understanding the psychology of behavior

GE - Due to economic activity, 26 may not be broken upward anytime soon, but it may linger there (around 24-26), as the credit markets ease.
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GOOG - May see around 375, and pending the market move from the easing credit market, around 410 is a possability.

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GS - Seems like 140 is a possability, but unlikely. 120 or so seems more reasonable.

JPM - A price level from 46 to 50 may be seen.

MA - The low 170s (around 174) seems to be a top line resistence during this credit market crunch equity decline. Because 174 was a resistance during a time of abnormal markets, it may trade higher, maybe the 20 daily SMA (high 170s/low 180) or the 5 wkly SMA.

PBR - May trade in the band of 25-35 for the time being.

The names I purchased today I will not sell until credit market conditions return to normal, allowing for equity market condition to trade on fundamentals.

The stocks I purchased are severely discounted, with the exception of maybe JPM.

I will post charts, indicating trading ranges for the stocks I purchased, and will trade aroud these ranges.

The fundamentalist in me will refuse to sell at these prices. 

The only fustration I have getting my orders filled are the brokers going too slow for me.  There appears to be technical difficulties with the online brokers.

But I started buying… annoyed in that I do not know if my JPM order got filled, and I am watching it rocket!

If the Treasury provides capital to banks vs. going after the derivatives I would NOT want to be short MS and GS.

IMO, the short play on the financials is over. The Fed sees the problem, and will attack the problem.

The Treasury may take a dilutive equity position, but not one that would bring the stock crashing down.  IMO, it will give it a boost from the current levels.

This is one of the reasons I am leaning toward GS common at or below 100. I do not think 85 will be broked downward during this downleg.

PS… Thanks Tom for pointing out the Put action.  I may sell a (just one) Oct 90 GS Put, and pending the trading action, take common stock if I do not think the put will get exercised. (It is a small position because I still do not trust this market.)

I started to add common on MA (initial position at the 150 level).  I placed limit orders for PBR around 25, and JPM around 36. And I have plenty of GE (waiting for after earnings to add)

Too inexpensive to ignore. The market is now at a severe discount due to the troubles in the credit market.  Stocks have value, the market players are ignoring this value.

Playing common because I do not want to deal with time decay, as I do not know when the credit markets will start to act normal (which will have an immediate effect on stock prices, pushing them upward).

PS… with the Fed Commercial Loan help, there should now be no question to GE’s insolvency… there is no threat now.

This is crazy.  That is all I can really say.  There is no normalcy to the credit market so the only direction of the stock market is down.

I usually short the hell of the markets when the time is right (as I was actively shorting the SPY through out the last 10 months), but being short at the current level is just too risky. Valuations do not merit such a play here.

IMO, any money manager stating things are overvalued is talking out of their ass, and simply playing the trend/momentum.

All we can do is wait for the credit markets to start functioning again, then the market can be traded on the merits of the economy (and not on the merits of a bruised system). 

In the mean time, the market is going down quicker than a $5 whore. (Sorry for the crudeness, but I need to make myself laugh and hope others laughed at it too )

Where to even begin… A 10yr chart to GE reveals the company has seen the $20 level only three other times in previous cycles, and each time quickly bouncing from it.

In the late 90s, GE just touched 20 and quickly bounced:

In the previous bear market from 2002, GE quickly bounced from 19 twice:

Currently GE is at a situation where a quick breach of 20 will most likely take place again…

GE Capital is a drag on earnings at the moment, and if/when credit markets ease up, the cost of borrowning will reduce and benefit GE. The industrial side may see a slow down due to the global slow down, but still, GE is very attractive here. It is a cheap stock, and as good as it gets with respect to a strong company, that is yielding +5% as you wait for things to improve.

Thanks to the Ag names getting crushed yesterday, a lot of chatter about commodities bubble bursting is going around. Even Cramer equated Commodity names to the previous Tech bubble.  This suggestion is simply crap.

Commodity names are making a sick amount of money. Their cash flows are very real, and their estimates are reasonable due to the price of the commodities to which their products are pegged.

As the world economy slows, so will the consumption of these commodities, hence the underlining price will decline.  Will they decline quicker then they rose… I do not know. (I have not traded commodities, except oil, so I do not assume to know those markets.)

Oil on the other hand is a different beast all together.  With oil, we know we have reached a peak in global production, and despite the slow down the usage has not retracted as much as I thought it would.  When I shorted oil, my major tell was within the Emerging Market names, as well as most commodities collapsing except oil.  The reason it had resiliance in its collapse is because its fundamental supply issue is much better known then other commodities.  The only thing that will bring down oil below $80-85 a barrel is the use of alternative energies that will allow oil not to be used.

Entered positions in:

GE (Will add even more if 20 is broken downward.  This recent capital requirement was not needed, they did it to satisfy the market.)

PBR (Peak oil is real, and prices will stay high until alternatives slow the use of crude. Will add more around 37.)

PWR (Did anyone even bother to see the PTC was passed yesterday, and the alternative space has one common theme… upgraded Power Grid. But multiple compression is a bitch to deal with. Will add more if below 20 is observed.)

Still waiting for downgrades on MA, also BNI. Valuations look good, but downgrades should be coming as the global economy has slowed. (IMO, these downgrades will be lagging.)

After the ‘No’ vote the market began to show signs of a temporary bottom. The VIX to SP500 chart looks pretty interesting here…

I am not saying that the markets will go straight up here, but imo, the chart is telling me around this level maybe a low point for stocks. Everyone and there mother already knows the fundamentals to the American economy is currently weak, and todays accelerated market declines are reflecting that weakness.

I just keep thinking… What new negative information are we going to findout in the next few weeks that we do not already know or are anticipating?

Keep in mind, I DO think the credit freeze will have really negative implications over the next few months, but I think stocks are discounting this negativity. The biggest indicator here is how inexpensive certain stocks of strong companies getting.

IMO, to start accumulating high quality common stock is not a bad idea. Look at strong players, top tier, players. I am accumulating GE common. Strongly considering MA, but would like to wait for the downgrades to hit (similar to what happened to Apple today), JPM common (mostlikely after they report or when/if it sees high 30s), PWR (as a growth stock gets killed due to multiple compression, but the wind is soooo on its back) and PBR (as I am a believer in peak oil).

Apple got a series of downgrades today in an anticipation of the global slow down, so analysts are now factoring the consumer slow down into their numbers. The markets will overshoot this negativity, and that is the time to act. (Not saying to get into Apple, just using it as an example… I am waiting on Apple for now.)

I would not go heavy on options for a bounce here, but common stocks like GE I already started to accumulate.

(I am still a trader here, and will not hesitate to unload when/if things get overbought. The economy is not going to quickly get out of this economic mess, and I will not kid myself otherwise.)