understanding the psychology of behavior

ICE looks to want to make a push to 150.  There can be some resistance until 150, but the more I look at the chart the less meaningful any resistance looks, other than the 50 SMA (which is near 150).

Thanks to the snow storm that has blanketed NYC, Boston and the north eastern area I am stuck in Boston. (Too risky to drive about 200miles in this weather.)

This truly blows. Anyway… needed to vent that.

Some names that look interesting…

CIM looks interesting after its big decline.  A potential reason maybe due to the higher inflation numbers.  Investors maybe thinking twice as to whether or not the Fed will continue to cut rates.  The decline is pretty big, so letting the dust settle would not be a bad idea. Around 17 looks to be a good initial entry.

NYX - a potential bottom maybe in play here.  Observing its strength against this utterly crappy market makes me think so.  But this is just a passing thought, as NYX is fairly inexpensive.

Because I short the market via the SPY, I consistently see the inconsistent trading between the SPY vs the SP500.  Now I know they can never be perfectly correlated, but sometimes the relationship gets pretty out of hand.

For instance, today the SPY was off by some 0.80 points from the SP500.  That is a huge divergence.  Wonder why that is?

(I’m sure there is some quant fund taking advantage as I type, but I found it a bit strange and wanted to document that this big divergence is happening.)

MA has been looking interesting for a few days here, and with today’s decline, and holding of support, a call option trade may present itself.

It is sitting on multiple SMA supports, consolidated and seemingly ready for a pop. A pop to 210-215 can be anticipated.  The Fed should be cutting rates in March, but with the rise of inflation, some speculate it will not. (But notice inflation is not a US problem, it is global… China, France, UK… etc many nations are dealing with inflation due to Food and Energy.)

The play for the pop would be the April 200 Calls (the March can be played too, but time declay may get you if the pop does not happen sooner rather than later.)

It is an intense trade because the market can go either way right now, so if you do not have it in you, do not take it.

Noticed this article online today from the Guardian… BP Goes Back to Petroleum

This back to basics attitude of BP does not address the issue of Peak Oil… just keeps their head in the (oil) sand.

ICE had a far better move today then I thought it would see (but I did get a bit nervous in the AM ). I thought the move to the 20SMA would take a few days. Currently it is hitting support via the 20SMA, and still seeing negativity via the DMI.

Over the next few days ICE should go up, but the very very short term, its up in the air.  The Stoch is suggesting the upward move. (The easy money upward option move has been seen.) If it can break the current resistance around 145 should be seen.

(I wanted to post this sooner, but the blog is uploading extremely slow.)

Took some profits on the short trade, but still maintaining some exposure. The inflation data is not good. Nor is China’s inflation situation. (I need to read up on how they handled their pervious inflation spike, to see how they can potentially handle this one, while allowing their economy to continue to grow robustly.)

Also, I entered ICE 120 March Call options end of day yesterday, and am thinking of doubling down today. But I am letting things settle first.

Currently, Big Oil is having a hard time replenishing their reserves, and Wall Street is concerned. The concern is obvious, but playing devil’s advocate, does it matter?

The WSJ’s recent article on Exxon’s lack of new reserves states XOM will run out of oil in a generation. That is about 40 years or so.

The last, and most recent, big oil find is controlled by PBR. Where does this level the reset of the industry… other than crying that Peak Oil has arrived, and the easy life is slowing ending? IMO, Big Oil will be forced to reinvent themselves. They should not be viewed as Oil Companies, but instead, they need to view themselves as Energy companies, and attack all aspets of Energy.

That means a huge push into Alternative Energies. Specifically to what Oil is used for. By ignoring innovation, along with the lack of reserves, they are running down a dangerous course. Big Oil will fall victim to innovation the same way TV Networks lost out to the internet.

Car makers are in no position to stop innovating. They see how well hybrids are selling in a crappy market, and they will keep pushing. If Big Oil does not step up, and change with the times, arrogance will kill them.

Too many former hippies have too much money, and their money is forcing disruptive innovation in all aspects of life. Their is no more room for lobbiest and tax breaks.

A slogan that should be reinforced in every company should be… ‘innovate or die’. Ultimately that path has already started, but a generation is a good amount of time for Big Oil to get crack-a-lacking to redefine itself.

The US Governement should be concerned about this as well. As it threatens our way of life. (Unless politicians enjoyed the oil shocks of the 70s.) Legislation should be passed to force Big Oil to throw money at innovative technologies. For instance, give XOM a 50million tax credit only if they truly spent 50million toward alternative energy.

Wanted to post the current charts on WWAT.OB. The daily is indicating a bit of a consolidation is likely thanks to the Stoch. Maybe to the high 1.40s.

Although the 20SMA is currently acting as support, the general negativity within the DMI would suggest this support will not hold and more of a consolidation is coming. The dotted line seems like a reasonable support area.  On top of the dotten line (high 1.40s) being a horizontal support, the Weekly 50SMA reinforces the high 1.40s.

On a purely chart analysis, if seeking an entry, right now the chart is saying high 1.40s. Or at least half now, to be exposed unless WWAT has already experienced enough of a consolidation and continues upward from the 20SMA, and the other half in the high 1.40s.

(My apologies for the cheesy title, but I always think of it when I look at the VIX chart… and yes, I am that cheesy )

The VIX is up, while the market is up. Over the many times I have shorted the market, this has always been the one indicator that makes me add to or create a market short position.

On top of that, the VIX is oversold, consolidated and sitting on a support SMA. Very high likely hood, the VIX will increase, which means the markets will (more likely than not) go down.

As for the market. It looks to want to consolidate here, as enough juice is not present to have broken the initial resistance.

These conditions have made me close my market long, and add to my market short.