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

It couldn’t have come at a worse time for Apple and for the rest of the market. On Wednesday, Steve Jobs (CEO of Apple) announced that he would be taking a leave of absence from his duties at the company until the end of June to focus on getting back to health. He said major decisions would still run through him, but day to day operations would be handled by the COO. This news sent Apple stock down as bad as 10% in after hours trading. Just rumors of bad health with Jobs caused the stock to drop 5%. I would expect a very serious blow to apple’s stock price tomorrow.

Given that, if Apple gets hammered too much tomorrow, I actually may pick some up. I mean come on, I know the company is Job’s baby, but lets be honest, they’re not going anywhere for a while. Plus, they have $25 billion of cash in the bank! Just their cash on hand along with their other liquid assets has got to be worth at least $40 per share. So I will keep my eye on that. It was bad news for me, as I still have a couple of apple options. Thanks Steve.

Well, I’m sure we can certainly expect this to affect the market tomorrow as there are plenty of other things going wrong around us. Good luck Obama. Steve had to wait until after the worst trading day since December 1st (-248 pts) to break the news. Even without the announcement, things were not looking good for tomorrow. There is serious downside momentum and as we near breaking the 8000 (we could reach tomorrow) mark again, people are starting to anticipate a new bottom. Possibility in the 6000’s.

Today, retail sales was also confirmed to be horrible for December, as the National Retail Federation announced a 2.8% decline in retail sales for the month of December. This being the first time there has been a decrease since they started tracking the number in 1995. We also had two more members join the bankruptcy club today. Retailers Gottschalks and Goody’s filed for BK today, which is just the beginning of which I feel by the end of the year will be a club with standing room only. With those, comes more job losses. Motorola announced a 4,000 job cut today. As I have said before, this year, the retail will be the backbone of this downfall. With the failure of the retailers, will come the failure of the real estate. Then the trillions in outstanding debt will turn into the bank’s problem once again. What does this mean. Long on SRS and SKF. In fact all of the inverse etfs were up big today. My portfolio is starting to look like it did back in October. And I still feel we’re ankle deep.

I expect to see a horrific day of trading tomorrow. Apple has become the face of the US market, especially the NASDAQ, and such a devastating day is bound to bring down the rest of trading, let alone all the other crap that is present. I don’t know how long this selling spree will go until we get an up day, but as of now, I can’t perceive anything that people can find as “good news.” Even Bank of America getting more aid from the Fed. At any rate, I’m hoping to see another big day for my inverse etfs. If they go big enough, I may consider shaving some of my SRS earnings and putting them into Apple. We’ll see.

I also wanted to give a little update on my Lending Club experience. As you can see I have received my first interest payment. Big money! But as you can see, the platform is very easy to use and makes tracking your investments quite simple. It looks like my monthly payment is just over $6. So lets hope my 10.5% return stays in tact. So far so good.

I hope everyone has a good evening. We have been talking about these problems for some time on this site and are just now finally starting to see the market begin to suffer the symptoms of our economy. There is still a ways to go. Happy Trading and we’ll see you tomorrow.

Kermit The Frog said it best when he said, "it's not easy being green." Christmas came early today for the bulls, as we saw government intervention all across the world. It must be everyone's holiday cheer. Even with some of the worst economic data we have received all year, we were still able to close at 8726. We expected this rally, however, I personally felt that it would come more aggressively in a smaller time frame, than spread out into more days. This was the exact reason why I held on to most of my long options, and good thing. The November and December months have a history of ignoring outside data and bulling forward. The big question is, will it last? My thoughts, even after today, are NOT A CHANCE!



By now, many of you may think I am just a pessimist, and I'm not, I swear. I have made just as much money on the long side than I have short. There are just too many reasons that exist to make me feel comfortable with going long again. Sure, we had some great rallies this week, and you know what, I think it will continue for a bit. But there is too much hype derived by speculative announcements and mythical figures to be anything solid.

China made a HUGE rate cut, which of course is going to send them flying a day or two. Europe also joined in the cheer by adding more money to the bailout pile. These two announcements of course killed FXP and EEV for today. Which with those two, I just have to sit back and wait. It could be December; it could be January. But I'm still backing them 100%. Cheers to the people that are just starting to buy these at their low rates!

