Crash Market Stocks - Financial Tips On Making Money In The Stock Market

After two days straight of down trading (three for the S&P), markets ended in the green today, having the Dow close up 46 points. The small rally comes with no surprise as some short covering was sure to be happening after two rather strong days of selling. Yesterday, I had a strong debate with myself whether or not to take some profits off the table in case of some short covering. Looking back, I probably should have, but hopefully I'll catch the next bus. I don't expect any huge buying volume anytime soon, and I still am enjoying 20-30% profits from my entry point. So, I would like to see the week end in the red, but in this market, you never know.

It is still looking like GM will be forced to enter into bankruptcy, and is looking to do so in the same manner that Chrysler did so. The company has a June 1st deadline to be able to get their debts in order, which would take a miracle if they were able to do so. Even though many are now expecting the bankruptcy, I don't think the consequences have fully been factored into the market. We saw what kind of influence the Chrysler bankruptcy had on the initial jobless claims report today, which came in worse than expected at 637,000. GM is a much larger company and as a result, should impact the overall economy much more significantly. Remember, it doesn't just effect employment. Think of all the dealerships that will be closed that they will be able to get out of their lease through bankruptcy. This should kill thousands of landlords around the world. Yet another bullet heading straight for commercial real estate. In today's premium podcast (subscribe here), I really outline some serious problems heading towards commercial real estate and why I am bullish in SRS and other funds.

PPI came in right in line with expectations. Like I said yesterday, such data does not necessarily suggest that deflation is no longer an issue. There are several indicators which measure deflation, one of which is CPI which is announced tomorrow. Look for CPI to set the mood for investing tomorrow. I would expect to not see much of a variance from last month's number, but we may be surprised.

More and more problems are creeping to the surface. One big problem about this economic crisis is that it is a global economic crisis. We are in uncharted territory in experiencing a massive, global recession in which almost all major economies are suffering severely. As a result, all governments are engaging in their own stimulus plans and is closing doors to a lot of imports, as they hope to keep manufacturing businesses within their country's borders. This is a plague for countries like China, Mexico, and Brazil, whose economies rely so strongly on major markets. Instead of looking to other nations to help stimulate our own economy, we and many other nations are forced to keep printing money and go more and more into debt.

Despite the rebound in financials, there still remains much concern for the future of banks. There has been so much focus on many of the "big banks", that many have thrown aside the thousands of regional banks that exist across the nation. These are the bread and butter of the financial systems. Even though their debt may seem insignificant compared to that of big banks, as a whole, they act as much of the equity providers for local real estate markets. Many of these banks will not find a TARP fund or bailout plan for them and will most likely have to go under. It is important to consider this when investing in financials.

I went in and bought some SRS call options for June today, as I wanted to take advantage of the down day. REITs received a lot of love today, who knows why, which I was kind of happy to see, considering that I had not positioned myself in SRS for quite some time now. I am hoping for a strong week from SRS this next week, as clearly commercial real estate is more and more coming into the spotlight.

Tomorrow I will be looking for the CPI numbers as well as the earnings data to set the tone. If we see yet another up day in stocks, I will most likely go in and buy up some more short as I feel that we are at the crest of the rally. I still see some great opportunity on the short side in the near term and look forward to some strong profits in my Zecco.com account. Happy Trading.