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

It seems as if our market is developing a bit of a pattern, “Freaky Friday” and “The Monday Blues”. It’s as if people actually go out around town and see exactly what is going on in our economy over the weekend and come into Monday with low expectations. Then during the week, the market places a trance over them into thinking that everything is just fine. I mean come on, we just had one of the biggest frauds pulled off in US history on Friday, and the market didn’t even blink twice. Sooner or later, all of this bad news needs to be factored in.

There wasn’t much of a fight today, like we saw all last week. It pretty much stayed in the red all day. It didn’t help that Bush warned auto makers that a bailout was not a sure thing. Only that it is to be considered. Plus, President Bush has bigger things to worry about, like getting hit in the face by Iraqi shoes (watch the video if you haven’t seen it, it’s hilarious). Either way, a passed bailout may cause for a short term rally, but should have no lasting effect on our dying economy. There is a lot to look out for this week that could cause some serious momentum in either direction. We’re getting close to the end of the year, and we’re hearing of more problems day after day.

On the bright side, look at Gold! Like I’ve been saying, I love GDX. Even with the down day it has the wherewithal to be up close to 6%, hitting over the $30 mark. If you scroll back to the post when I was buying it, it was at $19. With the government continually printing new money to bail out every Tom, Dick, and Harry, we should continue to see gold’s value go up and up.

OPEC is meeting this week to discuss a possible supply cut. I think there is a good possibility of the dissolution of OPEC, with growing demand problems. Soon, it will be a blame game of who should be cutting supply more, Saudis? Russians? Iranians?. In turn, the countries may choose to go their separate ways during this financial turmoil. At any rate, they don’t like oil being under $50 a barrel, so I am guessing something will be done with them. Keep your eye on DIG.

Well, we’re slowly but surely hacking our way back up with the inverse etfs. SKF and FXP both performed strong as there were doubts with financials thanks to the Madoff scheme. China continues to struggle as doubts loom over investors. With worries of government instability as well as the possibility of riots, what recently was labeled the savior economy, China, is looking to be a sinking ship.

The Fed begins their meeting tomorrow to discuss the possibility of a rate cut. Like I said in last weeks post, don’t be surprised to see a disappointing number come out of that meeting. The market would like to see a 50 basis point cut to the rate. However, I feel that The Fed will show the US that they cannot expect aggressive rate cuts every meeting, even in our current financial fragility. Sure, it may cause some drama in Wall Street, but hopefully will show investors that every meeting does not mean another 50 basis point hack to the discount rate. The Fed has also given hints to maybe not expect a big cut this time. It’s kind of like taking morphine. Sure, it dulls the pain for a bit, but later we’ll wake up with a bigger headache and worse pain then when we started.

Some key earnings this week are Best Buy and Goldman Sachs tomorrow. I would expect Best Buy to have pretty bad numbers, since I don’t see them that far off from Circuit City. I would also expect Goldman to have less than par numbers after the JPMorgan announcement last week. GS is before market, and Best Buy should be during the day sometime. Watch financials go tomorrow. If the numbers are indeed bad, we could see a 20% run in SKF, providing a solid day for the shorts. This could set the mood for the rest of the week.

Morgan Stanley, reports the following day, and I would expect them to follow suit. I can’t see them being any stronger than GS. If for some reason positive news comes out of the big Investment Bankers, than watch the market run. We have seen the potential for some upswing during December, and positive IB news could give some fuel to the bull. I don’t expect it, however, never rule it out.

The bear is growing hungrier by the day and I believe soon we will have some serious red days in our near future. These inverse etfs are still at really low levels and I would be extremely happy to just be buying into them now. If you don’t have a trading account, you can open one and get free monthly trades at Zecco.com.

SRS (up 5.77%) is still my favorite as we saw the extreme loan problem in real estate during 60 Minutes last night (what I have been saying the past 6 months). Depending on GS news tomorrow, it could be a slaughter. Either way, expect a big push either up or down. Let’s make some money, Happy Trading and we’ll see you tomorrow.

