understanding the psychology of behavior

I took a closer look at CMF as an indicator, as pointed out in the comment by John. Looks interesting.

It is much clearer in showing the lack of accumulation over the past few months.  Typically the stock and the CMF increase and decrease together, with the exception from a move in April where NYX went from 101 to 92, and accumulation was being indicated. (Granted the value of the CMF was not that strong, indicating not that strong of an accumulation.)

And when I look at the chart from May to June in 2006, the CMF was very positive while in a clear down trend. NYX ultimately went to higher levels, but not before testing a low.

I guess what I am trying to say here is that the CMF looks encouraging, but I can not tell if a short-term move can be made based on it. 

But I can say, for the short-term, the stock is oversold, cheap and any weakness seen right now is very much correlated with the market negativity.

Thought this study was interesting… getting to know Mary Jane can make you crazy.  Potentially explains a lot.

Talk about a psychological kick in the head… excluding my personal life .  I was going to short the market in the AM, thought I missed it, but instead it kept on going down.  It keeps going down and brings stocks (on the individual basis) to levels they simply should not be.

NYX to be trading with a PEG of 1.05!!!!!

BNI to be trading with a PE around 16? (It is at a price where some of the big boys have some of their shares.)

TIE to be down 2 dollars when ATI told everyone their performce in Titanium was great? (And it is a metal heavily used by Aerospace industry. The only growing sector from the durabal goods number.) Oh did I mention management bought (in the open market) about $2M worth of the stock recently. 

Talk about opportunities.  Obviously the sentiment is piss poor, no chart needs to tell anyone that. Negative sentiment should be here to stay for August. But global growth was revised upward today by the IMF. (You didn’t see that in any major US publication, all you saw was chatter about the credit spreads.)

Now is the time to pay attention to fundies on the individual level with stocks that do not have too much uncertainty in them. (This excludes all financial stocks.)  You may have to sit tight until sentiment eases, but man, valuations are just getting compelling.

Found this article about global growth, wanted to pass it long. (This can be a bright spot in a seemingly dark day to be.)

The markets are taking a beating in pre-hours.  There is just so much downward pressure, and from what? (The durable goods orders were probably leaked, but that number is so inconsistent… just an excuse for the market manipulators.)  The SP500 chart is not too encouraging.  There is negativity and the SMA’s are starting to act as resistance.

I was going to short the market today, thinking Apple and Bidu would give it a boost in the AM, but I guess that opp is not there now. Despite their impressive results, Wall Street does not care.

I am keeping my eye on the QQQQ today.

I took today’s upward blimp in GS to sell my GS. Took a hit on it, but these things happen.  I have been calling the negativity for some time, and protected myself against it now and again with some puts, but for now the negativity is too much for me to handle. (I think GS is too cheap to take puts on, so I just sold my position.)

I wanted to perserve, and move on. I will use that cash to purchase the QQQQ 48 Dec Calls. (I will not do it right now, but soon… whenever the chart tells me, and post when I do.)

When I see the negativity clearing out of financials, or when GS gets too low to ignore I may trade it again.  But for now I want to leave it alone.

I will be because of NYX and its crazy trading over the past few days.

This is why I am liking Titanium (Ti).  Here is an segment from ATI’s report… look at the growth here:

“Sales of our titanium alloys to airframe customers continued to grow. High Performance Metals segment titanium product shipments in the second quarter 2007 were 16% higher than the second quarter 2006 and 10% higher than the first quarter 2007. Part of this increase is due to the expanding use of titanium in airframes. Specifically, in the second quarter 2007 sales of our titanium alloys to airframe customers were 43% higher than the first quarter 2007 and more than four times higher than the second quarter 2006.”

I really like the term ‘expanding use of titanium’.

NYX broke the support level I had my eye on (the red line). I was following the action through out the day (when I was able to) and it looked like it was going to hold, until the market crapped out.

If we are to assume NYX’s action today was because of NYX then it would appear on the daily chart NYX is going to hold here or retest the 72 lows.

Then there is the weekly chart where it will retest its support:

On the other hand, NYX is not the only exchange that went down today… ICE, CME, NDAQ and NMX went down too.  I would like to say today was due to the general decline, but time will tell. (I was thinking NYX would be around 80-81 before earnings was released… it can still happen, I think the market sentiment is holding it hostage for now.)

They being the powers that be…’the big boys’. The VIX (aka Market Fear index) has been at an elevated level despite the relatively nice action within the general market (excluding today of course).

A quick look for the past few months, the increase level in the VIX is obvious:

I find this development interesting as the market has been relatively stable, yet the overall VIX trending up. What I find even more interesting is when the VIX is layed behind the Financial Index (XLF):

Basically the Financials have been creating the elevated level of fear. This fear is now spreading especially to the small caps. I am seeing a lot of negativity, and the start of break downs with them.

If this is a real correction the market may keep going down. The SP 500 may see 1490 or even 1460. The VIX/SP inversion, along with potential support is what I am looking for. (Similar to what happened in March, the vix inversion not the level of decline.)

I have not sold anything (except the QQQQ mentioned earlier), actually bought more NYX today.  Despite the GS decline, horrible chart and anticipated trillion dollar write down, on a cash flow basis the thing is just cheap… i guess.

I will buy the Qs again by the end of the week if the chart tells me to, but AMZN’s results may give the Naz a boost tomorrow.