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

Well, it seems as if the bears have called it quits for the time being and are letting the bulls have their fun. Not even having the job loss report by 233,000 more than the market expected can cause a bear victory for the day. I'll give you one thing, Friday's are hard to paint red.

Unemployment jumped to 6.7% from last month's 6.5%. This was 1% lower than market expectation. Many believe this is because many of the college students have just gone back to school, so they are not considered. Even though we have seen big strength in buying this week, I still feel that this trend will be short lived. For whatever reasons, this market is getting shoved up everyday despite very bad news. And I laugh at headlines like the one I saw on cnbc that say "Despite Huge Job Losses, The Worse Could Be Over." I am amazed that headlines like that exist on respectable sites. No one, including myself, has lived through the kind of downfall our economy will experience the next few years. The perfect storm that has combined is one that is yet to be seen in our economic past and to try and predict the bottom of it is pointless. I just don't think we are not even near to it.

After today, the market has proven that its going to fight this out. Now how long will that last? Graphically speaking, we could see this rally go somewhere between 9200-9500, and maybe even more. We will probably see it continue to climb up until the end of the year. Then we will hit January.

January should be an interesting month. This is the month I believe we will start to see a lot of crap hit the fan. I already know of 3 major retailers/restaurants, who have not yet announced, that will be going bankrupt Q1 2009. Even with Obama coming in, which I believe we will get a little rally before and after. But ultimately, I believe this is when the bears will wake up again.

I still feel we are very vulnerable for very bad sell off days like we saw this past Monday, which makes me hesitant to buy anything long. So I have accepted the fact that I may just continue to take some losses the next few weeks. I don't mind hibernating with the rest of the bears until the markets ready.

I have heard many people speculate that we could have reached the bottom and that the worst is over. However there are many reasons that I disagree with this. Here are some reasons why:

1) Housing market is still in the Pits
We should not be confident that anything is getting better as long as our housing market struggles. People underestimate just how important that number is. Housing values are the number one driver of consumer sentiment, because in most cases it is people's biggest investment. All across the county, most people's biggest "deal" has lost anywhere from 20-40%, depending on the market. That takes a lot out of peoples expectations. As long as our housing market remains in the gutter (which our most recent numbers have confirmed), I believe we are not done hurting.

2) Many retailers plan to go bankrupt next year
Think of hundreds of mini GM scenarios going across the country. Even though many of these retailers will not have the giant influences that the big 3 autos do, they still will do their damage. They have people that rely on their pension, and laborers across the country. With the continuing loss of small and large businesses, I don't think you can call now the bottom.

3) Commercial real estate foreclosures
This could be one of the biggest factors. Look what the initial sub prime crisis did to the market from 2007 to 2008. Well, commercial real estate is running about a year behind them. We have just begun to see foreclosures begin in the commercial market. These are going to pile up in 2009. The amount of debt that will be handed back to banks is unreal. It will be World War 3 when that happens, which makes me feel we're not at the bottom.

4) Beginning of the year blues
Historically, the stock market can have very bad months in the beginning of the year. Due to taxes, year end expenses, new years budgets and other elements, the beginning of the year can cause a blood bath for the stock market. Considering that we have just spent that past three usual bull months (except for the last week) in misery, doesn't make me think that will change when we get to the new year. Even after Obama is inaugurated, there will be plenty of things to going awry to make this market suffer.

So these are my thoughts on considering whether we have hit bottom. Although I feel that we could see a lot of green the next few weeks, I still think it will be short lived. I believe in the beginning of the 2009, the bears are going to wake back up and they're going to be hungry. So keep on your toes, get your cash in order, if you don't have a trading account, you can sign up for one and get free trades every month at Zecco.com. Also, for those that have cashed out and are waiting for definition in the market, these guys are offering a good savings account deal with strong interest and FDIC insured. See more at Earn 3.00% APY* in Online Savings.



Just to remind everyone, SRS is under $100. So see, there are many things to be excited about. It is Black Friday for the shorts for the next couple of weeks. Get them while they're hot! I hope everyone has a good weekend. Mondays have tended to be a selling day, but who knows what information will come out this weekend. Happy Trading everyone.

It is sure hard to fight off those bears right now. As much as this market wants to go on a good 8-10% rally, I believe there is too much bad news out there to get the momentum behind it. Even, with most of the major websites preaching that there should probably be a pretty big rally the next few weeks, it just can’t seem to kick into gear. Today, you see a lot of people preparing for the big kahuna tomorrow, unemployment numbers. I think analysts are trying to prepare people for just how bad this number will/could be, so that hopefully when it hits, the market doesn’t sail down and maybe even goes up off of over expectation. I see so many analysts on TV trying to cover up the news we keep receiving and put in under the rug to try and spark this rally. However, I think people are slowly becoming overwhelmed with continual bad news coming out day after day.