What a day. I felt like I was riding a never ending roller coaster. Investors had no idea how to "day-trade" in today's market as digestion of all the new economic and auto bailout news was a bit difficult. Then to top off the day, we have the Madoff hedge fund scam that should cause some noise next week.

As expected, pre-market trading was very negative, in response to the rejection of the auto bailout last night with The Senate as well as the Madoff scheme. The Dow dipped as low as 220 points today, but quickly gained strength as President Bush announced the possibility of utilizing a portion of the "Tarp Money" to assist in preserving the autos. As I discussed yesterday, I did not see a very likely chance that they would completely abandon the auto makers.

We then received the retail report, which once again brought down the market. Retail sales came in down 1.8%, which actually was lower than market expectations, but it also has been the longest stretch of negative sales (beginning in July) since the Commerce Department began tracking the number in 1992. Many people believe the reason for this semi-optimistic number, is that more people did ALL of their holiday shopping during the Black Friday weekend, instead of spreading it out over December, as it has been in prior years. I don't know about you, but lately, the traffic in the shopping malls near me have been pretty modest.

Another positive that bumped the market a bit, was University of Michigan's consumer sentiment report came back more positive than the previous month, rising to 59.1 from 55.3. Much of this was contributed to the incredible drop in gas prices, as most people are getting anywhere from $50-200 extra a month now. However, studies show that people are not spending this money (either being saved, or paying bills). So in turn, that doesn't do much for our monetary supply chain. At any rate, they don't call the end of the year "The Bull Season" for nothing. People are a bit more positive during this season.

In the end, we did see the "end of the week rally" prevail as I believe that makes it 8 weeks in a row we have seen a rally on a Friday. I am still hearing from analysts on the news that, because of the ability to stay positive in the midst of persisting negative news, that means we're at the bottom. Hilarious. We are ankle deep in this current economic crisis, that has a very long winter ahead of it. And what happened today with the Ponzi scheme is a preview of what we can expect in coming months.

Today, Bernard Madoff, the well respected Wall Street guru who managed a billion dollar fund, and who was the Chairman of the Nasdaq Stock Market in the 90's, was arrested due to frauding investors of what could be more than $50 billion in what authorities are calling a "ponzi scheme." Madoff was able to fool investors into thinking their fund was producing great returns, when in fact their money was being sent to what Madoff called, "money heaven." This gives more weight to the phrase, "if it seems to good to be true, it probably is." Even though, the market seemed to plow right through this, this is a big divot in our recovery. This directly affects investor sentiment. After this story being in the headlines all weekend, many investors will question their hedge fund's integrity. If it wasn't difficult enough for hedge funds to gain confidence from investors to keep their money with them, now they have one more big obstacle they need to clear. Having been looked right over today in the "Friday Rally", I believe we will see this scheme factored in next week, as people will realize how big of a deal this really is.

We've got a lot of action in next week's trading. Not only do we have the Fed's meeting to discuss another rate cut, we also have Morgan Stanley's and Goldman Sach's earning announcement which should cause some momentum (either bad or good) for financials. I plan on selling my UYG options before than, as I do not expect good numbers, due to the disappointing announcement from JPMorgan yesterday. SKF and Faz could receive strong bumps, if those earnings are indeed disappointing. Also, there is still a consideration that the tarp money could not get allocated to the automobiles. Although, I still feel it is unlikely, it is possible. There is a lot of opposition to the bailout and it is still a crucial element to moving this market.

Going into the holiday season, volume should continue to get lower and lower, which makes it more vulnerable to volatility. It should be another crazy up and down week as we end the year. I still think we should continue to get gains from the shorts as more and more of this bad news gets factored into the consumer.

I am still loving SRS, FXP, EEV, GDX, and DIG for the next year, as I think they should receive some good gains. Note the recent volatility of SRS lately. Just in the past two days we have seen it be up 30% one day and down 20% another. Even though, I love this fund as a long buy, it could be a great play for you day traders. If you can buy into SRS in the $70's price and sell at around $100, you may be able to turn some quick profits in a very short amount of time. Keep that in mind. Have a great weekend and Happy Trading.

It looks like reality is beginning to settle in for traders around the world as we continue to be caught up in a whirl wind of havoc and bad news. Today we saw that the market has little patience or mercy for the doubts and fears going on in the world. Wow, there's a lot to talk about today...

Today is the first time the Dow has closed under 8000 in 5 years. It dipped below 8000 last month but came back above before the end of the day. Another historical number we saw today was our CPI numbers. We fell 1% for the month of October, which was far greater than expectations and is the single biggest monthly loss in CPI since the index began tracking in 1947. Housing starts fell 4.5%, which was near market expectation (but still depressing). Coupled with that we had a slew of bad earnings report from retailers as well as the auto bailout fiasco which still continues. Overall, it was a bad day for your average stock trader.

These are the things we have been discussing for a month now. No matter what new bailout news we receive, or little light given by government regulators, nature will take its course. And until the government allows it, unfortunately, I believe we will be in this continual roller coaster that can give traders a splitting headache. Not to say that I am a pessimist and wish the economy to crumble. I just saw the signs a while back and know that's what needs to happen in order to get things back on track, so why not make some money on the way, right?

So lets talk auto bailout. I still believe a lack of intervention from the government and the auto companies going under could be the shove the market needs to capitulate, especially now. I don't know if the government is ready to deal with that. I think we will see some agreement happen, even though I disagree with it. But until it does, it leaves uncertainty, which the market hates. Uncertainty and fear are key signs to capitulation.

So what else led to the downfall today? The FOMC minutes were released today from their prior meeting from a few weeks ago. In it they discussed of the probability of negative GDP growth for the next 4 quarters. Even though many of us have already expected at least that, to hear it come out of "The Fed's" mouth causes even more concern. Their suppose to be our super heroes right? You can see their minutes here.

In the midst of all this turmoil, I am still a believer of the good possibility of a rather strong rally in this bear market. In fact, call me crazy, but I picked up some UYG options (.UUFLF), considering UYG was down over 20% today. Financials have taken the worst beating of them all, and probably will continue to, but I just felt like it was low enough to give me some good profits for the next rally. These are those "defining days" I talk about that I like to wait for to buy. That was my only move today. Our "Rock Stars" looked great today. SRS and SKF were both were over $220, impressive. EEV is up to $110, and FXP is closing in on $88 (All were up anywhere from 15-25%).

My long options were down today, but not by much, surprisingly. GDX and Apple are weathering through the storm pretty well. DIG was hit hard do to demand uncertainty. Gold futures were up today and it's only a matter of time when oil is creaching back towards $90. When the next rally comes, they should perform pretty well. Plus, my positions in these are significantly lower than my short positions.

Tomorrow is a critical day. We have seen a lot of resistance at around 7800. If we punch through that bottom tomorrow, watch out. However, being in this fragile state, with a bailout announcement or some positive news, we could see a pretty strong bear market rally. It will take something pretty significant though, I would think. Which ever way we turn, expect some serious volatility and strong moves in whatever direction we're headed. Remember, this is options week, which usually entails some manipulation, so we could see some interesting moves before Friday. Either way, I believe FXP should be at $100 shortly, as China is sure to be dragged down with us in our bad news. If we do indeed rally strong Thursday or Friday, I will look to get out of most of my options and putting them right into EEV.

I hope everyone survived today and that your bleeding green. No one can be 100% right in this market. If you are, give me your contact information. Thanks for the insights with your comments. Happy Trading and have a good night.

* Economic Summit: Major Problems, Modest Hopes
* More Americans Struggle With Loans, Credit Cards
* Kohl's, Nordstrom Cut Year Views As Holidays Loom
* Why Should You Worry About Weak Holiday Sales
*Obama Bounce Is Crushed By Worries About Economy

These are the headlines you will see on the front page of cnbc.com. Yet, we see the Dow close over 550 today. Amazingly classic. Well, lets discuss the facts. Since last Friday's unemployment announcement, there has been nothing but bad news looming on the economy, and the past few days we have seen the market react to that, but not by much. GM is border line bankrupt. Almost every retailer posted bad earnings. Then today, we started to see another down trending day, until about 10 AM, PST (see the regression difference at the turn around point below). At that point there was a huge dump of buying into the market. I couldn't believe my eyes looking at all of the sectors turn green. Then we see us close above 8800 with the volume far greater than the average. What does this mean to me? Market manipulation.

It is days like today why I went in and bought my Apple, DIG and GDX options yesterday and this morning. Even though it didn't kill the pain for me, it numbed it a bit. Plus, if I can get a quick return by playing long, I'm happy. Even though I have zero confidence in wall street right now, we still experience these aggressive bear market rallies with the help of some market movers once in a while. Do you think it is any coincidence that the big deadline for people to redeem their hedge funds is this Saturday? For some hedge funds, this is the last day until the following November. Think how many people are taking their money out this weekend. Are you? Are your friends? Next week, I believe the amount of money needed from the hedge funds to liquidate will be very large. In turn, they will then have to liquidate several of their positions, as we have seen some do already.

So, Yes, I took a bath today with my FXP. But, I'm honestly not worried (some of you may think I'm crazy). Like I said when I first bought it, FXP is very volatile. It can give you a heart attack, but I've been playing it enough and know enough about both our markets to feel very comfortable holding it for a while. This go around, I was planning on a 2 month ride. So if we hit January or February and we are still lingering around these prices, I can start sweating. China won the lottery this week, with their $600 billion bailout and this nice, strong, hedge fund driven rally we had today. We saw a similar trend with SKF back in September, when it was hovering under $100 and continually being beaten down below $100, only to shoot up close to $200 within a month. Remember, I said in previous posts that there was a good chance of seeing a rally before this weekend. I just thought if it hadn't started by Wednesday, it probably wasn't going to happen.

The good news. We may see SRS and SKF get back into buying position again. Either of these below $110 gives me confidence in buying them. Both have reached "rock star" status in my book. The bad news, we are probably going to see another strong rally tomorrow. Expect Asia and other foreign markets to go off tonight. Look for FXP to probably take another beating. If it gets near the low $50's, I'm loading up more. Hedge funds want the market as high as it can be in case of forced liquidations. If that is the case, tomorrow, I will probably begin selling off most, if not all of my long options I bought yesterday. I already saw big gains from them today (Apple Option up 34%, DIG up 20%, and GDX option up 50%), and I never like to push my luck going long. From there, I will put a lot of my gains into SRS, SKF and FXP. I attended a conference today where Bank of America doesn't see the lending markets BOTTOMING OUT for 2-3 years! Real Estate REITS loss half their value in the month of October! This is why I don't get nervous going short. Call me a pessimist, I like the term realist.

I've been expecting a day like today all week, but I was starting to think that maybe the hedge funds didn't have the muscle to pull it off, but it looks like they did. After 10, volume shot up and kept darting up into after hours trading. The higher they hike, the harder they fall. For the bearers of the inverse ETF's, cheer up and lick your wounds, because there should be a lot more up days like this for us then down. Just maybe not turn on your computer tomorrow. Have a good night and Happy Trading.

Every day that goes by we are seeing America slowly realizing just how bad it may get the next year. Today, only 1 stock was positive in the Dow and it was GM, solely based on the expectation of a government bailout. And I still believe the worse is yet to come.

Today, Secretary Paulson had a press conference to tell the country they are "revamping" the way they're going to spend the $700 billion bailout funds. Instead of focusing on troubled mortgage assets, they're going to focus on consumer credit debt. So now it sounds like they want to bailout people's credit card debt so that credit card companies can start lending to the same people again. What a great plan. This will somehow "unfreeze" the lending markets again. It sounds like full circle to me.

