understanding the psychology of behavior

The trade can continue to 182, but the market is up more than I expected and took my profit in GS.

I was driving back from Boston, and had a limit order at 9.00, but obviously just missed it. If I was by the computer I would have executed the trade because that ramp to 8.80 was mainly due to the volatility at the time.

The chart is still bullish, on the very short term to achieve 182, but I want to be ahead of the curve regarding selling. (A late day rally should come, giving an opportunity to cover around 8.50.)

Thanks to today’s strength, and the psychi concerning Fed intervention, GS is breaking the 14SMA (which acted as resistance for the last month).  With the break, GS could see 182, or the 28SMA.

The play… the 175 Sept Calls. (Be disciplined, sell at 182 or if GS craps out toward the end of day.)

Barclays needed to borrow 1.6B pounds from the Bank of England to settle their trades.  They should have enough to cover this, as it is a fairly sizeable institution, however they obviously did not.

Cracks are still there, becareful out there.  The markets are poised to be strong today thanks to proper action by Bush and an anticipated rate cut.  As the market rallies (and it could rally over the next week or two) I would start easing long positions or protect yourself from the down side.

I still think the markets will take a hit due to the reajusting of the asset/earnings value from the banks, especially if some are in threat of going under.  And we will not know this until they report in a late Sept/Oct.

Bush is stepping in to help those that need it.  Basically this is helping those that need it, but it is also bailing out the greedy mortgage brokers that pushed these things on to people that did not know better. 

The critics to the bail out do not like the fact that it is helping the mortgage companies that sold the mortgages, but the market is already punishing those companies as are investors.

I do think Bush is doing the right things at the people level, so that those people affected can save their homes. And as per the futures, the markets agree this is a good thing.

I want to short this market so badly, but I am hesitant.  If the Fed pulls the trigger on a rate cut, this market rallies and I do not want to get caught with my pants down.

Going purely on the technicals, a short is merited here. I would look to the 145 Sept SPY puts. But i see intraday strength, and I am being controlled… just waiting and letting my long positions ride whatever is causing this bounce right now.

Will I have faith in today’s bounce? That depends on end of day action, and as of now I am on the fence. Curious to see how the market ends the week.

oh… I managed to get access to my real-time streamer… hooray Beer - because that is what i will be drinking tonight :)

Thought this was interesting, as it showcases air travel demand in China (and what I would like to think other developing countries with strong economies).

China’s air traffic rose 16% from a year ago.

Under pins the demand for air travel, hence the need for planes, hence the need for Titanium, hence the investment in TIE.

CNBC has been reporting heavy insider buying via executives. I just want to remind everyone that one stock with heavy insider buying is TIE.

Just take a look at the sea of form 4s.  Clicking each one will indicate millions of dollars worth of insider purchases… millions worth.

A man can be happy with any woman so long as he does not lover her.

-Oscar Wilde

(Saw that one on iGoogle, and really liked it especially due to my situation over the past 2 months… sufice it to say, I am a very happy man )

I am not the sort to get pissed at what I could of made today. (Could have made over double what I did make if I kept the short on today.) But I do not think that way, I would rather be disciplined. What I thought would happened, happened, and after 2pm was a fingers crossed trade in either direction. (Do not like playing the ‘finger crossed’ trade, and since I do not have access to my real time quotes to have had a better feel with market psychology, there was no way I would have taken the chance.)

I did not think the Fed minutes were that bad, I mean they specifically stated they will do what is needed and step in. (But I think the street was more annoyed by the info in it, regarding how badly they are judging the current economic situation.) Seeing how the markets reacted today, the players really want a rate cut, and if the Fed does not give it I see a horrible Sept and Oct.

The charts, after today are not pretty. Supports were broken, and negativity is back into full swing. I hate to say this, but a new low maybe in the cards… aka market is saying recession.

The key here is the DMI… a clear negative trend. And the Stoch is saying more downside. I will not be surprised to see the horizontal support be tested… around 2460 for the Naz and 1410 for the SP in the near term.

But if the Fed cuts, this goes out the window.

I know I stated I do not think the Fed will cut this go around, but I am a fan and believer of markets being correct (most of the time despite its moments of inefficiencies). The market, both bond and stock, is shouting to the Fed to cut (it is no longer about financials), and since the markets are the predictive tool, I think the Fed needs to cut… asap.

As for inflation, I do not think that will be a concern because if we are in recession, we will find ourselves in a deflationary situation.

It was a nice trade.  The market is still somewhat overbought, but wanted to cover before the Fed Minutes.

I am still not expecting a cut this go around, but the minutes maybe interpreted as a cut is coming and rally the markets. (So I wanted to take my profits from the trade.)

Why a cut is not coming… the Fed is busy working with banks to straighten this mess out. As evidence by the ease in regulation letters via Citi and BofA posted on the Fed’s site.  I think the Fed is doing everything they can not to cut rates, and make the banks absorb the hit on this one. (That is why I think during earnigns time via the banks there will be a asset and earnings re-valuation.)  Inflation is controlled, but not controlled enough for a rate cut. And if the fed cares about inflation, as they pointed out in every single meeting/minutes, they will not cut.