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

Republicans and Democrats are not the only people drawing lines in the sand and not wanting to budge. We are seeing a pretty divided stance on the near term movement of markets. I have been to several economic forecast meetings in which very highly respected economists discuss their near term outlook of the economy and it surprises me that I have heard many different stories from all of them.

This perfectly explains the volatility of the markets. In fact, some people change their minds day to day. Whatever it may be, their currently exists major differences of opinions among highly regarded economists and corporate CEOs.

For some, the debt crisis in Europe, combined with the monumental debt piling up in the US is only delaying the inevitable. That being another dip in markets. For others, record low interest rates, strong earnings among manufacturers, and more liquid banks is priming the market for more of a rebound. The one thing that most will agree, is even if we do trend upwards, that will be a very slow growth.

I am encouraged with recent earnings from manufacturers, however am discouraged with many of their "restructuring" plans for 2012. With the latest earning reports, many US manufacturing companies released a restructuring plan for 2012 in which they will be looking to scale down operations as well as cut certain jobs. All seem to have the same answer when asked why. Because they are unsure of near term outlook. They would better be prepared than be caught by surprise.

What worries me most is how sluggish the current economy is, while enjoying record low interest rates. In fact, without such interest rates, I believe it is safe to say we would be head deep in a depression as of now. They are the lifeline that has kept us a float, barely. However, this cannot last forever. How long will the government extend this benefit while stockpiles of debt continue to grow? That of course, will be the big question as we go into 2012. The government has made it clear by both words and actions they will take ANY action necessary to keep markets flowing. Whether or not that will come back to haunt us is a big subject of debate.

At any rate, I see commodities finishing strong to end the year. As risk and uncertainty continues to rise, commodities will go stronger. I see a lot of opportunity in some of the emerging market sectors, but I will go into much more detail about that in a later post. Happy Trading.

Stocks have rebounded quite nicely since September's trading woes. Two weeks ago, trading was looking quite grim with not a lot of optimism. However, markets have had some good trading days and bounced back. Beware of falling into the trap of going long too soon. There still remain a lot of discouraging signs in the market that could push for another sell off. Consumers are sensitive and just the slightest negative pressure can turn optimism into pessimism.

One big thing to keep eyes on is the VIX levels. We have seen quite the spike in the VIX (volatility index of markets), which mostly leads to downward trading in the long run. We saw record VIX levels in 2009 when markets reached lowest levels. The theory is that the more uncertain traders are, the more sensitive and volatile they trade. In fact, just in the past two months, we have seen several +/- 1% Dow trading days. It has come down a bit this past week, but still remains in high levels.

After months of upsetting their subscribers, Netflix announced this week that they would not be splitting their streaming and DVD company up. Recently, Netflix changed their subscription prices, charging significantly more for those wanting to continue receiving DVDs. In addition to the price change, Netflix announced their plan to divide the company and retain the streaming service under the Netflix name and create a new company (Quickster) to house the DVD business line.

Customers responded to this move with even more anger for the company, which resulted in some loss of subscribers. After a few months, Netflix finally gave into the complaints and hacked the Quickster company, keeping the two businesses under the same roof.

Throughout the duration of this debacle, we have seen a tremendous drop in Netflix's (NFLX) stock price. After reaching highs of well over $300, the stock almost reached the $100 mark this past week. Investors have begun to question the decision making ability of the company's leaders and whether or not they have the ability to continue strong growth.

Additionally, Amazon is starting to show its big, ugly face around the corner as a massive competitor of Netflix as they just recently announced their new Tablet as well as their growth in streaming content for their Prime users. This is another influencer for selling NFLX.

Personally, I believe the stock has been a bit oversold at this point. Much of the reaction has been emotional, which tends to reach far beyond the point of logical valuing. The point is, Netflix still controls the largest amount of streaming media content, which will always bear the largest subscription base. If Netflix can keep this trend, they should continue strong growth. I threw some of their stock in my account on Monday. Happy Trading.

A new week begins, and considering what happened last week, there was a lot of anxious investors awaiting the opening bell on Monday. Warren Buffett made it easier on everyone by announcing his plan for Berkshire Hathaway to begin purchasing back its own stock. This move is very interesting, as it is usually Buffett who is critical on companies who initiate to do so, accusing them of "propping up" stock prices for their own companies. He, however, said when there is added value, the move can be very worthwhile for investors. I guess the the market agreed, as Berkshire Hathaway A traded up nearly 8% today. However, it still remains down over 20% for the year.

Buffett is not the first to initiate buybacks for his stock. In fact, 2011 is already one of the highest volume of buybacks ever. This does not necessarily lead to upward trading in the overall markets. In fact, the largest year for stock buybacks was in 2008, which as many know, was the year that also marked the extremely large drop in the markets. The takeaway is, indeed companies buying back stock can be a very good thing for investors and often causes a short term pop in the price, however, it definitely does not guarantee big returns for that particular company.

Markets took a tumble last week as Bernanke announced his newest stimulus plan for the economy. Many felt that the proposed plan was much less than expected which caused a strong retreat in markets on Thursday. Fortunately, markets have recovered a bit since. However, a negative sentiment is still looming over Wall Street as new home sales continue to remain stagnant and employment is sluggish.