Many agree this rally may continue for another 1000 points or so, so those of you skeptical about shorting, you may want to wait another week. However, if you miss the boat, don't blame it on me. However, most also agree that we have not hit bottom and that the rally will end with an even worse sell off. So I will just utilize this time to make even more money on my long options until we see it come down again. In the midst of all this green, I'd like to give my five reasons I am thankful I'm short on this Thanksgiving week.

1) This Is A Global Recession
These days we're in aren't like the recessions of the 70's-90's, where we are feeling an isolated recession, and we can look to other flourishing countries to help bail us out. It's everyone for themselves right now. With our economy now being a global economy, this does not give us many to people to go to for temporary relief. All nations are feeling pain right now. Although, most people may seem optimistic of China, China is struggling. Several Chinese toy companies, which is a prominent trade for China, have either shut down or have laid off several employees. Yesterday, there was a huge riot of employees claiming they had been wronged. Get use to seeing that.

2) The Warren Buffett Farm Analogy
A couple months ago, the all wise Warren Buffett gave a great analogy to what is going on with our nation's economic position. He said, "We're like a very rich family; we own a farm the size of Texas but want to consume more" than the farm generates, he said. "Every day, we sell off or mortgage a piece of the farm."

If the policy continues, over time, the rest of the world "will own more of our farm" and future generations will resent that they spend part of their workweek paying off those costs of consumption, he said. We have been mortgaging off our "farm" for years now and our national debt proves it. There is no way the government can conjure up all the money needed to free Americans from our debt dilemma. Pretty soon, us as Americans are going to be feeling this first hand.

3) Housing Market Leads The Way
Today's housing announcement should have shown everyone just how bad of a position we are still in and should be in for quite some time. The point is, even if it turned into a buyers market tomorrow, it would take us 6 years just to buy all the inventory that is currently on the market, without bringing in new inventory. Housing prices have a direct correlation with consumer sentiment. No one likes to know the value of their house (usually people's main source of equity) has been cut in half. Everyone now feels they are invincible to foreclosure and bills, thanks to Uncle Sam. This is not the case. A majority of people will not be bailed out of their mortgages and credit card bills. Once this sets in and creditors come knocking, this sediment will charge downward. The housing market led us into this crisis and I believe it will lead us out.

4) Many Hedge Funds Not In The Market
There is a lot of money still sitting on the sidelines. In fact, most hedge funds still are sitting on the sidelines. Despite the rally today, the volume was very low. This is not the sign of a turnaround. A lot of the market is being dictated by uneducated yahoos, feeding off emotion. It is no wonder there is no correlation in the market right now. So why are hedge funds sitting on the sidelines or staying very conservative? I think because they know we've still got a ways to go.

5) No Banks and No Money
Last, but probably most important, No money! Nobody can get money right now. Most American business buy their inventory on margin (or on loan). With the big drop in sales, many retailers cannot make their margins to buy new inventory. This is what exactly happened to Mervyn's. This is also the problem with small business owners, real estate owners, joint venture funds, commercial REITS, Insurance and pension funds and others. When the financial markets went away, these all went away. If you talk to any banks, especially in their underwriting department, you will find that they don't plan on giving out many loans for a while now. This lack of liquidity will continue to hammer down on our economy.

These are the main reason I cannot jump on the green band wagon. Even though I am hurting in my shorts, I will just wait. I am making great money in my long positions and will look to liquidate those, probably next week. I was able to begin my SRS purchasing today. I will continue to buy SRS if it continues to go down. Q1 2009 should be a horrible quarter for retail sales and real estate owners. If you want to be long, for comfort, I like VMW, VZ, DIG, and GDX (these are most that I am in). We will continue to get more "Obama promises", but as conditions continue to get worse in the US, and these problems begin to hit people's homes, we as a county will become a lot more skeptical. I hope everyone has a good Thanksgiving and has something to be thankful for. Have a good rest of the week and Happy Trading.