Market Retests Lows... Market Crash?

obama foreclosure"Owners of capital will stimulate the working class to buy more and more of expensive goods, houses and technology, pushing them to take more and more expensive credits, until their debt becomes unbearable. The unpaid debt will lead to bankruptcy of banks, which will have to be nationalized, and the State will have to take the road which will eventually lead to communism"

The above quote has been getting a lot of press around the internet, saying that it is a direct quote from Karl Marx, from his works Das Kapital written in 1867. After looking into it further, it is indeed a Hoax and never was in his writings. I did, however, still find the quote applicable to our current markets and actually agree that we are heading closer and closer to "communism" everyday. So we will see how that all plays out.

What a day, right? I was able to share in today's decay with several of you on the chat up until close and marveled at it's selling force, especially closing out the day. I kept waiting for one of those mid-day profit taking bumps to bring the market back up, but the sellers kept dragging it down. My account was bleeding green all day as my shorts were soaring and even some of my longs.

A penny stock, alternative oil (Origin Oil [OOIL]) and R&D company I invested in early, got a huge bump today (+20%) as they announced that they were partnering with the US Department of Energy in plans to work together on future projects. The company is working on the process of growing and transferring Algae to oil. Keep an eye on that one for you penny stock lovers, as it could continue to go up the next couple weeks. If you are interested in a bulk investment, email me ( and I can put you in touch with the CEO. The DOE is a great partnership to have going into the future. See for more.

We finally saw the S&P close under 800 today, which is a pretty big technical move. It will be interesting to see if the market is able to sustain these numbers at this time. From a technical standpoint, we aren't seeing the set up of a crash. We are very close, just not quite there. The deflationary down-spiraling is not quite there, from a technical standpoint, for me to be comfortable to take a full position in short. In fact, technicals are actually pointing towards a good possibility of a rebound rally.

As you remember back in November when we reached our previous lows, we saw the market pull a huge 180 degree turn, spurring a 20% rally for the Dow over the next couple months. I do not want to get caught fully short on another 20% Dow rally (as some of you know, is not pretty), which we are very capable of. Indeed, if we do rally back up strongly, the deflationary technicals will be much more favorable for a massive sell off crash. At that point, most would believe the bear is dead and a much more devastating crash could very well happen. At that point, I will plan to unfold a very aggressive short position. This is the technical analysis I have gotten from analysts and the numbers so they are not guaranteed. If indeed we blow past the bottom and maintain there, obviously we will have overruled the technical side. But I will wait and see.

President Obama plans to speak tomorrow concerning his new plan to help slow the massive foreclosures that is plaguing the US. With the right kind of announcement, this could indeed be the action that causes the sharp turn around and propels the market on another bear market rally. However, failure to impress the public on this announcement, could indeed be the bullet that sinks the sub. So, tomorrow acts as a very critical day for investors and what we should expect from the market the next couple weeks.

Tomorrow I plan on waking up early, and buying into some decent, volatile longs to hedge against my shorts. I plan on buying these with a lot of the profits I have made the past couple of trading days off the shorts. One crazy long play I have been eyeballing is Las Vegas Sands Corp (LVS). The Market Club report is -100 (get your own symbol analyzed for free, all you need is a name and email, Click Here), but it is nearing its 52-week low again and has been known to bounce off it. It's a gamble, but if a rally is in our sights, it's bound to get some very big gains. That is one of my more riskier plays, but I plan on going in and buying some longs tomorrow.

The autos are causing noise again claiming they may need $30 to $60 billion more to sustain and not go bankrupt. It will be interesting to see how our government reacts this time and if they are as forgiving. I don't see this causing much noise in the market tomorrow, but is definitely worth noting.

So get a good nights sleep tonight. Be up bright and early and get ready for some action. Either way it should be a violent day, the market is getting antsy. Remember, 1 more week for the $200 Lending Club promotion, see here for more! Happy Trading.


  1. ___ Says:

    I still think the key for the market rolling over will be a changing in sentiment of The Crowded Long Known as Tech.

    HPQ reports after the close.

  2. Anonymous Says:

    We should really keep ourselves updated.Thanks for sharing your thoughts.Good Day!

  3. Anonymous Says:

    That Marx quote is a HOAX. He never said any such thing, in Capital or anywhere else.

  4. Finance Fanatic Says:

    Yeah, I ended up finding that out. It was indeed to good to be true!


    Resourceful post