Tesla's Not-So-Electric Slide After Earnings

After earnings, Tesla is diving below its 200-day simple moving average (yellow line on TSLA's daily chart, below) for the first time since the very early days of January of this year. While the temptation may be to rush in a buy the "dip," in reality it is worth remembering we are talking about a very high beta, momentum-driven name which remains heavily-shorted. 

Heavily-shorted stocks in this type of epic bull run have often put longs in a jocular mood, in terms of taunting the many bears leaning the wrong way into a ferocious squeeze higher. 

However, when momentum does, in fact, shift to the downside that jocular tone is often hushed rather abruptly, since the shorts now have the wind at their numerous backs and may very well press for an exaggerated move lower (i.e., just as markets overshoot to the upside they can undershoot on the downswing). 

Hence, at least respecting the "Three Day Rule" with TSLA, a concept we have discussed for Members previously, is likely correct before assuming any type of near-term bottom in place. 

Elsewhere, the broad market seems uneven and sloppy, making it tough to put on too many trades at the moment. I see small caps in the IWM bouncing off $148, yet again, which compels us to draw a distinction between being cautious versus aggressively bearish.