Elon Musk was looking like a crazy man in June of 2019 when Tesla (NASDAQ:TSLA) stock plunged to a low of $179. But now he’s a real genius, with the stock peaking at $969 on February 4.
Welcome to bubble land. This is just another sign, along with the very bubbly performance in most of the FAANG stocks, that we are in the final blow-off phase of the broader stock- and tech-driven bubble.
This bubble clearly now only has months to go – not years. And these recent movements could be a sign that this bubble top is coming even sooner if the Fed’s repo explosion in money printing abates instead of continuing.
Telsa dropped back just below $687 on February 6 and has been bouncing modestly since. It was up to $820 on the open Monday morning, but then quickly dribbled back down to $755, so no clear signs yet.
Tesla is tracking the extreme Bitcoin bubble of 2017 in pattern, though not in the percentage gains, with Bitcoin up 15 times vs. Tesla’s 5.5 times in a similar eight-month period. Still, it's the most dramatic of recent blow-off tech stock rallies.
If this first scenario continues to track, then Bitcoin could shoot up near term to $1,050 or so, then crash back to its bubble origin where it diverged from reality, back to around $400.
Here’s a second scenario showing Tesla peaking last week and bouncing a bit more before continuing down toward a $370 target.
In this scenario, we are bouncing into a rally that will soon fail and see those lows sooner.
Right now I’m in Sun Valley speaking at the Tony Robbins Platinum conference. The first big speaker was one of my long-time favorites, Niall Ferguson, author of The Ascent of Money. I’ll have more on him in Friday’s rant, but he sees the China bubble as the epicenter, as I do, and he sees Tesla building a major new plant in China and targeting that as the next big market…“What could go wrong here?” he comments.
It shouldn’t take long to see how this plays out with the extreme movements in recent months and days and how much it affects the broader markets.
But again, another sign of the late stages of the greatest bubble in modern history right into the most important long-term cycle for stocks: The 90-Year Super Bubble/Great Reset Cycle.