understanding the psychology of behavior

Ag and Gold look to be consolidating. Listening to CNBC there is obviously a bull run in this group, but it was recently breached.

DBA:

GLD:

Looks like the names will be trading sideways for now, as there appears to be a negativity with an overbought condition. Hence on the very short-term things look to be going down for the group… although Gold does have room to move up before down.

(FYI… this is purely based on TA. I have not done any real fundi analysis on the Ag group regarding long-term trends, and the long-term trend on GLD I understand as per inflation protection.)

Here are updated market charts… the SP500 and the SPY…

The consolidation with the easing of the overbought condition took place. The apparent breakdown in the VIX, along with the consolidation, tells me there maybe short-term upside in the markets.

But on that note, I am not overly bullish as there are still conflicting indications (or at least things that make me uneasy as they make things look fuzzy).  If the VIX is able to get oversold, via the CCI, and approach the 200SMA I wll close the SPY calls.

Covered the Market short, and went long 130 May calls on the SPY. Some charts are fuzzy at the moment, but there is a breakdown in the VIX at current support, and I am of the opinion there is to be an orderly consolidation. (Which took place… as of now.  A surprise catalyst to the down side is always possible.)

I will post charts later if I have time, but I may not until Sunday.

Program Trading Data was out yesterday around 1:30pm from March 17-20.  NYX saw 4.05Billion shares a day.  About 40.1% of program trade took place for that week on NYSE.

Am I the only one that thinks this is good?  Considering the stock fell by over a point yesterday, I would think so.  But it is looking good today… so far.

(Make no mistake, NYX is still a show me story. I really like the volume numbers. Since January they have been doing well, but those synergy cost savings MUST be achieved asap to simmer The Street down on NYX.)

Trying to always be one step a head, I believe the market consolidation will end near 1320.  So if the SPY puts were taken on, as I posted before the deline, look to cover them around 132.0 of the SPY. (Or sooner to capture the gain.)

Of course this assumes this consolidation will be orderly, and as of now, all indicators are pointing to such a consolidation.

There appears to be an orderly market consolidation occurring.  Seems as if the latest moves by the Fed are working for now and adding less volatility in the markets.

Some of the moves I am thinking about today are…

1. Sell April 25 AGO calls after their presentation today. If AGO keeps pushing up (and hopefully sees their top end resistance (26) I will do this. (Maybe even take on some Puts as well.

2. If the markets do decide to pop up, I hope they take MA with it. I placed a limit order on the April 220 MA Puts. If it gets executed, good… if not, oh well. (Pretty much looking to short MA if it reaches around 228 again, but will cover if it goes back down to around 220.) This is kinda a day trade, so becareful with it.

Ralph DellaCamera sends an open letter opposing the NYX merger/buyout.  He states…

“There are a number of aspects of this deal that are deeply troubling, including the fact that the offer ascribes no value to AMEX’s 20% stake in the OCC, that the merger consideration paid to Members is uncertain in terms of value and timing and that American Stock Exchange CEO Neil Wolkoff will receive a windfall payment of millions of dollars for this flawed transaction.”

First of all, NYX is basically paying for the OCC stake. AMEX has no value as a stand alone entity outside of this stake for NYX.  Merged with NYX, synergies can be accomplished due to the ETF biz, hence NYX is the best suited buyer. BUT MAKE NO MISTAKE, AMEX as a stand-alone is not worth much.

As far as what the CEO will get paid from the deal, I have not seen any hard numbers, nor has Ralph provided any.

The only value at AMEX is the real-estate, which is being paid for separately, and the OCC.

AMEX holders will also be getting cheap NYX shares… as the synergies are realized from this deal, they will be rewarded very well.

So my open letter to AMEX holders… stop trying to be greedy, AMEX simply does not have the assets to demand such a thing, and stop crying.

I found this article interesting. The more I see these type of water investments, the more I will post them. If you think water is the next ‘clear gold’, then a good play on water is the PHO… water ETF.

article

Overall I do see a potential bullishness allowing the SP500 to see around 1370, however I also see short-term stresses underlining that bullishness… especially within the transports.

On a pure chart analysis via the transports, a break out has occurred. But the move is taking place as the index is overbought, and individual stocks are selling at a premium. So I am very hard pressed to believe it will surpass the 90 resistance.

Also, the IGW appears to be breaking or at least bottoming, but again, the macro picture does not support any sustainable rally. Hence the IGW should, at best, be range bound for a few months.

I already took out short positions yesterday, during the intra-day (noon time) push on the SPY. I will most likely add to that position if the SP500 sees 1360.  Because we have the uncertainty regarding the consumer, I am expecting the market to be range bound until the economic picture becomes more certain.

I hate being greedy, and the ‘easy money’ move to the down side has occurred, so I took my profits. I thought it would take a few days, but sometime it only takes a few hours.

It is still overbought to go long, and could still trace downward.

FYI… I have been using the term ‘easy money’ a lot. I guess I am just referring to the fact that when I take a trade on, at what I think to be the very top or the very bottom, that initial move (which in my eyes appears to be an almost certainty) is ‘easy money’. By no means do I think trading is ever ‘easy money’… this stuff is hard, and I take pride in over coming the difficulties.