Well, the market didn't respond to well to Paulson's address. Following his remarks, we saw the Dow plunge another 100 points (300 more by the end of the day). The point is, even with hedge funds liquidating, most traders are realizing that we probably have some bad days ahead. These current market trends and volatility we are seeing are frightening close to the trends we saw in the market leading up to Black Tuesday. It's days like these, I'm glad I'm short.

FXP fought a hard fought battle today. It opened up in the red as a response to China's relatively strong performance last night. However, today's raging storm of bad news eventually brought it back up, closing a bit above $82. This is very encouraging for me, considering China had a strong day yesterday. China showed slow retail sales growth for the last month, which should shake things up. Most likely, Asia will take a bath this evening in response to our own bath. I'm looking for FXP to take a strong pop tomorrow.

On a different note, I actually bought long today. That's right, long. GDX has been so beaten up, I picked up some January expiring options at $22. So this gives me plenty of time for Gold to get a bit of a bounce from its recent slaughtering. I felt the need to hold something long as a hedge. If we go red again tomorrow, I am looking to buy back into the .QAADB Apple option (being below $10). Apple in the $90 range is a pretty good short term buy for me. I am enjoying the gains from SRS, SDS, and QID as well. Those should continue to run strong as we test a new bottom in the coming weeks/months.

There is still debate whether or not GM will be bailed out. My guess is they will. I don't think the government wants to send this market down the 6000 range (although I'm not sure if I agree with the bailout). Oil is another one to watch. It continues to get slaughtered as demand keeps going down. However, OPEC is considering another "emergency meeting" to cut supply again. This usually does well to give a nice 10-15% bump in DIG. I would wait to see how this week plays out before buying it. But if DIG goes below $25, it's a buy in my book.

Tomorrow, should be another good day for me, unless we wake up with a surprise from the government. There is still a chance of some manipulation from hedge funds, Friday being the deadline. Keep in mind, we still have the doozy of an announcement Friday, when they announce US retail sales. Once again, keep your eye on China tonight, that usually gives a good preview of where to expect FXP for tomorrow. Happy Trading everyone, and we'll see you tomorrow. Feel free to drop some comments, I'd like to hear other's thoughts.

They fought, and they fought hard. For any of you that have level two and three trading capabilities probably know what I'm talking about. Several times throughout the day we saw strong influxes of buying (my guess from Hedge Funds) trying to get the market in the green...And they almost succeeded. The fact that we are continuing to remain in the red during redemptions week should show the lack of consumer optimism for today's market.

We saw a good bounce in FXP today, closing over 10%. That should at least give some breath of life back to those like me that bought some shares in the low 90's. Just remember, this is a volatile, risky ETF. PLAY AT YOUR OWN RISK! I personally, having played and tracked this ETF for a while now, have a lot of confidence in it. One thing to keep in mind is there are talks of the Chinese government to begin to take stakes in certain Chinese companies. Announcements like these would most likely attract another emotional push in the Chinese markets, but as I have said before, they usually don't last long. This is all just talk, but it is something to keep in mind for those contemplating trading this ETF. I have accepted that we will most likely be up and down for the next couple of months, and then we should see FXP hopefully kick it into gear in December or January. All you have to do is turn on the news to hear the next bad thing happening.

I am straying away from energy stocks at the moment. Two of Tontine's larger hedge funds will be liquidated, which consist mostly of energy and coal. This should provide a saturation of the energy markets for the next while. These are just a taste of the many hedge funds we will probably see liquidated in the near future.

TJ Max was the lucky recipient of lower than expected earnings today, however, they didn't move much today. Congress meets next week to discuss the GM dilemma. I believe there is no way the government will let GM go bankrupt. If they were to allow them go under, this could be something that would cause the market to capitulate. Many analysts believe GM bonds are a good buy for this reason. If they end up getting help, we could see strength back to their stock. I don't plan on playing GM, because I would rather play stocks that rally as a result of a lack of government intervention.

