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

On Tuesday, China recovered slightly from another devastating day of trading. On Monday, however, The Shanghai Composite closed down just under 7%, as deflation fears and slow oil demand worried investors. This marked for the second large sell off for China in just two weeks. It is clear that deflation risks are hitting China at the core due to their large dependence on manufacturing and exports. Even though US markets have not reacted much to the global concerns, if such problems continue, we can be assured that selling pressure will increase.

The Dow opened up down this morning and traded down around 100 points throughout the entire day until the famous remaining 15 minutes, in which markets were able to recover a bit. Commodities are in serious risk of quickly depreciating prices and puts on metals, potash, and especially oil sound real appetizing at this point. In tonight's premium podcast (subscribe here), I also discuss some reasons banks are stalling on foreclosures and why this is problem for our economy in the future. Happy Trading.

On Monday, Disney announced that indeed they struck a deal with Marvel to purchase the company for $4 billion cash. In the deal comes over 5,000 Marvel characters that Disney will own the rights to. As a result, Disney shares were down, while Marvel shares jumped over 25%. For Marvel investors, $30 cash will be issued per share owned, as well as .745 share of Disney stock for every one share they own of Marvel. At present value, that puts the value of Marvel stock near the $50 mark, which was the big cause for the jump today.

Well, we've seen the wrap up of yet another day of low volume, back and forth trading that conveniently closed the Dow up about 37 points for the day. It is very clear the unorthodox movings of the stock market has scared most investors out of the market (including myself). Even bulls are having a hard time pulling the trigger as we saw one of the lowest days of volume yet. We do need to factor in it being August and a very popular time to travel before the kids go back to school and I expect, as time goes on, many people will be forced to sell and liquidate as many consumer business continue to be strapped for cash. I do feel the still the present risk of deflation is a real risk that could cause a big turn in the market and is beginning its course.

Today, the FDIC announced that its list of distressed banks rose to its highest level since 1994. At the end of June, 416 banks were numbered on the FDIC's "problem list", which is pretty strong jump from the end of March's number of 305. What tickles me is that despite such big and large profits that many of the banks have supposedly been turning the past few months, the distressed list grows larger and larger at a rather aggressive rate. You can smudge the numbers to make them say whatever you want with altered accounting standards, but in the end, that pile of defaulted loans still stares the banks in the face. In tonight's premium podcast (subscribe here), I will discuss more problems that face the banks in coming months.

In addition to the expanding list of bad banks, the FDIC also reported a quarterly loss of $3.7 billion compared to last year's profit of $4.8 billion. The FDIC insurance fund has been drained of about $50 billion to about $10.4 billion (all that remains) in just a year. As times continue to struggle, which I believe they very much will, we can be sure that fund will be maxed out. It is no wonder that lending is scarce with banks right now (which if you are looking for a reasonable consumer loan, Lending Club could be a great option to look into).

Like I've said before, despite the recent gains on wall street, industries (including the financial sector) are still racking up massive losses. There is only so much investors can absorb until they are forced to sell. We are heading into the last quarter of the year, which as we saw last year, can be a scary time for wall street as it is usually redemption season. Cash has been looking very good to me as of late. Happy Trading.

Markets traded mixed on Wednesday and once again ended with the miraculous end of day rally to push the Dow slightly into the green once again. However, the past few days have shown us that definite uncertainty remains with investors as volume remains extremely light, and selling is becoming more and more prevalent. Unfortunately, I still believe manipulation exists with such low volume levels, which continues to make it an unnerving market for me to invest in at the moment.

I wanted to discuss an interesting benchmark that I track that many overlook. In fact, CNBC actually talked a bit about it today in a good article, however, you had to dig a bit to find it. Click here to read more about it.

The Baltic Dry Index (BDI) is an index measuring shipping activity along 20 of the world's biggest routes. As a result, many economists use the index to measure overall demand of goods. I really like this indicator, because I believe it is a good measure of consumer progression (which is the biggest contributor to GDP growth). Also, conveniently, it has an almost flawless record of predicting recessions.

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Despite all of the big gains we've seen on Wall Street the past few months, the BDI has been consistently declining since June, which as a whole, has been about a 43% decline. The indicator has found to have a large influence on China's economy, which since August, The Shanghai Composite is down 16%. The large decline in the BDI is believed to be largely due to lower demand of metals, which in turn could be a very strong indicator for a near deflation, which I have feared. Believers in this demand measure fear that more economic problems are headed for the US and the global economy and recommend investors to take higher cash positions.

This is just one more indicator that has been thrown to the side as we have seen nothing but green in the markets. As unpopular as the index has been, like I said, its track record is impeccable in predicting recessions and usually is directly related to consumer demand. One more caution for those believing we are out of the woods. Happy Trading

The White House Budget Office released their "revised" calculations of the current state of the economy, as well as the future outlook and recovery. Amazingly, (I hope you sense the sarcasm) the numbers for 2009 performance are much less than originally anticipated, as is the numbers for the predicted recovery. It was only a few months ago that the White House was calling for a end of year recovery. However, now they are predicting a 2.8% contraction for the economy as a whole for 2009, which is more than doubled their earlier projections.

In addition to that, they still are predicting a recovery beginning in 2010, however, they're prediction is now a 2% growth for next year, compared to the initial 3.2% estimate. The office is also expecting the deficit to rack up an additional $9 trillion more of debt from the periods of 2010-2019, which would essentially be doubling what we started at in 2009.

I remind you, these are the INTERNAL budget projections, which usually are set much more favorable, even more so in uncertain times. Slowly, the economy is forcing the government to whittle away at these initial projections and to come back down to earth. If they are budgeting for $9 trillion of deficit spending, I can only imagine what that actual number will be.

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The market got off to another quick start this morning due to some favorable consumer confidence and homes sales data. However, much like yesterday, buying has slowed down as the day gets closer to close due to increasing concerns. Volume remains critically low. Happy Trading.