A couple of weeks ago, I tweeted the attached picture below.
At the time is when Tesla started to move aggressively to the upside; finally, it had a blow-off move similar to the way SLV did back in 2011, BYND a year ago, $TLRY a couple of years ago, Bitcoin back in 2017, the 3-d stocks in 2014, the solar stocks back in 2007, the rare earth stocks; MCP and REE, etc. There is nothing new about this.
When stocks start to go parabolic some people lose all their logic; you begin to hear outrageous things like;
- They are going to change the world.
- This time is different.
- This move can go on for a lot longer than you can remain solvent.
- There are too many naysayers for this thing to stop going up right now.
They basically drink the kool-aid and look for every reason to justify why the stock is going parabolic and why it will continue.
Finally, the move usually comes to an end when we find out that some fund blew up shorting it or when we hear an outrageous price target or that some prominent investor owns it.
Yesterday legendary investor Ron Baron predicted $1 trillion in sales for Tesla within the next 10-years, lol, we don’t even know what we are going to wear tomorrow, let alone what will happen in ten years.
Morgan Stanley’s Adam Jonas said that if Henry Ford and Thomas Edison made a baby, that baby would be Elon Musk.
By pure coincidence, I noticed that when the stocks that I mentioned above went parabolic and had their blow-off move like Tesla did yesterday, for some reason or another, the market pulled back immediately as well (look below). The correlation does not imply causation, it could be a coincidence and nothing else, but I think it is worth noting. I also believe that it gives you a hint about sentiment; stocks don’t go parabolic when everyone is in a sour about the market.
You can view over 100 shared trades here https://bit.ly/2umUIYG