This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here Longing for State Street

You Were Warned About State Street

We put up a post yesterday afternoon that focused on the chaotic drop we were witnessing in shares of State Street (STT - Get Report).

In that post, we warned investors that were thinking about chasing the move down on the short side. I have seen those moves happen in my many years of being a trader. It was a classic "bear trap" that was being set up. Unfortunately, the "disappearing bids" hurt the long investors that were looking to get out when the first signs of the free-fall occurred. Here's the scenario:

Joe Trader needs to move a decent-sized block of shares upon getting a whiff of the rumors that were out there yesterday -- money market safety, exposure to Lehman, etc. Joe Trader calls up his broker to try and move a big block, and that's when the pain starts.

Instead of dumping all the shares on the first drop from $66 to $60, the Joe Trader peels off some, thinking he doesn't want to sell at the bottom. He stays on the line with a constant ebb and flow of "Where's the bid now?" His palms start to sweat, thinking it's only a State Street issue. He then starts peeling off the rest of his shares at any price he can get, $55, $50, $45, $40, $35, and yes even down to $30.

What Joe Trader may failed to realize is that Northern Trust (NTRS - Get Report), Bank of New York Mellon (BK - Get Report), and Federated Investors (FII - Get Report) were also getting tagged at the same time. This is the type of trade that makes people quit the business, as the result completely decimates the investor and his confidence in the markets.
1 of 5

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AIG $57.19 0.00%
BK $39.17 0.00%
FII $28.73 0.00%
NTRS $67.39 0.00%
STT $67.12 0.00%


Chart of I:DJI
DOW 16,472.37 +200.36 1.23%
S&P 500 1,951.36 +27.54 1.43%
NASDAQ 4,707.7750 +80.6910 1.74%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs