understanding the psychology of behavior

ICE is looking pretty good here.  The stock has been beaten down, and all exchanges have experienced multiple contraction, despite their continued growth prospects, thanks to the market sell off.  Ironically the very market sell off is benefiting the exchanges, yet they still go down.

ICE reported very good numbers today beating the Streets expectations by 0.02, but w/compesation expenses was below 0.02. (I guess the Streets expectations takes into account compesation expenses when estimating as the stock fell today.)

ICE reported record breaking volumes in Jan. This simply indicating the next quarter go around should be pretty good, especially with the multiple contraction it has already seen.

Oh… and lets not forget NMX was recently offered $11B by CME.  This is also a reasonable buyout price for ICE as well, given their better operational performance, countering their somewhat lower revenue when compared to NMX.  An $11B buyout of ICE suggests ICE should be eventually bought out for no less than 158. A 20% premium from the current price of 131.

Now looks like a good time to enter, as it is sitting on a support it is retesting.  The support should hold due to the above fundamental reasoning given above, but the chart is pretty negative at the moment. So that merits an initial entry, and entering in stages if it goes lower.

I would play the common here (and I will after the publish the post), as the market is tough to understand for the time being, and the timing of a buyout is questionable.  Could be next month or over a year from now.

Closed out the NYX protection as I wanted to cover around 75.  NYX decline was exaggerated by the NDAQ miss.

of trading. Usually around 3:30 to 3:50 I would review most of my charts to position myself for the next day. But today I had very little time thanks to my job and schedule in Boston. A thorough review of my charts suggests the markets are overbought and time to short… for the short-term at least.

The SP500 failed to break out, despite the Fed cut today, while being in a over bought position.

Then there is the Dividend index that is in a similar position, but more so sitting on resistance and not a failed breach of resistance.

The DOG (Dow Short ETF) is sitting on support, looking as if it wants to bounce.

The SH look similar, but support is not as strong.

Judging by the after hours action, the markets may act weak tomorrow and this short play may seem obvious.

I am not going to try to think about what the Fed will do, and whether or not the market will go down. I will keep using my charts, and they still tell me to wait on the short.

A lot of charts are overbought in the short-term, but the Transportation Index could see the 200SMA again, breaking from the 50SMA resistance.

Whatever the case may be, I will swallow my previous call.  I did take on NYX Puts for protection due to a very short-term consolidation that may be seen w/in the name.  I am still overly long the name however, and will stay majority long through earnings.

The Street is kidding itself to think the Fed will cut by 50 basis points.  A 25 basis point is more likely.

If we rally today, I will mostlikely short the SPY due to the Street’s false expectations. I will use the April 142 SPY Puts. (Not a big position, more or less enough to protect my portfolio.)

MA looks pretty negative here. The stock has moved below its SMAs, while being overbought and a general sense of negativity via the CCI.

I know I have been bullish on MA, and on a company and industry trend basis I still really like it. But in relation to its stock, MA maybe overvalued for this earnings go around. Irrespective of the fundamental back drop, the chart does not look good. 175 or even 160 maybe seen again.

If shorting becareful as it will report earnings soon, and that can act as a catalyst up/down.

The merger between NMX and CME makes good sense, simply because CME already handles NMX product via CME Globex platform. The purchase for CME is a good one as it will use an already established platform to take out a lot of NMX’s floor trading expenses.

So, how does this all relate to NYX… cause for the moment, that is what I care about. Well, its good because we know NYX will not enter a complicated earnings dilutive purchase. But NYX is now backed into a corner. NYX needs to buy ICE to compete on the commodities front. NYX already has a position in Europe, thanks to EuroNext, but in the US, NYX is lacking. A purchase of ICE would take care of that hole in its biz.

The NYX/ICE merger would be interesting because NYX would buy an exchange that has a talent for taking market share, and extremely cost contained. Some analyst believe the deal would be immediately accretive to earnings.

I would like to see the deal get done, but when is the real question.

There are a lot of potentially market moving data coming out this week, the most important being the Fed Cut/Statement.

Excluding the data that can act as a catalyst up or down, the charts are suggesting a consolidation here. (This does not mean it has to go down, but given the market psychology at the moment… mostlikely.)

The dividend and transportation index are in near-term overbought conditions hitting resistance points.

I have not taken on any market shorts for the moment, as I still think equity prices are undervalued and a potential rate cut this week. I recognize the dangers of having the credit market freeze, especially to the investment banks, but with the Fed easing and global liquidity infusions, the credit markets should start ticking again.

Even with the credit markets ticking again, I am not expecting a bull market either. The state of the US consumer merits real worry, along with overall corporate profit growth. So far profits have held up, and if they do, I think the overall markets will be trading sideways until the credit market perk up.

I will start shorting the market again when the SPY sees 140. I will be averaging up, as I do not expect a breach from the overall negative trend to occur just yet.

The UN calls water a top priority. Third world countries are having a tough time dealing with a lack of clean water, mostly because the infrastructure and irrigation abilities are not there. Turns out Worldwater and Solar (WWAT.OB) has a product that can truly help the countries that need water. The system is called Mobile MaxPure (read about it via the link). Recently 12 of these units were sent to Iraq to facilitate delivering clean water to areas that need it.   Basically the very product the UN is looking for to help these third world countries.

If the UN is serious about water, as the status of water is considered the ‘new oil’, products like MaxPure are truly important to help the UN develop a realistic solution to their new priority.

Just an FYI… sold some GS into the close to perserve and free up capital.