Banks Bounce Back Thanks To Obama Fever - Apple Crushes Earnings

geithnerIt didn't take long to get speculative hopes back in the market. Today, the market got off to a bit of a slow start and even went red for a bit, but after the remarks of Geithner (the new secretary), investors felt a lot more comfortable with the future of the banks. Almost everything that was taken away yesterday was given right back. I was very happy to have sold out of most of my SKF before the aftermath, however, SRS had a much less than stellar day and I chose to hold on to those, my mistake. I did get the gains I was finally looking for out of Citi, but not much after the crash yesterday. It did help the banks that many of the CEO's bought back lots of shares to help instill confidence. I still ended up quite positive in my Zecco.com account after the two days and look to reboot my strategies as we are kind of at ground zero again. However, I think I am going to transfer some more money over from my ING Direct savings account to trade with, as the next few weeks could be prime for good money making.

It is funny, because during the interview, Geithner did not want to speculate on timelines and likely avenues the government would be taking, saying that by doing so in the past had caused premature speculations and radically effected the market. Well, even by avoiding the questions, he was still able to help radically move the market. How ironic. People are looking for the slightest bit of hope to help spur optimism.

So even though the Obama rally showed up a day late, it's here. Now, how long will it last is the magic question. Anytime momentum like that is stopped in its tracks and reversed to the degree we saw today causes some serious jolts in technicals. Although this rally should and could very well lead on into tomorrow, there are some deafening news that could reverse this day of high hopes. One day of Obama in office did not make the bank crisis's everyone feared yesterday go away. The debt outstanding is still substantially more than they can handle, and commercial vacancies haven't even hit half the number they're expected too. We're not out of the woods yet.

Google announces earnings tomorrow. This outcome could provide a big influence on where the market moves. With massive budget cuts, be assured that "online advertising" is one of the first things crossed off the list. Being that advertising revenue is a bulk of Google's earnings, they may struggle a bit. We lucked out this week with not much economic data being reported, but tomorrow we do have housing starts, which I cannot see being a strong number. That could effect some trading, but I don't expect it to be that influential. People should be clinging to headlines tomorrow to try and pull out any sort of negative or positive perception they can find. Whatever the case may be, I think the outcome will be very volatile, bouncing from red to green and higher volume. Did you see today? 408M trading volume, wow. This is the most we have seen in a while. With volume back and volatility increasing, we're heading back into market crash danger zone. Stay on your toes.

Apple knocked earnings out of the park after close today, sending after hours trading up almost 10%. This is not surprising to me, as I have liked apple all year (one of my top picks for long). All this news of Job's health and their ability to stay competitive is nonsense. Too much cash on hand and too much innovation. Apple should leap quite a bit and could definitely set the standard for up trading tomorrow. Lets see if Google can follow.

Due to the extreme uncertainty and volatility right now I am playing my bets with energy and commodities. Obama's only ammo to throw at this beast is more government spending (and even that can only slow the pain in my mind). He is going to have to spend trillions just to make a dent. Doing so is going to give gold, silver, and other commodities a pretty face of value. I'm bulling up on a lot of gold, DIG, and other commodities tomorrow to keep during this time of uncertainty. I've lowered my short position (still plenty left) until some definition is back and have a little bit of long financials as a hedge. Either way, tomorrow should pave the way of some new momentum.

Like I said yesterday, don't expect Obama to roll over and die his first few months in office. He should be working around the clock to ways to pump this market up. I still think we're heading to new lows shortly, we just need the Obama fluff to wear off a bit. Below is the market trend score (analyze a symbol here free) and movement for FAZ, which momentum score is still relatively strong at +60.
faz chartfaz analysis
I hope everyone has a good evening. With this volatility, we are able to make some serious cash in quick moves. It's all about timing the bumps right. Happy Trading and see you tomorrow. Check out the new videos at INO TV, great stuff and it's free.

19 comments:

  1. Kevie Kev Says:

    Hey man I love your page. One question though. Do you know who is spamming the google finance message boards with your web address?

  2. Finance Fanatic Says:

    I do not, I thought at first it was a lead generating company I opted for last year, but they claim it's not them. I stay away from those boards anyway, it's 50% spam now a days. Sorry for the annoyance it may have caused you.

  3. Kevie Kev Says:

    No big deal at all. Thanks for all your advice and insight I really appreciate it.

  4. Finance Fanatic Says:

    GM gets another $5.4 billion today of TARP funds. Are you kidding me? Another wasted billions. When will Uncle Sam learn?

  5. Anonymous Says:

    Hello FF
    Been reading your page for a few months now. Just wanted to say keep up the good work.

  6. Anonymous Says:

    Hi Finance Fantastic,

    What is your background in trading? Been following your page for a few weeks... good stuff man! Keep it up!

  7. Anonymous Says:

    You said that you lowered your short position. Do you still expect SRS to hit $120+ levels? Those of us who have been following your site have bought SRS starting at $120 and have been holding on to hope for a while now. It seems to get beaten back every time it starts to get a rally.

  8. Anonymous Says:

    Hey Anon2,

    I carefully studied SRS. It is only good if we have a few consecutive negative days. With this volatility (one day up and the other down), this stock will be killed. There are a few ideas I have and have worked for me:

    1) Write covered calls and collect the premium, or write uncovered way out of the money calls.

