual, time will tell.