Is CNBC the Great Satan of the Markets?

I like that title.

Why do I like it?

SatanIt’s very search friendly. “Satan” is one of the most often searched words. All sort of deviants and miscreants use search engines, when all they really need to do is to look into their souls.

It’s the devil within that we should all fear.

Don’t get me wrong. I love CNBC. I watch it about 10 hours each day. Although I don’t really watch it, it is more a background noise that occasionally gets me to look up while I’m doing other things.

I also included references about Joe Kernan and Herb Greenberg in the Acknowledgment section of my book, so obviously I do have a softspot for them.

But ever since I’ve been on Twitter, it’s really clear that there’s not a lot of love for CNBC, at least not by the people that I follow, and I try not to follow crackpots.

Even though I am a loyal CNBC viewer, personally, I still miss Ted David and I long for his return. But I also still pine for the return of Green Acres and as my therapist tells me, “That ain’t gonna happen”. (He’s not Ivy League)

But as much as I do pat myself on the back for being a good observer of quiet patterns, I can’t believe that I’ve missed this one.

And it was so obvious.

CNBC moves the markets. It is the six headed beast.

Now that’s not exactly an earthshaking observation. It’s on the order of Charlie Gasparino predicting that Lloyd Blankfein would depart Goldman Sachs within 2 years.

But it all crystallized for me this past Friday, the day the confusing news about Yahoo! came out.

What exactly was going on between the boards of AliBaba and Yahoo!, and Jerry Yang is still somewhat murky, but there was an obvious impact on the stock price of Yahoo!.

If you were long, that impact wasn’t very good.

At about noon, CNBC started its story on Yahoo and while the story was progressing, Yahoo! shares, which had stabilized at about $16.05 started to drop. They went down to $15.93 in the minute or so after the report.

But that’s when the observational part of my brain started kicking in. I saw what I had subconsciously seen so many times before, as I vacantly stared at the ticker.

Within about 30 minutes, Yahoo!, in the absence of any further news, started an impressive climb upward. What made it even more impressive is that it occured during the rest of the market’s decision to head south.

I took the opportunity to sell puts June 2011 Yahoo $16 puts when the underlying price was $16.

I rarely sell puts, but it clicked. This was one of those times. In the past I had sold puts on Citigroup, Sirius-XM and YRCW, all with good results. But all of those were in the $1-2 range.

What clicked was the realization that when CNBC talks, wait 30 minutes and go contrarian.

That’s not quite as catchy as the old E.F. Hutton ad campaign, but it may be much more accurate.

Years ago, when I used to watch Jim Cramer’s show, it was obvious to anyone that had bloodflow that his words would move stocks in the afterhours. This happened despite his admonishments to viewers not to make purchases in what he called the “Wild, Wild West”.

Back then, if he ever mentioned a stock that I owned in a positive sense, I always made certain to sell it in the after market, knowing that in all likelihood I would get top dollar and a chance to buy the shares back the next day at a lower price.

That’s definitely not meant to be a knock on Cramer. It’s a knock on the human traits of greed and fear, although it’s fine if other people act on those traits.

In fact, its fear that makes many people behave. Fear of ending up in Satan’s domain.

But in the markets, fear often makes people do the wrong thing.

They’re afraid of missing out when they hear good news, so they buy.

They’re afraid of being the last one left at the table when the bill comes, so they sell.

Those behaviors are good for the ones on the other side of the transaction.

Me? I have no fear, for I walk in the Valley of CNBC.