    2) Write uncovered calls and put at the same time as the premiums of SRS are ridiculously high.

    3) Buy URE which is cheap, pays dividend, and has a positive outlook in a year, then write covered calls if you are worried.

    It will work out better if you think about the 1 year outlook and average down on down days and have some cash to be able to fix your investment. I also expect some harder times ahead, but you never know, with these bailouts and speculations we may never see the 7500 bottom again. So, many people are looking at it as a buying opportunity.

    Good Luck

  9. Gib Says:

    FF
    Whats your take on UYG I bought in on the down trend yesterday. Didnt quite make the bottom. Hoping to make a few bucks and dump it.

  10. John Says:

    Just want tell you guys and girls yes this is a huge rally but here"s the key it was on Very Light Vol on spy and xlf. What this means is smart money or call them Rich guys and girls are Dumping there shares while the small hands buys it up from them.

    I add more to my holdings Today. I have 20%faz,20%fxp,20%srs,10%GLD, and 30%Cash for value days like today. what a nice pullback for the Bear ETFS nice.

    Know that big crash events happens when you don"t feel it"s going to start most of the time....

    Anonymous said
    1) Write covered calls and collect the premium, or write uncovered way out of the money calls.

    2) Write uncovered calls and put at the same time as the premiums of SRS are ridiculously high.

    Sorry but this Is foolish cause in case of MAGA crash this month or next you must pay the call or put holder a Jackpot Lotto Win on his or her conracts.This is very risky plan and I would never take part of this plan is bad indeed.

    People ask ure ,uyg and fas ,xlf can it go to 0.00 yes they can this cold facts. I dont see any rules upholding on etfs that they cant blowup just like stocks.

  11. Finance Fanatic Says:

    Anon2, Indeed I do still have a lot of SRS and it can be frustrating as it seems to be in a stand still. I agree with Anon3 that continual momentum yields best rewards for SRS. In any case, I choose to keep SRS, because of the serious troubles I personally see in the real estate market. It will literally take hundreds of billions of dollars just to help absorb the upcoming debt. So yes, I am still in it. Im averaged in at about $65 now.

    Gib, good call on the UYG. I plan on selling my Citi tomorrow. 2 days straight green is enough for me in this market to take profits on the long side.

  12. Peisong Says: This comment has been removed by the author.
  13. HFF Says:

    Hey guys here's my 2cents worth. the way i play these leveraged ETFs is to try catch the underlying trend/momentum and seldom hold a position for more than a week.

    Plus i always have a 10% stop loss limit each time i trade these instruments. That way all i need is to be right 1 out of 3 times and can still make a happy profit since my losses are always capped at 10% while my gains of late have been hitting 30-40% each time. been lucky so far

  14. John Says:

    Man the smartmoney burn that fool rally fast today did not even give the bulls a change to sell. Iam glad I add more to bear etfs holdings yesterday on that fool rally FAZ SRS FXP GLD.

  15. John Says:

    I have good news for the Bears and bad news for the Bulls.

    MR.Geithner sayings he wants a powerful US dollar. All of bulls are saying in your mind so what a powerful US dollar is great. Sorry your wrong if you want the government to buy stock in banks the paper will be weak too print large amounts of paper to save the banks. But I see he has a new plan in mind is that some banks go bankruptcy and some get government takeover both ways let the banks stocks go to $0.00.........

    I 100% right MR.OBAMA and MR.Geithner are sleeping with the bears.

    Jim cramer want to tell you something man stop lieing to the people in the year 2000 you short tech stocks till they rollover to 0.00
    stop saying your on the bulls side. I read your book Confessions of a Street Addict.

    you said your most your profits were made from shorting stocks not going long stocks.

    Don"t ever think your going to get your wish ban on short etfs 2x and 3X. Did you forget when Fed and Paulson,SEC christopher Cox put a ban on shortselling in SEP 18 and 19 yes to mass rally 2day ONLY. did it stop the crash no wakeup madmoney and fastmoney people. only for dow fall from 11,483.05 to 7,773.71 in oct. nice a loss of 3,709.34 PTS off the DOW30.
    bans means nothing if markets can"t eat foolstock

    look at the chart and see what iam seeing too.

    http://stockcharts.com/charts/gallery.html?indu

    Yes Obama Change Is Here
    Yes We Can!!!!!!!!!!!!!!

  16. Finance Fanatic Says:

    Got to love the PPT, definitely have woken up now

  17. John Says:

    yeah I know PPT had work and more work with MR.Bush. With MR.Obama they have ton play and relaxing. So obama say"s its time to work today no more play and fun guys and girls Bid the market higher make me feel good today. That"s what it sound"s like to me happening in the white house and washington DC today.LOL

  18. QUALITY STOCKS UNDER 5 DOLLARS Says:

    The big banks have had it.

  19. buy Chanel bag Says:

    The fact is, a very expensive bag that I purchased not all that long ago had a part fall off. In the grand scheme of things, this is a best case scenario when it comes to having your bag break. Getting a new screw and putting it in should be an easy fix.