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

Well, as we discussed yesterday, we saw another similar day today that we did yesterday, except for much higher volume and much more volatility. These signs just reinforce my feelings of a near capitulation for the market. We saw the market get off to an uncertain start as everyone tried to digest the earnings report for HP and Home Depot. At first, we saw the market react negatively to the missed earnings, but later in the day, the better than expected report as well with their 4th quarter outlook helped fuel the market back into green.

I also don't find much coincidence that the market pulled a 180 degree turn with about a half hour until close. Some people thought the earnings report fueled it all, or some said hedge funds came in. Looking at the volume influx at the end of the day and the degree of turnaround (as you can see from the chart below), my thinking is that it was good ole Uncle Sam and the PPT. With their current congressional meetings going on discussing the bailout disbursement, we can't afford to have these continual downward days. This little bump at the end of the day and showing that we ended green will do a lot for the global economy tonight. Europe and Asia could not afford back to back days like we saw last night. Also, talks of bailing out the auto industry is becoming more and more difficult. If the government passes on bailing GM out, I don't see them hesitating very long to file Chapter 11. This would be World War III for Wall Street. Speaking of bankruptcy, Circuit City's current Chapter 11 filing will become a Chapter 7 by January. Wait and see.

As you can see from the chart above, notice the steeper and longer slopes toward the close of the market. This represents a higher influx of volume as well as much stronger support on the buy side. This usually represents either a mass rally (which I doubt) or some market manipulation. The way we were heading we could have easily reached 8000 by the end of the day.

With that said, overall it was a pretty strong day for me. Almost everything made me some money. Like I expected from the horror of a day for China yesterday, FXP remained very strong throughout all times of the day. We saw it almost touch 80 today at one point. It did die down with the rally towards the end, but overall held its own pretty strongly. SKF broke 200 today, while SRS was just under it. I also saw some pretty strong gains in my Apple and DIG options. I did not choose to sell out of any of my long options yet, because I didn't feel like this was the "bear rally" I am looking for. I still feel there is potential for a pretty strong bear rally before capitulation. So overall it was a pretty strong day for me.

For tomorrow, I think we have a chance to see this rally extend. Foreign markets should react pretty positively to the momentum swing we saw today, whether it was real or not. This could tee us up for a relatively strong day tomorrow. However, with the GM woes still lingering as well as more retailers that are to announce earnings tomorrow, we could also see a down day. Whatever the case, expect higher volume and even more volatility. With China showing its vulnerability last night, this should now make FXP a stronger performer for me the next few weeks.

Also, keep in mind, we do have CPI and housing starts economic data announced tomorrow. If these announcements are worse than expected, expect a pretty negative response, and vice versa. Either way, my portfolio should benefit on both ends. If we do indeed rally strong, I can sell out of my options and throw them back into EEV and SRS. The market is becoming more and more unstable, which makes me wonder how on earth the few analysts out there that are calling this a market to buy in can justify that. I think we have a bit more defining to do. Have a good night everyone, thanks for the comments and Happy Trading. See you tomorrow.