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

I found it comical to see Cramer this morning almost mimicking my April Fools joke from yesterday by publicly calling today that "The Depression is Over!" Today on national television Cramer said that thanks to the genius works of Geithner and Bernanke, he is officially calling it that the "depression" is over. He indeed feels that we are still in a recessionary state, but obviously is saying that the worst is over. Cramer...Come on! Are you serious? I think during the recent distress of GE, the government came in and took control of the GE's assets (including CNBC), which is now why every analyst on CNBC is now saying that President Obama and Geithner have been flawless in their government intervention. Either way, Cramer has made a lot of "national calls", many of which have never come to pass. Good luck on this one Cramer, no going back and editing your show like you usually do!

Come on guys, we discussed these "speed bumps" in my post last week, so there should not be much of a surprise. Indeed I was a bit surprised at the degree of praise the markets received, but a lot of the extra praise came from more "fluff" from the G20 meeting. At any rate, a day like today is nothing new that we haven't seen. Whether it is a new trillion dollar economic stimulus, loan modification options, or a company bailout, we have always seen these temporary, violent responses from the market. The keyword being here is "temporary." This is another one of those days where I believe the market reacted before they analyzed what it meant, much like we saw when the Fed announced their trillion dollar toxic asset plan. You will remember a vicious sell off that followed that day.

What caused much of the praise today was the mixture of the statement from the G20 meeting in which they said as a group, the committee will do all that is necessary to bring health back to the global economy and the vote from FASB to "relax" mark to market accounting. The G20 announcement should not be earth shattering to anyone who has kept up with the committee in prior meetings. They have always taken this stance and I believe if it were not for the mark to market meeting, most investors would have looked right over the meeting.

As for the FASB meeting, the results were much as I anticipated. The vote was to "relax" the mark to market standards, giving banks more options when considering to write down debt. As I have said before, this should make a difference on paper as far as reporting and keeping their balance sheets balanced, but it will not solve the problem of frozen lending. In fact, from here on out, I would suspect investors to be even more "skeptical" of bank's earnings reports, as the numbers will no longer reflect current values. So although this may help with their reserve requirements from the Fed, more will be required to get banks lending to the consumer again, which ultimately needs to happen if we expect to turn this economy around. So, I am calling it as well, "Cramer you will eat your words!"

Bulls and dependent analysts are already trying to downplay the significance of the non farm unemployment number which is being released tomorrow. They are indeed yielding to the fact that the number will most likely be the worst we've seen thus far, however they are saying that the unemployment is a delayed indicator and that there are many future indicators that are becoming more positive. Nonsense! Unemployment is one of the biggest influences of GDP performance. Sure, it may not be as "forward looking" as some indicators, but to say that the worst number we have received is good news for our economy is, in my mind, ignorance.

I personally don't feel that investors will be so easily duped tomorrow. Indeed there is a lot of positive momentum in the market right now, but a bad unemployment number will eventually take its toll, whether it be tomorrow or next week. I strongly believe, just as we have seen with other new announcements, the news driven rally will be short lived, and we will then look for something new to keep the rally going. We did see the Dow trace back toward the end of trading, closing under the 8000 mark, which mentally, for investors, is pretty significant.

As we would expect, the shorts continue to get crushed by these rallies, which is a big reason why I am choosing to play it safe at the moment. If tomorrow takes the market above 8000 levels, I would believe that is a pretty good indicator that we have some more of this rally to endure, especially with more fluff to be announced. There will still be small opportunities in between, but as for the big set up, we've probably still got some bleeding to do on these shorts.

My apple options (QAADB) were up over 100% at one point, which actually turned today into a profit, over powering my losses from my SRS and FAZ call options. I had written off these apple options months ago. It's amazing what time and patience can do. RIMM soared after hours with a positive earnings report, which should keep Apple and RIMM in the green tomorrow.

My biggest goal remains capital preservation in my Zecco.com trading account. Bears are getting killed in this rally if they are not careful. Although my current patient strategy may be frustrating to some, it has saved me from serious losses that I could have suffered if not for my patience, in which I go into more detail on today's podcast (subscribe here). I do feel there will be a great opportunity to make money on the short side, but that time is not quite yet in my opinion. Happy Trading and we'll see you tomorrow.

BREAKING NEWS*** The recession is over! Today, I liquidated all of my shorts and placed every last cent from my brokerage account as well as two mortgages on my house into 3 stocks- AIG, C, and GM. I plan to be a billionaire by July. Well, that's going to be my best attempt of an April's fools joke and I am sure I didn't have anyone believing it for that long, but hey, we've got to have some fun on here. Believe it or not, but there are many out there believing that the above portfolio would be a good play right now. As for me, we're right on track on where I expected to be at this time, and this is good news.

It seems as though investors are going to roll the dice with the FASB meeting all the way to the gates. With this much buying purely on the speculation of the meeting, it just means there is that much more to retrace if the announcement is on par or less impressive than what people are expecting. In my mind, there is too much anticipation for the meeting, as I personally don't feel their decision and changes they make to mark to market are going to change much of the economic turmoil. If anything, it will adjust how banks look on paper, but as we have learned from past experience, that debt must be accounted for sooner or later. You would think that the US would learn from our mistakes of the past.

Today's rally also overshadowed some more ACTUAL bad news that was overlooked due to all the excited buying in anticipation of tomorrow's FASB's meeting. Today's ADP unemployment projections for March blew expectations out of the water. Market expected the number to be a loss of 663,000 where the actual number was 742,000! If this isn't bad news, I don't know what is. I have been saying it over and over, that the two most crucial economic indicators for a turn around in this market is unemployment and housing prices. When I say housing prices, I do not mean purchase volume, but the average house price. I expect to see more and more houses sold, but it is the average price which I am interested in and which I feel is an early indicator of where our economy is heading.