Kodak is seeing record drops in their stock price, as investors' concerns are growing in regard to their ability to reposition themselves as a "printer" company. Risky investors are hoping that indeed the sell off is too aggressive and hoping for a small buy back. At this point, they are clearly at high risk, but where there is risk there is a possibility of good reward right? Too risky for my blood.

We are reaching a very pivotal time in market trading, where the next few weeks are really going to set the stage for institutions heading into "redemption" seasons. We saw the massive sell off in gold on Thursday, as hedge funds were forced to sell, needing to show profits for positions. This indeed could be a trend in the near future, leading to me cool off on the gold investment for the short term. Time will tell. Happy Trading.

The past month has been an eventful one in the stock market. It almost feels like 2008 again. I almost thought the day of 500+ point daily drops in the market was over, but as I have always said, this fragile state of the market we continue to wade in, not much is required to shake things up.

Debt problems in Europe continue to apply pressure to domestic markets and US has their own basket of problems with their own debt. We have been a kid at a candy store with mom's credit card for the past two years, and collectors are beginning to come knocking. Anyone who believed that we would cruise out of this recession as we have, with minor scratches, was drinking too much government Kool-Aid. The fact is, is that our economy was hinging on borders of depression and that true unemployment spiked to over 20% in some states and that we have now sailed out and are having consumer responses as they were in 2006... Be assured, this is a mirage.

No doubt the government is prepared to battle any new or unforeseen crisis that hit our economy, but if they continue to do so with mindless spending and stimulus, we will find ourselves in a debt hole that is far to deep to dig out. VIX levels are on the rise, which is an alarm clock for bears... Also, high volume levels, which has been bulls' biggest ally, are finding recent record lows. Are we pivoting the market as we speak? I only see a couple scenarios.

The continual trend that we continue to see is the inverse relationship between the dollar and the stock market. As the dollar decreases, we see corporations outsource manufacturing and production which in turn ups their bottom lines, lifting stocks. However, as dollar values rise, foreign purchasing goes down, lowering net income, which causes for a downturn in the market.

With record low levels for the dollar, it is hard to see how it can dip much further. Of course, there is the rare the case that these two could head in the same direction, which would be a very paradoxical event, yet it is possible. If that is the case, it could cause quite the stir in markets.

The Fed has reiterated their plan to keep interest levels low for however long it takes. Many felt that this was the year we would see the hike back up, but it was not meant to be. Banks have forgotten what it is like to have to pay interest on loans and to earn their margins. They have enjoyed the life of free printed money for the past two years and I fear that when the day comes to reinstate interest rates, banks will have quite a problem. Of course, the government does not worry about such things, as much like the stock market, the government is only concerned about the present and not the future.

Keep an eye on the market the next two months, because it will be a telling one. Many bulls may find themselves wishing they would have cashed in on those big gains... I have. Happy Trading.

It seems as if every new week brings in a new generation of the economy. As we now deal with a global economy, there is so many different occurrences on a weekly basis that effects investor sentiment, that it can be hard to keep up with. At any rate, despite inflated energy and food costs, consumers have kept spending into the storm and morale seems high. Quite honestly, I do really know if this a good thing or something we will pay for later, but for now, long stocks are reaping the benefits.

Looking at some influential data, the rising stock trend may keep on a bit longer. Here are some outside influences that are point to a continuing rising market in the near future:

Bonds in Possible Trouble
Bonds have definitely been the comfort spot for many people during this past downturn, and frankly, the past couple of decades. Yields have steadily risen and made many of their investors happy. Thus, there has been a lot of investment taken out of stocks and put into to bonds, which is another reason why we saw such a strong drop in the markets.

Well, the appeal for bonds could be changing. With financial markets continuing to look more stable, it is only a matter of time until The Fed begins to hike up interest rates. This will directly effect Bond rates and may cause a bit of a retreat into stocks. If the retreat is severe, expect stocks to get a pretty strong bump.

Individual Investor Sentiment Down
It kind of sounds like an oxymoron, however it carries some weight. There constantly exists an inverse reaction of Institutions and private investors... When one believes things are good, the other is fleeing for the hills. As for me, I like to be on the side of the institutions, as they definitely throw their weight around much more and thus drive the market in a stronger direction.

As of late, there has been a lot of negative sentiment with private, individual investors. With this usually comes a more bullish move from larger funds. Don't be surprised to see some large blocks trade within the next few weeks and some violent bumps in key markets.

Japan Back on Their Feet
The stall in production that has occurred in Japan due to the earthquake and tsunami has had a global effect on markets, especially the tech industry. Well, latest data shows that indeed Japan has bounced back from recent production stalls and actually is ramping up production and is seeing some pretty strong growth numbers. This translates into a very favorable factor for upward stock movement and is already effecting momentum.

The realist side of me continues to look at the economy with fear, knowing that any large amount of bad news could very easily change momentum of this recent strong climb. Markets continue to be in a VERY sensitive state, and thus far, we have been very fortunate not to experience anything too catastrophic that could send consumers back to saving their money (that sounds funny). However, the above influences should continue to drive markets upward for the near future.

At any rate, the game plan SEEMS to be working at the moment, when looking at the stock market, but there still remains plenty of problems that need addressing. The stock market is not a true gauge of the actual state of the economy, it is only the perception of stock buyers. As of late, it has been the manipulation game of big banks. My advice, don't put all your eggs in one basket, as it is hard to tell where the money is going at this point. Happy Trading.