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

There sure was a lot of hustle and bustle on the floor today as hopes for Obama's new plan filled buyers with confidence, especially concerning financials. Sure, myself was included in the mass of buyers, but for me it was not an emotional buy. It was purely just buying knowing that there would be many believing that Obama's new plans will push us through this depression and financials crisis and on to greener pastures. I surely did enjoy profiting off of the emotional compulsiveness of other investors and plan to do it more often. So what was today all about?

Wells Fargo up 30%, Citi up 20%, and Bank of America up 15%. Wow, that's some strong pushes, what on earth could have happened today? To be frank, not much. Sure there were a lot of talks and whispers in headlines throughout the day, but fundamentally, not much changed and unfortunately these kind of "emotional rallies" can really tee up a strong market crash.

First, news came last night that Obama plans to push this stimulus through ASAP. No need to cross the T's and dot the I's, just get it signed. Considering "checks and balances" no longer exist in our government currently (as democrats control all the powers), there shouldn't be much delay in getting this passed. Some may think this is just the beginning of the road back up, especially with the banks. As for me, I took most of my profits and ran.

So, yes, I did get out of most of my position in financials today, before the close. What I have learned recently is that you can't be greedy in this market, and getting a 14% return in a day is fine by me. So I took most of my money out, just leaving some in case of another day running. Believe it or not, but I took a lot of my earnings and put it into SRS and DGP (a Deutsche Bank Double Gold fund, see trend analysis below, get your own symbol analyzed for free, all you need is a name and email, Click Here). I think we went a bit overboard in the buying today and I expect some serious pull back either tomorrow or Friday, especially with GDP news coming up, and here's why.



One announcement that has seemed to cause excitement with financials is the new "bad bank" plan. This is, in a sense, a plan for the FDIC to take control of the bad assets and hold on to them until values once again appreciate. So far, the way of doing this is unclear, but many speculate that many of the banks deemed "bad banks" would essentially be temporarily ran by The FDIC, or in a sense, the government. So in other terms, "nationalizing" a lot of these banks. A similar program was adapted during the last real estate catastrophe, where the government issued an RTC program to buy back troubled assets. The problem is that our debt is far greater than that of the RTC days and our length of this recession/depression is unknown and is most likely to much, much longer. What I don't get is why are so many people buying up financials, when in fact if some of these banks do become nationalized, shareholder's equity most likely will get wiped out? Analysts are warning (well the smart ones) of this, but investors have tuned them out as they listen to the new songs of "bank bailouts". My point is, I do not want to be stuck with a slue of bank stocks as the governmental begins to experiment with different nationalizing ideas.

Then we go on to the new Obama stimulus plan itself. Have you read it? This thing is suppose to be devoted to assist in job creation and we're spending $350 million of tax dollars on STD education and prevention? How is that going to help? I mean at least if STD's are still flourishing there will be money spent on pharmaceuticals and doctor visits (a joke). Also, there's a allocation of funds to landscaping the capital building. Who cares? We are in a depression and you want to worry about landscaping. Truly, there is a lot of wasted money in this bill and if we are only dedicating 50 cents to the dollar to actually assisting in job creation and the buying of bad debt, it will take over $5 trillion in bailout funds to begin to do something. Get it together guys.

I do believe that above all, banks need keep the consumer's confidence. That was the biggest cause of the Great Depression. People lost faith in the banks and banks failed. However, I believe there are many ways to keep banks lending, and help manage their current "over leveraged" state. They just need to tweak things back at the drawing board.

Starbucks gave some more bad news today as they are looking to close even more stores down. The worst part about these rallies, is many times, real economic data sometimes gets tossed aside as people are"high" with emotion. Hey, even the US mail is struggling. They are toying with the idea of only delivering mail five days a week instead of six. The point is the rest of the world is going on behind this bailout fluff, and it doesn't look pretty.

At any rate, I'm glad to be out. Sure, we may indeed rally more tomorrow, but like I said, I can't be greedy. Indeed I feel if our government is not careful with how we spend these next trillions, we could end up spending our way to death. Hopefully, Obama can round his people together to find a good solution, I just still believe there is A LOT of work to be done to their proposed plans. Tomorrow should be interesting. Seeing how we open will determine whether I make any moves, but as for now, my Zecco.com account is staying put. I will keep you updated on what I do in the comments section. I hope everyone has a good evening, Happy Trading and we'll see you tomorrow.