understanding the psychology of behavior

There is an interesting psychological dynamic when a person leaves you for no real reason other than ‘I just need time to myself’. It is a difficult thing to swallow, especially when done suddenly.

It leaves you wondering why… and that ‘why’ holds no boundary to the imagination. (as anyone can understand) Mere acceptance is then attempted simply because you care about this person so much you allow them to have whatever reason they think is driving them.

But the inability for the person to explain that driving force to this ‘feeling’ leaves you in a psychological state of highs and lows (with anger, sadness, distrust, annoyance, pity toward the individual… etc) that unquestionably make you know you are alive.

I never thought I would experience such emotions, but the experience is interesting. Personally, I much prefer happiness… always have.

Now is your chance.  It is oversold and sitting on multiple supports from the daily and weekly chart. (I care more for the weekly right now.)

Currently it is being dragged down with the negativity of the steel sector, and the daily chart indicates this negativity.

The break down is happening, as I pointed out, but soon it maybe okay to test the waters again. Negativity still remains, especially in the daily chart, but NYX is about to sit on a weekly support. Also, the estimates appeared to be quietly revised yet again.

The PEG is now 1.11, and for a company not yet maturing (regarding earnings growth) that is a pretty good valuation. As per the weekly there appears to be support around 73ish, and an initial re-entry maybe a good idea there, at least for a bounce. But if you want to be a real bottom fisher, then wait for high 69.

Seeing how the market is reacting lately, especially with the not so good charts of the Investment Banks, I am waiting for 70 before I re-enter. When I re-enter I will be playing the Jan 08 80 Calls.

As I write this GS is testing 215 with a forward PE in the 9s! To help out with the market fear BSC created, Goldman issued subprime bonds were downgraded.

The real question is whether or not all this negativity on the IBs will have an impact to earnings?

If it will then GS has all the right in the world to go down. And the chart is not pretty right now. 2 moving averages are pointing downward, and it looks like GS (with the market) will stay in the mud until this fear and uncetainty go away. The only thing that can do that is the end of summer earnings of the brokers. (Or Goldman flat out tells us this is meaningless. But Goldman is not about to do that.)

Despite Goldman’s CFO having uncertainty regarding subprime investments during the last CC conference call, The Street still raised their estimates the coming quarter. This tells me, fundamentally, the street believes current estimates will be held despite this mess. I guess we have to wait and see.

But seeing the chart development, it is prudent to say ‘hold’ for now.

Unadulterated fear and Uncertainty are hitting the markets on all sides.  Head for the hills… head for the hills.

With all due respect to the pros, they are acting like a bunch of babies. Or at least facilitating the uncertainty, obviously for their own benefit.

If I remember correctly, Bear Stern was always a target due to the subprime thing, and that is what is biting them in the ass now.  This is why it trades off its high, and IMO should not be trading at the value of Goldman.

Am I naive to think these people understand risk?  Anything can happen, anything, but right now I do not see the global trends lining up to conspire against the financial systems.  I just do not see it.  I see contained blow ups thanks to over leveraged managers. (But is this not the point of a market? Someone was on the winning side of that blowup.)

I see the bond prices, and they are at a yield they should have been MONTHS ago. I see gold and no bullishness in site for it.  (If the world was coming to an end, I would think Gold would see more buying… no?)

I am not an insider, wish I was so I can hear what they have to say, but I am not.  All I see are the indicators surrounding our current situation of uncertainty and fear, and those indicators say… RELAX, buy some GS. 

A lot of people equate capitalists with greed, but those are the ingorant ones. (ie the Chavez, commi/socialists of the worlds)

A necessary componet to the capitalism of today (that makes it work so well) is generosity.  Many fail to see it because it is rarely made public or talked about. (And the Chavezs of the world never mention it because it fucks their argument about the capitalist greed.)

Capitalism means a lot of things, but one of those things is generosity.

(Many will argue that is still small in relation to GDP, but those people will never be satisfied.)

I covered the SPY puts. (They were much needed protection).  Market seems to be holding up, despite the decline.

Interest rates are not up… looks like media has to find another reason. 

TIE:

Increased my TIE position at the relative lows. I thought TIE would have shown more of a consolidation or oversold position at the end of the day, but the subsequent rise stopped that. So if you are looking to get into TIE, you may have a chance tomorrow. (But it is a crazy moving stock sometimes and could very well explode to the upside out of no where.)

BNI:

It is oversold, and bounced off near support levels. It has a hint of negativity because of recently released ease in frieght volumes via a compeditor, and (from what I think) the washing out of momentum players. (The momentum players came in once they found out a heck of a lot of big boy players are in the name, Buffett included.) Valuation is now reasonable, assuming earnings power is maintained, however due to the negativity a hick up around mid 88 could be seen thanks to the 14 SMA. (This assumes the momentum players are still in the stock, and looking to exit on the quick pop upward.)

The market can go either way, but a look at the 10yr and the thirst the media has to blame the yield rise toward a lowering market, the markets may decline. Earlier I stated to buy a bunch of names before their move, as I noticed the market turning intra day (and was right). However, near term the market is still iffy.

SPY is at resistance, with multiple indicators suggesting weakness and further consolidation:

To support a downside view, there is the 10yr yield chart. It looks oversold, and ready for a drift upward.

Fundamentally speaking the yield is where it should be, anywhere around 5.25%. (And what tells me the rate rise will not get out of hand is the relatively negative Gold chart.) But as the yield drifts up for technical reasons, I have a feeling the shorts will use this (and the ambiguous market) to control the markets downward tomorrow.

I am now overly long (due to an increased TIE and added BNI position at the day’s lows), and because of this (and the above reason) I took out a few protective July 152 SPY Puts.

“No Fear. No Destractions. The ability to let that which does not matter truly slide.”

-Fight Club (my favorite movie)