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

I am sure by now, most of you are getting weary of the endless political posts on all of your social network walls.  Election season is in full swing and as a byproduct, we get a very stagnant, unpredictable stock market.

This election, more so than past, especially has created a debate among Wall Street as to how the market will respond.  Most energy and manufacturing prefer Obama.  Investment and banks want Romney.  Either way, whomever does get elected is sure to cause some volatility in the markets for a short time.  This should stabilize going into 2013.

Regardless of the outcome of the election, there are still 3 main economic factors that success in equity markets hinge on.  They are:

EUROPE HANGS ON

Many believe that credit turmoil in Europe has already been factored into our markets.  I strongly disagree.  We continue to prove that we make investment decisions in a very "reactionary" process.  If credit defaults began to occur in Europe, you better believe this will hit home and strong.  There is nothing worse for the US than a big reminder of what carrying a lot of debt can do to an economy.  To keep a favorable trading market, we need Europe to hang on.

UNEMPLOYMENT

The topic that is on everyone's mind, except that it has been the topic of political discussion.  There is a reason why both candidates focus so much on it.  There is not a more influential stat that is reported than the Unemployment rate.  Most people can't tell you what our GDP growth was this past quarter, what the Treasuries are trading at, or even what current interest rates are at.  However, most know the current national unemployment rate.  It's all fun and games until you lose your job...  This directly effects investor sentiment.  We have been slowly pecking away at it, but we need some acceleration.  This last month, we saw a drop in the rate, but only because of people actual "leaving the workforce" and no longer looking for work.  We added less than 100,000 new jobs, which won't cut it.  Unemployment is the weight dragging behind market momentum, continually slowing it.

ACTION FROM THE FED

Time and time again we see the Fed pop in just when things are about to get real scary.  After the most recent employment report, reports have been buzzing with the rumors of another stimulus in the works.  Despite what the outcome of the stimulus might be, history has proven that markets love a stimulus.  Though it may be short lived, we usually enjoy a nice little bump across the board.

This season of trading will keep you on your toes.  The election is looking to be a close one and many are sitting back and waiting, including Wall Street.  Keep your tabs on the above influences as they can greatly sway markets one way or the other.  Happy Trading.

It seems as if reality struck a day sooner than expected. After seeing global markets reacting the way they did last night, I was surprised to see us down this morning. I thought we would maybe get a little rally today, followed by this massacre tomorrow or Friday. This just goes to show how grim the forecast looks for the next year. I am not blaming today's mishap on Obama, however, I knew yesterday's gains were a bit overzealous for the current situation we are in.

GDX actually weathered pretty well today and I was able to liquidate all my shares of AIG this morning before it got too nasty. Although I was hoping for a near $3 sale, I was able to sell at $2.30, yielding a 43% return in 3 days. Not too bad. So now, I am completely out of my long positions and will stay that way for the next month or two. Not too say I don't think we will have anymore green days. I just think if we do, they will be in result to a manipulated short squeeze or a reaction to some new stimulous plan that gets everyone all riled up again. Either way, they will be very, very short term.

I said not to lose faith in FXP, today we saw it up over 15%. SKF and SRS also saw huge gains. My large position in FXP ended giving me a pretty good day today, overall. And I believe it's going to be tough to slow this downward train.

Tomorrow, we have retail news. If it's anything close to last months, it will be bad. Consumer sediment has almost been completely wiped out and with the recent earnings reports from several retailers, I'm guessing this to be a bad month. Look for SRS to take a pretty healthy jump tomorrow, as most of their shorts are with real estate REITS. This stock is still a strong buy! I believe by January, we will see it back at $200+. With this news, we should probably see another down day tomorrow and even Friday. Our short term rally could be wiped out as soon as Monday.

It is still possible that today was a lot of profit taking. Solar stocks were crushed today, which was surprising, because with the election of Obama, (who is a strong supporter of alternative energy) you would expect a bounce. However, yesterday there was such strong gains that almost was overzealous. But don't be overly shocked if we somehow make it into the green tomorrow. People still are on this buzz of change with Obama.

Stay with your short positions, they will be what makes you a lot of money the next two months. If you haven't bought FXP, it is still a good buy. It was a lot better at $75, but under $100, it is still a great buy.

If you feel uncomfortable only in a short position, look to buy April contracts of GDX ($26) or GLD ($82), or look to get into some solar. STP is a great undervalued solar company. A few months ago, Morningstar had a 5 star rating with a target price of $92. Today, it closed at $16.35. I believe this stocks should be at $30-$40 by February. With the help of Obama's alternative energy crush, we should see strength in the big solar players. This is if you HAVE to go long. I would prefer to just hold short for now. This credit crisis we are in will most likely not BEGIN to get better by early 2010. So enjoy these inverse ETF's, because there are not a lot of guarantees in life! Have a good night and Happy Trading. We'll see you tomorrow.