Another element making the market nervous right now is the auto bailout meetings. The media is doing a very good job of portraying the bailout as “skeptical” or “not likely”, but I believe there is no way the government won’t strike some sort of deal. In my opinion, people are just trying to lower expectations, so that when it does pass, it will ignite this market. Either way, the outcome of these meetings will most likely jump start the market in either direction, depending on what is decided. Failing to help with a bailout/loan, could ultimately tank the stock market. So my guess, is that they will come to some sort of agreement.

I noticed today, more people seem to be realizing the doom that lies ahead in 2009. Like I’ve said before, I do not know how people could be optimistically buying right now with knowing what could possibly happen to our economy and small businesses next year. Sure you can try to gamble and get some quick gains on the expected bear market rally we may get at the end of the year, I just find it very risky. The market could turn on us at anytime.

I have noticed some performance jumps in some of my IRA stocks that are worth noting and should be pretty safe buys for this economy. I like owning some long positions to stay balanced and try to pick stocks that should weather pretty well to our economic condition. PSS (Payless Shoes) had huge gains today, after posting better than expected earnings. These discount retailers should remain fairly strong (at least not get hurt as much) during the recession. Brands like Wal-Mart, GAP, McDonalds, Coke, I feel are pretty safe bets in this market. As the middle and lower class begins to gain in numbers, there should be more shoppers at these discount retailers. A lot of them got a lot of love today, so I am going to wait for them to steam off a bit before buying some more shares. For all you big profit hunters, this may not be your cup of tea, but I enjoy having some safer long buys in my portfolio as well.

Retailers that I plan on staying away from are stores such as: Best Buy, Office Max, Staples, Sit down restaurants (Brinker, etc), Nordstrom, and others. I believe retailers(especially electronic and high end clothing) will have one of the worst years in the past 50 years in 2009. Having credit cards so easily accessible these days will help some spending for people. But many of those people are just spending debt, not real money, and that will eventually catch up with us.

Even though we aren’t seeing a massive sell off right now, the fact that the market is not running with this strong rally like everyone expected, shows me that there is a lot of speculation and doubt still, even in this bull season. If we don’t see a run to end this year, that could set up an even worse beginning of 2009. In any case, I am still bullish in my short positions and will continue to buy them as prices get lower. FXP and EEV were both fairly strong throughout today’s trading, even with the upcoming rate cuts. SRS fell today but recovered, due to some strong gains from some REITS and house builders. I picked some more up at $104. Overall, it was a good day for me today, which is a good sign for me in this bull season.

I believe the next big problem after we figure a lot of the banking stuff is inflation. This could be a global inflation. That’s why I am trying to stock up some commodities in the next few months like GLD, GDX, POT, SLVR. We may see interest rates creep close to the teens again, ouch! Another thing worth pursuing in fears of inflation is currency trading. It is indeed a bit more complicated, but a lot of money can be made during the right market. If you want to pursue getting into that market, I would recommend this guys online crash course. You will come out a professional. Learn more at Forexmentor.com.


Well, have a good night everyone, Happy Trading and we’ll see you tomorrow.

I think it's pretty clear that bulls are not going to back down for the time being as we saw another day ending in the green, despite some really bad numbers announced in the morning. I strongly feel there is some sort of manipulation happening right now, either with government bailout funds being allocated to market stimulation or PPT movement. In either case, with the data we received today, there should be no cause for celebration and especially buying (in my opinion) for that matter.

Whatever the case, it is pretty clear that someone wants a "Santa Bull", despite still large sell off tendencies throughout the day. The more strange part about it is that we started the day in the red and didn't kick into the green until after all the bad news came out. I guess the PPT likes to sleep in. Even though the rest of the world may be ignoring these numbers that came out today, I am not. These were big numbers that are not good for us in the coming months. ISM's (Institute for Supply Management) sector index got slashed 7.1 points to 31.3, a record low for this 11 year old index. This is a very bad number. On top of that, it is a number that points to the future. We won't see the effects of this decline for a few months, which makes me wonder how this would influence someone to buy.

