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

Peer Pressure. It was mostly present during our years in middle and high school, when someone or a group of people were able to convince others that doing something (which usually was bad) would be good for you and help you be popular or successful. Yesterday, it seemed as though many were "peer pressured" into buying after the announcement of the FOMC meeting results, believing that it had to be good news. But was it? I mean over a trillion dollars to go to the purchase of bad debt and US government bonds. It sounds the savior of the economy. Just breathing the words of the announcement caused a huge jump in the Dow. So it has to bee good right? What many didn't see yesterday, may have been shown to them later on as they began to break down exactly what the Fed was doing and what that meant regarding our economy. I don't give all the credit of today's red trading to a change of mind about the Fed meeting, but as it usually does, investors seemed to return to reality.

Lets be honest, financials have had one heck of a run. Sure, they were oversold a bit to begin with, but we were beginning to hit the overbought range after yesterday's trading. Let me give that friendly reminder that, without default, there is a $450 billion dollar gap of debt coming due this year alone for refinance and that is available in the lending markets. Having the CMBS markets and the sloppy underwriting that prevailed in the valuing of the assets, has put us in such a deep mess, not even $3 trillion of Fed spending has put bank's problems to rest.


We saw a big 16% gain from FAZ today as financials finally showed its first strong day of weakness in over a week. I don't think this puts an end to the rally, but I think we've pulled the parachute out. I still think the high 7000's, creeping to 8000, is still very much attainable, before we see some more serious selling. The government is not done handing out its bailout coupons and I think we may find some more of these "false" reasons to cheer. So, although the strong gains from the shorts today could be encouraging for some to jump on in, as for me, I'm holding tight. I do still own my FAZ options from Tuesday, but I'm still catching up from yesterday's slaughter.

I woke up with another treat today. A few weeks back, I had purchased some DUG put options for $25, expiring tomorrow at $ .80 per contract. Well, oil had not performed as well as I had hoped for March, and as of Tuesday, I was looking to write the option off as it was trading for only $.05 per contract. However, with the help of Uncle Bernie and his plan to print our way out of this, we saw very big gains in crude prices yesterday and today. Well, this morning, I was able to sell my options for a healthy profit at $1.15 per contract. If only I would have gotten in at $.05, right? Oh well, I had already considered those funds lost and to end up turning it for a pretty strong profit is unbelievable in my mind, especially a day before expiration.

Gold continues to be on fire and with good reason, as we passed the $11 trillion mark with our national deficit and are still spending like it's 1993 in Japan. In fact, gold passed big technical markers today, which could mean even more gains for gold next week. I have recently mentioned three times now on this site of gold being on my "radar", but had failed to pull the trigger every time. Maybe I'll learn from my mistakes next time.

So, still staying put at the time being. If we see a rebound tomorrow and next week and FAZ, SRS, and QID continue to get hammered, I will look to start buying in lightly into them. Also, buying some GS put options are becoming very appealing to me as well. GS has received a lot of love lately, especially because of their ties to AIG and all the help they've been getting, but at over $100, I think that's becoming shorting season for GS.

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So if you are interested in this promotion, click Lending Club $25 promotion, and following your sign up process, you will begin your investment account with $25 in it. I hope to offer more promotions like these in the future to help stimulate interest in new investment vehicles. As always, I would love your feedback. Also, a new podcast update is available for those who are subscribed, which you can listen to here. If you are not subscribed, you can try it free by CLICKING HERE. So on that note, Happy Trading and have a great night.

The past two days are exactly the reason why I have chosen to sit in mostly cash for the time being. One can easily be sucked into (including myself sometimes) thinking momentum is moving in a certain direction and get slapped in the face with a change of the wind. Like I have said before, the market in this current limbo state is a very dangerous playing field and can change colors in a matter of minutes.

Stocks opened up strong and at one point was enjoying three digit gains. Things were looking good for the bulls and it seemed as they finally were going to pull something out. Well, lately, either the bears have been waking up late or bulls calling it a day early, but the recent trend has been to do nothing but sell the last hour of the market. Within the last hour, we saw the market sink very quickly to where it closed, down 88 points. I was lucky to have sold a lot of my FAZ put options during early trading when they were near their peak at $18.40 per contract. So even with remaining in the rest of the options and my BAC, I can afford to lose a bit from them if they do go down tomorrow, considering the very strong gains I made from my options today. Going into Friday, I don't want to even try to speculate what the market will do, but there are some things to keep an eye out for.