For Tomorrow, it's kind of a toss up. I could see us having a green day as a result of some major hedge fund buying. If Asia reacts negatively to today's market than we could see another day in the red, so keep your eye on that. If we are indeed down again, I am going to look at buying some GDX options around $22 or $23, expiring in April. UYG has also taken a beating and I may go in and buy some $10 or $11 options expiring in April. I have been looking for enough red days to buy up some long options just as a short term hedge for this weird November. My goal is to completely be out of long by mid December. I would like to see FXP reach $100-$110 here shortly to pocket some profits, but I am also ok with being in it for a longer term. I'm sure all the FXPers had a good day today. I don't see a lot of green in the near future, but with government always looking to make a new bailout announcement, you never know. Happy Trading and we'll see you tomorrow.

Last night I went to check the China Index and noticed Hong Kong was up 9.5%, which made me a bit nervous, considering a large stake of my investment is currently in FXP. After investigating, I found that China had executed a close to 600 billion dollar bailout for their market. Well, no wonder. Another emotional stimulate to get people's buying anxiety back...For now, at least. With this week being a critical week for redemptions and with the outlook of retail earnings not looking so good, I believe China saw this as a must for them to try and stimulate the US market.

After realizing the cause of the large increase in China markets, I became excited to be able to buy yet some more FXP. I thought for sure it would have to be down another 20-25% today. When I woke up, I was very surprised to see the little affect the bailout had made on the market. FXP was trading down, but only at around $65. I was hoping for the $50's! Still, this was low enough for me to pick up another large stake. I know, some of you may think I'm crazy, and although this is not my usual tactic to investing, these times bring about different strategies and I don't see a lot of downside in this ETF.

The fact that China just injected $600 billion into the market and we were still down today should show where we're headed. Starbucks has already announced their lack to make earnings today after the close and there will be many more to follow. Kohls, JC Penney, and Wal-Mart are still to come this week, although I believe Wal-Mart will weather pretty good. Having FXP hover in the low $70's for most of the day should show this ETF's resilience. More and more people are beginning to recognize the value of these ETF's as we are seeing trading volume shoot up.

Circuit City made their official "Chapter 11" announcement today, that we knew was coming six months ago. Like I said a week ago, there will be many more of those to come. As for longs, to be honest, there is not many I like at this point. You have your safe bets, Proctor & Gamble, Verizon, Wal-Mart, which will be fine, but are boring, in my opinion. But these next few months, I do not see a lot of green for most companies. I do still like GDX (was up 6% today), SLV and DIG, since I believe commodities have taken too much of a beating recently. Plus, with Obama coming in and shutting down all of the domestic drilling, oil should gain some ground again.

I felt like we could maybe have a rally this week with redemptions on Friday, but today's resistance has made me think otherwise. I believe there is still a lot of market manipulation going on with the hedge funds, so don't rule out a rally yet, but that should lessen after this week. All the inverse ETFs look good. SRS was up 20% and SKF up 10%. SDS and QID are both great buys right now. If you have to go long, right now I would suggest cash, or short term treasury funds (CPFXX or WEOXX). And if you still want to play with Apple or Rim (which are still great companies with good fundamentals), try to at least buy April or May options to give you some flexibility, because there is still good volatility with them, but I would wait until after the holidays for buying retailers.

I am guessing that my FXP buying days are done. Like I've said in previous posts (and I'm sticking by my word), I believe FXP is a $140+ ETF by December/January. It will continue to have its ups and downs until after the holidays. China businesses are struggling, worse than the US. Once the bailout high dies down, they will have a hard reality check. The Government cannot bail out everyone. If GM goes BK, we could see the market hit a new bottom in one day. Unemployment is still on the rise and so is deflation. This mixture was a big contribution to the Great Depression.

You don't have to be depressed and lose money during this financial crisis. Play the bumps right and right now, it's hard to lose going short. Happy Trading and we will see you tomorrow.