With this in mind, this forecasted number of 742,000 shows the continual deterioration of the economy as more and more businesses are contracting due to lack of consumer spending. However, with the announcement there was not much of a reaction from investors. Sure, futures came down as did the value of the dollar, but I would consider this data much more defining compared to anticipation of a FASB meeting that no one even knows what the consequences will be of such an announcement that is made. There are a lot more forces pushing the market for a sell off tomorrow than a rally. In fact, I believe only a close to flawless plan announced from FASB tomorrow could end us in the green.

Another reason why today's unemployment forecast was critical is because it foreshadows the unemployment rate being announced on Friday. Obviously this number is going to be a very bad number. As long as our small businesses continue to have huge employment cuts, how can we expect to bring an increase to our GDP, when 70% of our GDP relates to consumer spending? Another critical result from today's number is that the government led the way with the job cuts. Here the government is spending trillions of dollars on trying to "preserve" jobs and they can't even retain their own employees. If they can't, how can we expect any other small business to? Especially with new up and coming tax margins.

One data piece that many felt "equalized" the above number, was the lower number of scheduled job losses. Scheduled job losses fell 19.3% in March to 150,411. I find this number to be much more insignificant than the ADP number, but most obviously don't. Also, many people were impressed that GM's sales were only down over 30%. What world do we live in now?

As I expected, oil took another hit today as energy and commodities are continuing to show weakness. As strong as the market was today, financials rose fairly moderately, leading me to believe that indeed we could be near the end of this aggressive financial rally we've seen this past month. However, there still remains too much up and coming government news which makes me still cautious in moving forward.

Right now I am pretty well balanced. If indeed we see a positive reaction from the FASB meeting and rally, I still have several Apple $110 call options that I bought back in November that should get a big boost, as NASDAQ has been benefiting most from these rallies recently. If we fall from more bad economic data, my FAZ call options and SRS should see very strong gains.

So, we have another critical trading day tomorrow and hurdle our first big "anticipated" announcement, in which we have a few more to come in the coming weeks. Tomorrow's reaction should give us a preview of what we should expect going into some of the others in coming weeks. The US dollar is becoming prime for shorting, especially in the midst of all the G20 meetings. I may be shorting it as early as tomorrow depending on how the market reacts.

I have thus fulfilled my March goal thus far, which was to preserve my capital for a much bigger and better profit opportunity. At this point, we are much more closer. The shorts are cheaper, the sentiment has changed, and the deflation indicators are stronger. My Zecco.com account is ready and waiting to beef up on short. The time is very close. Just a note, those who were unable to subscribe to the premium podcasts, the problem has been fixed. You can now subscribe and become a premium subscriber by Clicking Here. Happy Trading and we'll see you tomorrow.

**PODCAST UPDATE- The subscription problem has been resolved and you are now able to subscribe to CMS Premium Podcast, Click Here to Subscribe.

Today, bulls answered the two day consecutive sell off with rather strong gains for the Dow, mostly lead by financials. At one point the Dow was up over 200 points, but ended with a rather strong pull back the last 45 minutes only closing up 87 points. There was no significant news in my mind that caused for the aggressive buying, which leads me to believe that, once again, investors are buying on speculation, not actual data.

The market was pulled up by the strong day in financials. Fundamentally, this is surprising, considering all of the bad media that the autos have been getting and the real possibility of bankruptcy for GM and Chrysler. However, as I discussed in Saturday's post, there are a lot of "influencing announcements" which are right around the corner that investors are obviously feeling that are going to have a positive impact on trading. However, this is a very risky game to play. If you want to play the "speculation" bumps, make sure to ride them before the announcement, because lately, the actual data released has usually been more of a downer than what investors had originally anticipated and can lead to a reverse in trading.

My guess for today's praises is the anticipation of the FASB meeting being held Thursday to discuss changes in the mark to market accounting, which I previously discussed here. It is hard to see FASB completely doing away with mark to market, as it would most likely cause more harm than good. However, many believe that there will be enough alteration that will give banks a lot more breathing room on their balance sheet. The only problem is that much of that was factored in today's trading and that anything less than a significant alteration in the practice would most likely lead to a very negative response from the market. This is why we saw SRS and FAZ get hammered today, as much of their success relies on the compounding debt plaguing the financial institutions. However, whatever the result, bank's problems are far from over, in my mind, and these speculation rallies set up good opportunities for short term shorting for quick profits.

BBY (Best Buy) is one that I have been eyeballing along with GS for opportunities to short here in the near future (I discuss it more in today's podcast). I think both are susceptible to significant downside risk as markets continue to become non-reliant and the economy worsens. When indeed deflation hits hard, I would expect BBY and other electronic depots to get hit pretty hard, especially since much of their inventory is purchased with debt. So I'll keep my eye on these two.

Currently, markets are down in after hours, and both FAZ and SRS are up rather strongly, especially for after hours trading. It is very common to see an even bigger sell off following days of strong "speculative trading", which I believe was what we saw today. However, with one more day left until the FASB meeting, enough noise about it on the news stations could still give some financials a bit more love, but I do feel they got most of their "pre-bounce" today.

So, Thursday will be the critical day to watch as all eyes will be on the FASB meeting. I still see oil and gold having some more downside risk before seeing buy opportunities of the two, however, agriculture has been looking very strong lately. Remember, E*Trade is running a great promotion right now where you Get 100 Commission Free Trades in an E*TRADE IRA. No-fee, no minimums. Definitely check it out as it is becoming a good time to setup up the IRA's, as more and more future tax risk is coming. Happy Trading, we'll see you tomorrow.