On top of that, our ADP employment(private employment) fell 250,000 instead of an expected 205,000. Another wrenching number. Then to top if all off, Paulson continued to stress that the outlook for 2009 is not good and that he already wants access to the remaining $350 billion that is left of the bailout fund to use at his discretion. We are running out of bailout funds. My prediction is that he'll be back in his seat in front of congress asking for a trillion dollars within 3 months. The debt that is surfacing is too much to count. And just wait until all of the 5 year, very highly leveraged, commercial real estate conduit loans that were purchased between 2003 and 2007 start coming due. It is going to be another heyday for banks, just like the housing market.

As I said yesterday, its hard to say what is going to happen here in the short term. As long as there is this bull manipulation going on, it doesn't matter what is announced, we could still go up. However, I still believe that it won't last, and when these new numbers finally do get factored into the market, it should hit us pretty hard. I really think we should be in the low 7000, with our current state of our economy. I still plan to stick with fundamentals and put my money where reality is. I have accepted it may be a few months until my shorts are in selling position, but I am in no hurry.

Today, I actually reloaded up on SRS again at $119. SRS is probably my favorite inverse etf and I believe will be the big performer for 2009. I believe there are going to be a lot of retailers and REITS going BK next year. If I can sell at around $150-$160, I'll be a happy camper. I almost want to buy some FAZ right now, because of the grim outlook for Morgan Stanley and Goldman Sachs for the next year. I still believe financials have been over bought recently and have plenty of trials ahead of them. Plus, I believe our government cant continue to bailout every bank nearing bankruptcy.

I have officially put FXP on the back burner and am just going to let it set. I guess I will have to wait until there are mass public riots, so that people will begin to see the real trouble going on in China. Chinese stocks received more love today, when their government flushed capital into some of their major banks. All of these quick moves that the Chinese government continues to make just reiterates how bad off they are.

I am still continuing to make strong gains on my UYG, DIG, and Apple options. If we continue to rally through this week, I will probably begin selling those off by Friday. Friday is a key day to watch. Recently, we have seen Fridays ending in strong rallies. However, this Friday we may receive the worst news thus far, with the new unemployment numbers. This number should be very, very bad. Even though expectations are low, when reality settles in, it should jolt the market quite a bit. This is something that effects the consumer more directly and can hurt sentiment. However, in this market, you never know what's going to happen.

Stay on your toes. Volatility is still increasing, which always makes me nervous. There is a reason they call it a market crash. Not a downwards trend, or a hill. A crash hits when people least expect it, or when they think the worst is over. And on any given day, I feel that we could have a crash. I don't think it is very likely at this time, but it makes me comfortable to have some short positions. Have a good evening and Happy Trading.

Well, we are continuing to see less and less fundamentals factored into market trading everyday now, as these violent jolt in movements is not healthy for a market to sustain. These swings can most definitely lead to a market crash, if some stability isn't found soon. The most dangerous part about it, is how quickly it moves. Once again, we saw ridiculous movement the last 15 minutes of trading. This trend of everyone waiting until right before close, ultimately distorts trading volume and makes for a very unhealthy market. As we saw from Monday, this volatility going the wrong way can do a lot of damage in 15 minutes. The scary thing about it, is people may not have time to react when it moves. These trends make this a very dangerous market.

As a result, I am staying put with what I have for the time being. I'm pretty well hedged either way, with a bulk of my positions still in short. With the continuing large mood swings of the market, for the most part I'm sitting back until we start to see some real trends come. Last week we talked of a good possibility of a strong early December rally, which I still believe could still very well happen.

I was surprised to see the market bounce back the way they did, especially considering the news that came out today. Staples got killed with earnings, but leaped in share price, because it was above market expectation. Toyota, Sears, and Ford were also slaughtered in earnings reports, but also received much love in today's rally. Fundamentals have left the building. People are trying to turn the Dow into a penny stock market, which as I have said before, is very dangerous. As we saw yesterday, investors take a reality check ever so often, and when it comes, it comes hard. I am still as confident as ever in my short positions, although they continue to struggle. Why?

Australia had a large rate cut yesterday, matching their 6 year low. This contributed to banks getting strong gains today. These short term gains are all seem to be based on speculation and nothing actual tangible. The down days are entirely opposite. In the end, the market seems to trend in the direction of actual market conditions, even though there are blips in between. Everything hinges on the financial markets, which is why the rest of the market usually follows suit. Without lending, our economy can't progress. The recovery of these lending markets are not anytime soon. Banks are having a very difficult time balancing their balance sheets. It will take a while and a lot more than $700 billion to clear the air of all the bad debt the banks are stuck with.

Well, the auto industry only needs $38 billion to get back on track. While they're at it, why don't they send me a couple million. I personally feel the auto industry would be better off filing chapter 11, reorganizing, let the government take over their pension accounts, and look to the future. These bailouts aren't going to do anything for these businesses. And these are our tax dollars their giving these guys. Oh well, I guess I will have to live with it.

