I haven’t been following many individual stocks lately (just (LYG: 3.87 +6.32%)) and for the general market direction, I’m still using my favorite daily and weekly charts. — Will post charts during the week.

This year I took ’sell/don’t buy in May and go away’ to heart.

Nothing interesting has happened with money flow in relation to market prices (NYSE Dollar Volume and Average Closing Prices).

My only source of information, or rather review and analysis, has been Gary Savage. In short, his opinion is that we’ve hit or are scraping an intermediate cycle bottom. This should give a good boost to the bull market. — Already happened.

I also diligently read Le Duc.

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As for the retail investor sentiment, it shifted far towards the bearish side, very fast.

That’s another contrary indicator.

I don’t want to be short here.

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In short – handling money (compared with handling paper) reduces stress from loneliness, as well as physical pain from hot water. Somehow it makes a lot of sense, but also seems crazy.

The threshold must be different for everyone, but as the saying goes “everyone has a price”.

In ‘The symbolic power of money: reminders of money alter social distress and physical pain’ published in the journal Psychological Science, Xinyue Zhou, Kathleen Vohs and Roy Baumeister explored how money could reduce a person’s feeling of pain and also negate their need for social popularity.

Harriet de Wit, Faculty Member for f1000 Medicine, said: “This research extends our understanding of relationships between social pain and physical pain, and remarkably, shows how acquired symbolic value of money, perhaps because of associations with power or control, can influence responses to both emotional and physical pain.”

She also noted: “These findings have great importance for a social system such as ours that is characterized by wide disparities in financial wellbeing.”

Zhou, Vohs and Baumeister determined that interpersonal rejection and physical pain caused desire for money to increase. They said: “Money can possibly substitute for social acceptance in conferring the ability to obtain benefits from the social system. Moreover, past work has suggested that responses to physical pain and social distress share common underlying mechanisms.”

“Handling money (compared with handling paper) reduced distress over social exclusion and diminished the physical pain of immersion in hot water. Being reminded of having spent money, however, intensified both social distress and physical pain,” the authors said.

More information: The full text of the evaluation of “The Symbolic Power of Money: Reminders of Money Alter Social Distress and Physical Pain” is available free for 90 days at http://www.f1000medicine.com/article/r2111rwty080l4q/id/1163818 DOI: 10.1111/j.1467-9280.2009.02353.x

Source: Faculty of 1000: Biology and Medicine

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I don’t have any positions except long LYG at this time, therefore I’m not voting much with money. However, I’m going to be contrarian here and say that the market has almost bottomed.

Based on:

• Significant buying of indices and bellwether stocks on weakness over the past week. I admit that’s pretty anecdotal.
• Speaking of $SPX (S&P 500 index), there’s a positive price/oscillator divergence on the daily chart. Ok, that’s some technical analysis.
• $SPX closed at 34ema on the weekly, that’s a pretty strong support level. May dip a bit lower than that, but could be just intraday?

I do find it surprising that as of May 6th, there weren’t more bears. This is a hole in my contrarian case.

Speaking of TA, that’s another dent in my theory – still overbought on the weekly chart, regardless of the current price support.

Click to enlarge

My eternal sentiment

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(alphabetical order)
AAPL, BHP, BRK.A, CHL, GOOG, MSFT, PBR, PTR, WMT, XOM

Infotainment.

Source: GOOD

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It took some severe beating this week, but curiously recovered all of today’s loss in afterhours.

Oversold on the daily.

Still overbought on the weekly.

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Clearly, SPX is now at support. Even if this is not the bottom, it’s not that far off. 1,108 on SPX would be severely oversold and a good buy. That number is the 34ema on a weekly chart.

Yep, not even talking about the macro “news” events. Downgrades and such are not the reason for the sell-off (in my very humble ohpihnion). The market was overbought and many are using this opportunity to unload. Was it news to anyone that Southern Europe is in trouble? No.

A little upset at myself for pulling the trigger on LYG way too early. I thought there was a 50/50 chance it would either break out on some good news or correct with the rest of the market. I knowingly took a chance. The news was indeed good – they’re back to being profitable (!) already, about a year ahead of schedule.

And a bit of a diversion.
“Did you know…”

Zofka, “Pearlsong”

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4/26/2010 Interim Management Statement
5/6/2010 Annual General Meeting – 6:00AM EDT

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