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

Well, it seems as if we aren't as excited for 0% interest rates as we thought at close yesterday. It seems as though people have been digesting the thought of the huge rate cut with some serious questions. Why on earth did the Fed do such an aggressive cut? What can they do now to help stimulate the market? Even though there are still many vehicles they can do use to attempt to stimulate the market and cause for more speculative rally days, their strongest weapon is now out of bullets.

The fact that the Fed made the decision to slash the rate to the degree that they did yesterday, tells me that they think some serious problems are ahead. I mean, if the Central Bank feels they need to bottom the discount rate, like I said yesterday, this is their big finale that can hopefully carry us through the very frightening 2009. Really, the only big factor left, is the ability to continue to print money and flood markets with more capital. But Japan and Germany has shown us what can come from doing that. That is why I have loaded up on GDX and GLD. Which if you are looking for a trading account, you can get free monthly trades at Zecco.com
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Well, Chrysler announced today that their assembly plants have been put on hold. Sure, this could be a bluff to try and hurry a bailout decision. In any, case it doesn't look good, especially to foreign nations. Ford also is choosing to shut down most of their North American plants an extra week in January. I just wish we could move on with the bailout, because we are going to experience another reactive day, like yesterday, as soon as something is announced with that. Can we please move on?

None of the short etfs were dramatically better. EEV and FXP were some of the better performing ones as foreign markets continue to show frightening signs. SRS was significantly lower today due to some strong gains in the REIT sector (GGP and Kimco). I mean, remember, it was just yesterday that we just received a historical slash to the rate. For this reason, I held myself from pulling the trigger on more SRS today, although I may hate myself tomorrow. Of course real estate is going to receive a push with the rate at 0%. If it is down more tomorrow, I am just going to have to buy some more. I don't feel like this cut is going to stimulate the market. Those that can get new competitive loans, will most likely take equity out of their house just to put money in their savings account or pay off their credit card debt. It's not going to be money inserted back into the economy. I just feel that when we cool off from this fuzzy high we're on, we have some serious problems to face.

Another problem with yesterday's rate cut is that, like I said, we cannot lean on that anymore. The ability to cut the rate has single handedly been the biggest source for market recovery than anything else. Well, we have maxed that out. No longer can we factor in expectation into the markets when the Fed meets. These are just a few things I feel people came to realize after yesterday's closing.

Sure, we are still very vulnerable for some more rallying. This is a massive rate cut, and with the help of other nations doing the same (probably Japan) and the auto bailout, we may still rally some more. But are bailouts our drying up. I do plan on picking up some more of the longs I discussed yesterday to give me some more hedge, but I still am staying very strong with my short. January is approaching very quickly, and there are a lot of problems which have been pushed to "next year" that will come back to haunt us.

I don't see us going much past 9200. If so, maybe after the holidays, I expect some serious consecutive days of selling. There has been a lot of money made on the long side the past month, and I would like to believe many of these people would be cashing in their chips. Tomorrow will be an interesting day, as a pretty aggressive sell off spurred right before close today. This trend could push through tomorrow and create some more selling on the trading floor. Either way, I am expecting both red and green throughout the day, with a pretty aggressive punch in either direction the last 10 minutes. I have some making up to do on my shorts, but I still feel that we've got a ways to go before we start to get better in our economy. Have a good night and we'll see you tomorrow.

If your long in the market, you're probably hitting your head against a wall wondering why you didn't sell two days ago. It's amazing how one extra day can kill you in this market. And tomorrow looks like it's not going to get better. Earlier today, we saw the market react to negative earnings reported by a variety of big retailers, which I expected. Wal-Mart was the one of the few that actually beat market expectations (because now even the rich people are shopping there). In addition to that, there was a vast array of rate cuts all throughout Europe, many of which were disappointing, which ending up crushing commodity markets like Gold and Oil. Our trading volume has increased since earlier in the week, which makes me think even more people are selling than before.

If you are long, don't jump off a bridge quite yet. With a strong need of a short squeeze before next Friday (hedge fund redemptions), I believe there is a very good chance of a pretty strong rally early next week. So even though tomorrow may be worse than today, stick in there until next week. Our inverse ETFs performed great, as always. We saw FXP close above the $100 threshold already. For those that followed me in getting into it has seen a nice 15-20% gain in a few days, and we still got a ways to go.

Unemployment numbers are set to be announced tomorrow and it looks bad. Analysts are expecting to see a loss in 210,000 non-farm payroll jobs for the month of October. They are also expecting to see a rise in the unemployment rate from 6.1% to 6.3%, just this month. If the numbers announced are worse than these (which I believe they will be), good night. We could be in for another 500-600 point loss again. This shouldn't be bad news for those of us who loaded up on FXP and SRS, but not too good for those going long.

For tomorrow, stay with your shorts. We should see strong gains from all of them. SDS, the Ultra short ETF for the S&P, has been performing great. That is one to be following as well in this mess. Now depending on where we look to close tomorrow, believe it or not, but I am going to look to get into some long option contracts. Like I said, I believe we're in for a pretty healthy rally before next Friday, and I wouldn't mind riding part of that train back up again. I will be looking to get back into some DIG January contracts, probably around a $37 strike price, as well as some GDX and UYG options for April. I will only be doing these if we see a pretty down day tomorrow. The options give me the flexibility to win back any losses I may get next week a lot quicker, because of the leverage. But that sword cuts both ways, so watch out.

Now, if by some miracle we report better employment reports than expected, this could propel this rally to begin a day early, sending the market way up. So keep that in mind. We could see this short squeeze rally take us near 10000 before next Friday. I don't plan on selling any of my FXP (unless it hits $120 tomorrow, which then I will take some profits out), because after next week, FXP should be trading in the $120-130 range. The most important times of the day are at 6:30 am (PST) and about 1:45 pm. Like I have said before, the market has been know to swing 400 points in the last ten minutes of trading, so try to catch those times. Tomorrow should be a good day for FXP, SRS and SDS, which makes it a good day for me. There's good money to be made out there and I hope your tapping into it. Happy Trading and we'll see you tomorrow.