Hey guys, I just want to apologize for posting this here. I made a post on r/stocks that got removed because it confirmed my thesis about Tesla being in LPSY 2, and it is going down. The mods removed it, saying it was a duplicate, but I am assuming they have a position in Tesla, and my posts weren’t helping. Some users asked me for a copy of it, so instead of sending it to each person, I’m posting it here. I apologize it is not healthcare-related. Those will come later. There is just a giant mess going on right now, and we are scrambling to figure out the direction of healthcare. I appreciate your understanding.
This is a follow-up to my two earlier posts from the weekend and three days ago. If you missed them, I strongly recommend reading both to understand the foundation of what I’m about to share. You can find them here: Part 1 and Part 2. I’m writing this now—before more macroeconomic data drops—so this post can act as a thesis, rather than a reaction to headlines. I’ll start with Tesla, then move into the broader economic signals
To begin with Tesla: the Wyckoff distribution thesis I outlined is playing out exactly as anticipated. I argued that we’re seeing a classic Wyckoff distribution structure, and the chart supports it. $480 appears to have been the UTAD (Upthrust After Distribution), $360 marked the first LPSY (Last Point of Supply), and based on recent price action, $288 is shaping up to be the second LPSY. This doesn’t necessarily mean the markdown phase starts immediately. There could be more LPSYs before a breakdown. My working hypothesis is that hedge funds and institutions are over-leveraged on Tesla, but following a string of negative catalysts, they’re now quietly distributing their positions. The strategy is to sell into retail strength without crashing the price, a process that aligns perfectly with Wyckoff’s methodology.
For those unfamiliar with Wyckoff Distribution, it’s a market behavior framework developed by Richard D. Wyckoff that describes how smart money (large institutions) unload shares to retail investors before a major downtrend. Unlike accumulation phases, which precede bull runs, distribution happens near the top of a cycle and is usually disguised as a range-bound, sideways market. The price often gives the illusion of strength—breakouts, rebounds, and fake rallies—but in reality, it’s a setup for the next leg down. This method is useful because it mirrors how human psychology and institutional mechanics actually work. Large players can’t exit massive positions all at once without tanking the stock—they need time, volume, and retail enthusiasm.
In Part 2, I highlighted the LPSY phase as one of the most deceptive stages in distribution. It’s when rallies fail to reclaim previous highs, and volume dries up on upward moves while increasing on pullbacks. In Tesla’s case, that’s exactly what we’re seeing. The stock is printing lower highs, support levels are weakening, and the momentum is fading.
Let’s talk fundamentals. Tesla is, at the end of the day, a car company. Roughly 80–88% of its revenue comes from vehicle sales, and around $692 million last quarter—about 30% of auto revenue—came from regulatory credits. These credits are earned by selling electric vehicles and are sold to companies that don’t meet emission targets. So fewer cars sold means fewer credits earned. The rest of Tesla’s revenue comes from segments that currently don’t produce meaningful profits, and accounting for unrealized bitcoin gains is financial theater. Unless Tesla introduces a product that becomes a major revenue driver, its valuation rests squarely on its ability to sell cars.
The problem? That ability is deteriorating. As of March 26, 2025, Tesla’s global sales are showing real weakness. In Europe, Tesla’s sales dropped 49% in the first two months of the year, with German registrations plummeting 76% year-over-year. In the U.S., February sales fell by nearly 6%, particularly in the Cybertruck and Model 3 segments. China has shown slight recovery in insurance registrations, but it’s not enough to offset broader trends. While some Tesla fans claim the Model Y refresh is to blame, that’s only part of the story. The broader issue is rising competition—especially from Chinese automakers—and growing public backlash against Elon Musk’s polarizing political behavior. In January 2025 alone, Tesla’s registrations in Europe fell 45% despite growth in the overall EV market. That’s not just about product updates; it’s about consumer sentiment.
https://www.wired.com/story/whats-driving-teslas-woes/
https://www.businessinsider.com/us-latest-place-tesla-sales-plunging-elon-musk-2025-3
https://www.npr.org/2025/02/27/nx-s1-5311609/tesla-sales-europe
Meanwhile, there are glaring signs of weakening demand. Since October 2024, Tesla has been offering 0% APR financing and attractive lease deals—clear signs that demand is softening. Other automakers like Lexus are following suit. These deals aren’t acts of generosity—they’re admissions of a problem. In addition, Tesla recently lost access to Canada’s federal iZEV rebate program, which offered $3,000 to $7,000 per vehicle. Canada froze $43 million in pending rebate payments and banned Tesla from future programs. Considering Tesla sold around 52,000 vehicles in Canada last year, this is a major blow. Without those rebates, sales in Canada will almost certainly collapse.
https://ca.news.yahoo.com/canada-freezes-tesla-rebate-payments-231257713.html
As if that weren’t enough, Trump just announced a 25% tariff on all imported vehicles and auto parts, effective April 3. Even though Tesla manufactures in the U.S., Elon Musk confirmed that Tesla is not exempt—its supply chain relies heavily on imported components and vehicles from its Berlin and Shanghai factories. This is a surprise move that caught Wall Street off guard, and it forces hedge funds to rethink their exit strategy. If they were hoping to distribute slowly, they now have to accelerate. This event has serious implications for the Wyckoff distribution pattern—it may extend the LPSY phase as institutions scramble to exit without spooking the market. Tesla cannot survive as a global brand if it’s being penalized globally, and American demand alone isn’t enough to justify its valuation.
Add to that the fact that JPMorgan already cut Tesla’s price target to $120 before the tariff announcement. The fundamentals were already weakening—now the headwinds are even stronger. This changes the whole distribution schematic. I expect we’ll see a few more LPSYs before a true markdown begins, because unloading a massive position into a weakening market takes time. And we haven’t even seen the final economic downturn yet.
Zooming out, the macro picture is flashing red. Consumer confidence is falling sharply. The latest report showed the index dropped 7.2 points in March to 92.9—far below expectations of 94.5—and the sub-index for short-term expectations fell to 65.2, the lowest in 12 years. Anything below 80 historically suggests a coming recession. Consumers are starting to pull back—holding on to cars longer, delaying big purchases, and seeking used options. Meanwhile, automakers are offering more and more incentives. This is the early phase of a slowdown.
https://apnews.com/article/consumer-confidence-economy-inflation-bd6ece8784efff205e2ab922bcb86958
Even the Durable Goods report is being spun. Yes, the 0.9% growth beat the expected -0.1%, but last month’s number was 3.3%. That’s a massive deceleration. Durable goods—like cars, appliances, and machinery—are bellwethers for economic confidence. Slowing growth here suggests caution from both consumers and institutions.
That’s how distribution works. The public buys on the illusion of strength while smart money quietly exits. Tomorrow we get final GDP numbers, and on Friday, the Core PCE Price Index, personal income, and personal spending. If these show further weakness, expect institutions to continue using fake rallies to offload positions.
Retail is being played. There’s a generation of investors who don’t remember 2008. They think every dip is buyable. They don’t understand how long it can take to recover from a true economic reset. And that’s why this Wyckoff distribution in Tesla—and possibly the broader market—has room to continue. The lows we saw last year may look like nothing 10 months from now. For those of you who forgot, the dips for 2008 started in late 2007 and it continued to dip until March 2009 before it started to go up. It was around 16 months of nothing but dips.
Don’t believe in the math or the theory? go ahead and buy the dips and contribute to this growing numbers
https://www.reddit.com/r/stocks/comments/1jjmb9k/retail_traders_plough_67bn_into_us_stocks_while/
*I forgot to add that we haven’t go to the part where the world retaliate against us for this. Fun time.
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