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

Buyers were out of luck before the market even opened on Friday, having to compete with some horrific GDP numbers. Although, it did look at times as though buyers were maybe going to get the market in the green (NASDAQ did go green for a while), lets be honest, at a -6.2% drop in GDP, no good news can be derived out of that. We once again, saw a pretty strong battle close to neutral grounds for a large portion of the trading day, but as has been the trend lately, bears came in with the last word during the last hour of trading. The new numbers for analysis are critical, and depending on next week's performance, we are becoming very close to some very dangerous numbers.

With the bad GDP announcement, it was no surprise to me to see us close at where we did, just over 1% on the Dow. In fact, at opening, it was much worse and I even thought of the possibility of a 3% or more down day to close the week. I was a bit surprised at the strength to bring the market back at midday, but both sides has shown their ability to be violent lately. If anything, we are in even more dangerous waters, no matter which side you're on, because there still exists the feud of technicals vs emotion. With this battle going on, a very violent rally could exist on either side, which could be bad being caught going in the wrong direction.

A critical reading from Friday is that we did indeed close the S&P under the original November 20th lows. Being as big of a move as that is, however, it is even more critical to see if this position can hold going into Monday. We did see the market reach this low Monday, only to bounce right off it the next day and rally over 3%. So, Monday acts as a very critical day for these market tests and I will be interested to see if they hold up. With the GDP numbers, consumer spending was down considerably, as was the prices of common goods. I will be very interested to see how the level of the drop in prices affects the deflationary models. We won't be able to tell for a couple weeks, but these new numbers could indeed confirm my suspicions of a near coming deflationary spiral, which could propel us into capitulation. So I will be watching that very, very closely.

Warren Buffett got a letter out to his shareholders telling them, he had made some mistakes during 2009. Didn't we all? I respect the old man for being frank with his investors and admitting to the wrong moves he made the year prior. If only there were more Buffetts out there. He speaks of his bad decision to enter into Conoco Phillips last year at such high prices. He didn't believe that energy would get killed as much as it did, but still feels oil has a lot of upside from its recent low levels. In fact, I love Conoco right now. I threw it in my IRA a couple weeks ago. COP has a Market Club report score of -100, but they have shown they are a strong company even in tough economic conditions (get your own symbol analyzed for free, all you need is a name and email, Click Here).

He also spoke of putting $244 million into Irish banks, which he felt like was cheap enough at the time. However, the value of that investment has been reduced to $27 million. As big as the mistakes may seem and even having the worst year for his company since he took over in 1965, he beats out most major indexes for performance for last year.

Buffett also feels that we should continue to experience a rough 2009 throughout the rest of the year and that economically, we should have problems for the next few years. However, he does not feel that it necessarily means in the stock market. He finishes off to say that the best days for America still lie ahead.

So, a big Monday awaits the market. Once again, no big moves for me. I wait in mostly cash until I can get some readings from the models. I just feel we are in a dangerous, volatile time where either way I position myself, whether it be long or short, I am very vulnerable to an opposite rally. So, I am just holding with my municipals, few short positions, as well as my very small long positions. Have a great weekend, Happy Trading and see you Monday.