The psychology of Wall Street is the psychology the analysts do their best to ferret out.
Notice, for a minute, that no analysts came out and defended any particular stock yesterday morning except Alibaba (BABA) , where there were four price target bumps?
Alibaba, of course, is an easy price target bump. It had just reported. It isn't part of the FANG mob. It's not from here. It's a play on the rise of the Chinese middle class.
But our stocks? What was the reaction? A new kid on the block makes a splash with a Sunday downgrade of Action Alerts PLUS charity portfolio holding Apple (AAPL) that, while well-reasoned, is really and will always be known as a downgrade that came on a Sunday.
It was a statement downgrade from a new young analyst who had done a lot of work, and I like that. I also like that he disagreed with the cognoscenti on the Indian market and on the service revenue.
But he missed two things. The first is the brand love people still have for Apple -- always difficult for the analysts to figure out. That requires them to get out of their tech comfort zone and go into consumer products. The brand love will have Indian consumers demanding their own phone companies subsidize for Apple. It's a pretty universal precept.
And he didn't understand the ecosystem that can layer on devices and service revenues steams without much effort. In fact, like with Netflix (NFLX) and with Costco (COST) and with Amazon (AMZN) , I believe that if the Apple store wanted to take more from those who use Apple apps to get customers, the creators of the apps would have no choice but to say yes. It is that lucrative a business for them.
But away from the neophyte, nothing happened. The analysts stayed in their foxholes, content that there would only be one game plan: the sell game plan.
Now, I am not saying we are out of the woods. There are plenty of people who bought Adobe (ADBE) , say, in the face of some valuation downgrade by a small firm, that are up six and might want to take that one to the bank. There are others who are up so big on an Amazon from the $945 that they can't resist an up opening.
But there were no defenses of stocks like Salesforce.com (CRM) and Workday (WDAY) and Adobe and Autodesk (ADSK) and Western Digital (WDC) and Microsoft (MSFT) yesterday. I think if someone were to have come out yesterday and said anything positive about Nvidia (NVDA) , they would have feared a heat-seeking missile might be coming their way.
That's right; the force field shields were down all day.
Telling that there wasn't more damage.
So today's a new day, and I expect vigorous defenses as there really isn't anyone today who is going to run the risk of breaking the karma that worked so well for the bulls.
Analysts, out of their foxholes, can do a lot of damage to bears looking for new homes.
Let's see what happens.