Obama announced the possibility of spending an additional $250 billion on banks from the budget, which is what contributed to the huge rally with financials early on in the day. These joys are continuing to be short lived and are all but gone by the afternoon as most of the banks handed back almost all their profits by close.


New home sales came in lower than expected at 309k for the month. I actually was out today looking at some bank owned homes here in Southern California and there are plenty to choose from. I think this next wave of pain is really going to start digging into the upper class's pockets. It is tough to hide from this storm no matter what class you fall under. Keep your eye out for GDP tomorrow, which should be pretty bad. PMI is pretty critical too, especially as being an indicator for the future. We find ourselves in a big day for news tomorrow, which lately, has not been good days for the market. Remember though, it is a Friday and we definitely have seen the ability of the market to rally, so I still don't find it a market with much definition for the time being.

S&P continues to stay above November 20 lows, which continues to show strength for a rally. Now if we see the S&P go below, and sustain, we could be in for one scary ride. I'm not going to rush it though, because if it's the crash I think is coming, there is still plenty of money to be made on the downside. So I will see what market does tomorrow.

So I did actually make a move today believe it or not. Towards the end of trading, oil began to go down. So I went in and bought some April expiring DUG put options, which is essentially buying DIG (Proshares Ultra Oil ETF), as I think oil definitely is waiting to jump a bit. OPEC is keeping a tight hold on supply right now, and rising gasoline prices is showing a slight increase in demand. So I think I got in at a good enough price. So I will keep you posted on how that goes.

FAZ/FAS have almost become text book for day traders the past few days. It seems like the thing to do is pick up FAS right before close, ride it up about 10% until mid day trading the following day, sell and buy FAZ for another 10% pop. Sure, it has only been a two day trend, but it has worked like clockwork. So, I'm sure a lot of you heavy day traders are having your fun with those. FAZ has a Market Club report trend score of +55, so it's been down trending (get your own symbol analyzed for free, all you need is a name and email, Click Here).

I'm on the road a lot tomorrow, so I will try to be on chat when I can. I'm gonna hop on later tonight and discuss Asia on chat, which is currently getting killed due to horrible recession numbers. Days for FXP could be coming back. It will be interesting to see if the negative news over seas bleeds into our trading tomorrow. Happy Trading and we'll see you tomorrow.

Yesterday I discussed a move I made to buy into FXP, an Ultrashort ETF fund, that shorts the China Stock Market. For more about this ETF click here. Yesterday the buy in was close to $90. Currently it is trading at $101.39, up 12.92%. I plan on holding this for a bit until we see it hit $120-130. This is one of several ETF shorts I have been playing, which, as you can see, have been performing very well and act as a great hedge for your long securities that you may still be holding onto to not take the loss. Today, the market is reacting to a variety of poor earnings reports, which, in my opinion, there will be a lot of this month. With that, Apple (AAPL) is down close to 5%.

Don't lose faith in Apple quite yet. I still like apple as a buy, especially as a call option. I think they should weather well on their earnings report today after the close and we should see a good 6-15% jump in their stock tomorrow. Of course there is always the chance they do not perform up to market's expectation, I just don't find that very probable with their fundamentals. Pending on earnings reports tomorrow, we could see a pretty healthy rally, especially in the NASDAQ.

Another play worth noting is oil. In playing oil, I play the stocks DIG and DUG. DIG is an Ultra Long choice and DUG is shorting the Oil sector. Oil has taken a beating this past month, reaching their 52 week low. It is down another 5.71%, reaching $70 dollars today. A lot of this is due to lack of demand from Countries like China and India, as well as the weakening dollar. However, OPEC, the body which oversees Oil production, has a critical meeting tomorrow where they will decide if they will cut production of oil, and if so, by how much. I am expecting a pretty decent cut in production, which should cause some upward momentum in oil. DIG is currently trading at about $30 per share. Consider bulking up on some DIG share for a nice healthy bump tomorrow.