I am hoping for GDX to come down closer to $20 so I can get back in it. I am very bullish on Gold right now as I fear inflation is our next problem. However, I think if it can come back to $22-23, that's good enough for me. I also may pick up some YHOO for the IRA, which if you haven't opened one, you can open an IRA with free trades monthly at Zecco.com. It's only a matter of time until they get bought in my opinion. They aren't going under, no way. With a buy out, they will quickly pop back to the $18-20 range. Even if the buyout is not this year, in a normal market, its a $30-$40 stock, easy.

I did sell a lot of my SRS this morning at $157, which was strong gains for 4 days (bought @ $120). During this little rally period, I am going to tighten up on my sell point for SRS. With FXP and EEV getting dragged down with these global rate cuts and stimulus packages for the time being, I am looking to SRS to pick up some slack. I plan on buying at the $120 range and selling at the $155 range. With the daily volatility of this stock, it provides me some good opportunities to ride the bumps. Plus, I still believe real estate will have its worse year in 2009.

So until then, I plan on keeping what I have. If we do indeed see a strong rally push through these next couple of weeks, I will sell all of my long options and gear up for a downfall that I believe is eminent. People still may think we've factored "bad news" into the market already. I very much disagree. I just believe the average investor doesn't know just how bad the bad news is yet. There is still plenty of bad news to come this week to spark a sell off, but I can't dare speculate what this market will do right now. Just need to wait it out a bit. I hope everyone has a good evening. Happy Trading and we'll see you tomorrow.

Just as a crack addict must eventually come to terms with reality and "sober up", so it is with the stock market on this "Cyber Monday", directly following the Thanksgiving weekend. I am sure what many thanks people had this weekend are all but gone when they saw the close of the market today. Well, maybe not everybody. In only one day, the market is more than half way back to our recent set bottom after enjoying a whole week of gains last week. This is what I have always been preaching, when economic news isn't on your side, it's a tough battle to win.

So it seems as if not all the bad news had been factored into the market, which is what some were starting to believe. Now, most everyone is in agreement that we still have a ways to go until we reach that bottom. Of course nobody knows, but lets hope next time people are slower to jumping on this bottom band wagon again.

So why today? Well, first off we had the profit takers. In a bear market, a week long rally is more than you can ask for and if you didn't take any profits on your longs, than shame on you. Second, they're officially proclaiming that we are now in a recession, which shouldn't be that earth shattering for most of us. They say that this recession started in Dec, 2007. Still, hearing it out of the horse's mouth always hurts a bit more. China continues to have problems as their PMI (Purchasing Manager's Index) reached a record low, falling from 44.6 in October to 33.8 in November. These kind of reports are beginning to make analysts very skeptical of China's ability to maintain their 10% growth that they are constantly reinforcing. As time goes by, China is continuing to show more and more of its true colors.

As a result of today's antics, we saw huge gains from every short in the book. Financials took the lead with SKF being up almost 30% (FAZ up over 40%). SRS also finished strong as did FXP and EEV. This combined in giving me a very healthy day of gains across the board. Of course my unsold long options took a hammering, but those losses were easily outnumbered by my very large gains on the short side. It's days like today that I am very glad I sold some options last week!

Today's performance doesn't look like a 1 day fluke. This heartburn could continue throughout the week. Expect world markets to get slaughtered this evening and there is nothing but more bad news tomorrow. We could return back to that 7500 region very quickly.

More big news to consider is Governor Schwarzenegger declared California in a state of "fiscal emergency" and called a special budgeting meeting with lawmakers to discuss the next few months. Believe it or not, California risks bankruptcy and even hints of the thought will cause a very negative reaction to the market. If these troubles are taken further, watch out.

Auto sales are released tomorrow, just in time for the big GM meeting. These figures should be record breaking as no one seems to be buying cars. Also, keep your eye out for Friday, as they announce non farm payrolls. This announcement may be enough to put our recent "Rally Fridays" to an end.

In any case, as we have seen from today, clearly investors aren't ready to run yet. There is too many unknowns that remain to make people comfortable investing in today's market. We should see some strong gains from the inverse ETFs this week. The GM bailout may shake things up for a day or two, but that should be over and done with shortly. The market may still rally back in forth for a bit, with us being in this "bull season", but as I have been saying all along, I believe we still have a ways to go down before we go up again. Have a good evening everybody, Happy Trading and we'll see you tomorrow.