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.

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.