understanding the psychology of behavior

Some analysts have come out and stated that NYX would see lower volumes due to the bear market.  As such, NYX was downgraded.

Well, to those analysts, they were simply wrong.  On 01/23/08 NYX saw its greatest volume day on record. On 01/22/08, NYX saw its 3rd highest volume.

See the trend?

As the volatility remains high, so will volumes.  Lets not forget the synergies now present with the Amex purchase.  Even in a down market, there is too much wind on NYX’s back to ignore.

The bank is blaming one trader (a 30yr old… basically a kid in the investment world) for losing $7B?!?!

Are they kidding?  Is the bank completely inept, stupid or just negligent?

Where was the bank’s risk managers? Where was the bank’s compliance managers? Where was the bank’s oversight group forcing the unwinding of the trade after it exceeded the trader’s limit?  Why were the banks procedures not set up to prevent such a sophisticated scheme (so they say)?

If I were a client of Societe Generale I would be looking for a new bank.  Think of it this way… a 30yr old kid out smarted a bank, and cost them $7B!!!!!

The bank looks like a fool.

I am doing nothing. Made my moves yesterday, and I am simply waiting. 

I am simply sick of seeing all the down days, and the bullshit pundits say yesterday was a bullshit down day. Especially since the market has been down almost everyday for the past 3 weeks.

I am sick of the fear (and I was calling this decline BEFORE the pundits), and I am sure other Market bears are too. Valuations are too interesting to ignore, and the pros will notice this too, even with reduced earnings via recession.

Is it time for a Global Fed?

Or at the very least a loose collaboration of National Governing Bank heads to act in sync to faciliate global prosperity?

We have briefly seen such action with the Credit Facility Auctions, which was a great and innovative idea by the Fed.  Should this collaborative effort become the norm, or will the global economy force this collaboration and make it the norm?

A lot of chatter from CNBC stating the current deline is a joke, especially from the rough-edged Joe something or another. Frankly it annoys me when I hear a 20% cut in the market is meaningless.

From the recent market high, the SP500 is off about 20% (if future lows are included), but about 18% down in highs and lows from open market movement. THAT IS 20% in 2-3 monts. Excuse me, Joe, not a small number.

In 1987, from highs to lows, the market saw about a 36% decline in about a month period. That is a tough pill to swallow, but conditions surrounding that decline is not the same as today.

In 1987 equity prices were very overvalued, today they are not. In 1987 program trading was still at its forefront facilitating the decline, today everyone and their mother does it and understands it pretty well.

So… we currently seeing people poop-poop minor declines in todays market. Well, as per the conditions of today verse 1987, today’s market is taking some pretty hard punches.  Except we are getting our ass kicked with jabs verse a huge sucker punch.
We are down about 20%… 20%.

Market craps all over AAPL.  Is Mr. Market serious?  Apple beat expectations via Rev and Earnings, and yet it goes as low at 136 in after hours.

What Mr Market said to Apple, “Report your best quarter in history, and we will take you down 15-20 points.”

This is not a WTF moment… this is a complete deterioration of investor psychology, where fear trumps valuations and common sense.  This is what happens when a Fed cut happens after a market fall, instead of before one.

Bernanke just learned a lesson or at the very least reinforced a lesson… act quickly, timing matters.

Everyone and their mother is now scared.  There is so much fucken blood.

I know the volatility is crazy today (hence my liking of NYX), but here is a nice SP500 chart.  If the markets continue as is, or trend upward at the close… we got capitulation in extremely oversold territory today.

Unloaded FXY for now.  As it has been trading in relation to the market it acted as a pseudo hedge, but I wanted to free up more cash to acquire long positions incase of a further decline or to trade.

Its also not acting as strongly as I thought today.  May indicate dollar strength with this rate cut.  Not sure yet what to really make of it.

Got NYX stock around 67. Still not in margin and have powder, so I am still flexable. 

His Suck-O-Meter goes away. Lowered 75 basis points.  Will probably lower 25 on Jan 30th. Further easing the credit markets.