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

The Friday rally returns. And in the midst of so much adversity too. I was surprised today to see my Zecco.com account in the red today when I first checked this morning. This definitely has to be the Obama anticipation rally, because I can't think of anything else that would end today green other than that. The belief in Obama's ability to continue to print money is ringing much louder in everybody's ears than the fact that there is much to be worried about in the near future.

Circuit City announced today that it's official. They have been unable to reorganize their business and will move to the next step, liquidation. For those who have been reading my site for a while, we knew this back in November. There goes another tens of thousands worth of jobs as well as an American business that has been around for more than 20 years. GE capital, Conoco, AMD and Pfizer are also in the plans for some massive layoffs. January-April's unemployment numbers are going to atrocious. Every single sector of business is somehow struggling in this market. There is no immunity.

As I said I was going to do yesterday, I picked up some Citi shares today. Due to their unfavorable earnings and their splitting, at $3.50, it is low enough for me to make the gamble. I predict some serious bank rallies next week as Obama gets put into office and begins to unfold his huge bailout plan. Although I feel this won't fix anything in the long term, it should make some serious movements in the bank stocks. Hopefully I can make a 30-40% return and get out of it before it comes down again. Sure it's a risk, but I'll take it.

I also picked up some more GDX options today. With the huge bailout plans, will come some serious money printing. Gold is sure to get a good bounce as Obama looks to unload a good chunk of cash. Just today, gold was up $35. This should be even more next week.

Bank of America and Chrysler got another check from the Fed today. Now people are wondering whether Circuit City should get a piece too. Why not? Everyone else has. They failed to draw the line with the autos, so they have opened this door and now have to deal with it. It really does scare me of what our deficit will be when all of this is done. I do recognize the principle of backing the banks, no matter what, but it should end there.

For all you Californians, enjoy your IOU from Arnold concerning your tax refunds. Due to the $41.6 billion California deficit, Arnold is looking to either issue IOU's or postpone the payment. Either way, holding tax returns will not stimulate the economy and should cause for even more problems. State government IOU's, are you serious? California is desperate.

It was another volatile day going from 100 up to 100 down and back up again. We are nearing market conditions from past October and it is beginning to become thin ice with trading again. After the Obama change, what is left to cheer? More bailouts? Either way, I think we're in for a tough run until May.

With the Vix getting back into the 50's, it's prime for buying the 2x inverse etfs again soon. Since they are momentum movers, the higher the VIX, the better, as long as you're going the right way. I hope you all have a good weekend. Next week is the big one, lets hope for some serious dollar signs. Happy Trading.

PS - I am running a promotional contest to win a quick $100 on behalf of Lending Club to try and instill some curiosity in the company. We've talked a bit about it on the site and I do feel they are worth checking into. So if you are interested, than go here for details. It requires no money to enter the contest, just filling out a form and poking around the site. I'm just trying to stimulate some curiosities.

Just as a crack addict must eventually come to terms with reality and "sober up", so it is with the stock market on this "Cyber Monday", directly following the Thanksgiving weekend. I am sure what many thanks people had this weekend are all but gone when they saw the close of the market today. Well, maybe not everybody. In only one day, the market is more than half way back to our recent set bottom after enjoying a whole week of gains last week. This is what I have always been preaching, when economic news isn't on your side, it's a tough battle to win.

So it seems as if not all the bad news had been factored into the market, which is what some were starting to believe. Now, most everyone is in agreement that we still have a ways to go until we reach that bottom. Of course nobody knows, but lets hope next time people are slower to jumping on this bottom band wagon again.

So why today? Well, first off we had the profit takers. In a bear market, a week long rally is more than you can ask for and if you didn't take any profits on your longs, than shame on you. Second, they're officially proclaiming that we are now in a recession, which shouldn't be that earth shattering for most of us. They say that this recession started in Dec, 2007. Still, hearing it out of the horse's mouth always hurts a bit more. China continues to have problems as their PMI (Purchasing Manager's Index) reached a record low, falling from 44.6 in October to 33.8 in November. These kind of reports are beginning to make analysts very skeptical of China's ability to maintain their 10% growth that they are constantly reinforcing. As time goes by, China is continuing to show more and more of its true colors.

As a result of today's antics, we saw huge gains from every short in the book. Financials took the lead with SKF being up almost 30% (FAZ up over 40%). SRS also finished strong as did FXP and EEV. This combined in giving me a very healthy day of gains across the board. Of course my unsold long options took a hammering, but those losses were easily outnumbered by my very large gains on the short side. It's days like today that I am very glad I sold some options last week!

Today's performance doesn't look like a 1 day fluke. This heartburn could continue throughout the week. Expect world markets to get slaughtered this evening and there is nothing but more bad news tomorrow. We could return back to that 7500 region very quickly.

More big news to consider is Governor Schwarzenegger declared California in a state of "fiscal emergency" and called a special budgeting meeting with lawmakers to discuss the next few months. Believe it or not, California risks bankruptcy and even hints of the thought will cause a very negative reaction to the market. If these troubles are taken further, watch out.

Auto sales are released tomorrow, just in time for the big GM meeting. These figures should be record breaking as no one seems to be buying cars. Also, keep your eye out for Friday, as they announce non farm payrolls. This announcement may be enough to put our recent "Rally Fridays" to an end.

In any case, as we have seen from today, clearly investors aren't ready to run yet. There is too many unknowns that remain to make people comfortable investing in today's market. We should see some strong gains from the inverse ETFs this week. The GM bailout may shake things up for a day or two, but that should be over and done with shortly. The market may still rally back in forth for a bit, with us being in this "bull season", but as I have been saying all along, I believe we still have a ways to go down before we go up again. Have a good evening everybody, Happy Trading and we'll see you tomorrow.