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

No signs of breaking for the rally today as Monday's trading closed up with yet another 100+ day for the Dow. Strong performance in commodities helped lift the markets today as Bull's fears of a slow August beginning have quickly vanished. Sure, as always the green markets were once again bought on very low volume, but somehow there continues to be buyers.

As I mentioned would probably be the case on Friday, autos received a lot of today due to early earnings reports, in which showed Ford actually turning a profit for July. This is no surprise due to not only the billions of dollars that was given directly to them from the government, but also from the "cash for clunkers" program that has no doubt caused for a lot of transactions in automobiles. I'm sure that will also resort in more credit defaults as well.

Historically, August has been a month of "moderate" gains for the market. However, during times of rebounds, it has shown in times past to produce quite higher results. I can't say I believe that this will be the case for this August, especially having our markets already in a considerably overbought position. Also, something interesting to note is that this Friday will be the exact same duration from when the rally began during the Great Depression and when it started to crash again. Even though such coincidences most likely bear little significance, the similarity is interesting and worth noting. If markets are crazy enough to rally yet again tomorrow, I will definitely be pulling on some short positions. I expect to see a rather strong day of selling this week, especially as profit taking kicks in. Happy Trading.

My answer is clearly, yes. Sure, you will never hear it on the popular airwaves such as CNBC or from Mr. Cramer, but I don't see how we don't call our current economic condition a depression. Putting aside the disaster in the stock market, there are still countless reasons supporting the notion that we are living in a depression. The government likes to announce such things several years after when we are out of the bad times on the way back up, but as for me, I'm calling it now...We're in a depression.

Comparing our current conditions to The Great Depression of the 1930's is much like comparing NBA players Kobe Bryant and Wilt Chamberlain. Both are many times considered as one of the best to play the game of basketball. Although Kobe's best scoring game is 81 points in one game, compared to Wilt's 100 points in a game, there are many that feel the 81 points was a more impressive number when analyzing the current conditions each of the players played in. I believe this scenario is much the same when comparing the two time periods of the 1930's to our present day.

Numerically, times looked a lot tougher back in the 1930's, but I have arguments to say that we have it just as bad. Sure, the biggest argument was that we reached almost 25% unemployment rate by 1932. Even though we are currently only lingering in the 8-11% region, depending on where you live, I still think that number is almost just as devastating in our current economy. Think of all the sectors and industries that have been created since the 1930's. We have countless numbers of opportunities available that were never even thought of at the time. I would think an unemployment number in the 15-17% range is comparably devastating to that of the 25% in the 1930's.

Preceding the most devastating years of the Great Depression were the banks failing in 1929. Following the collapse of banks in 1929, we saw GDP get increasingly worse from 8.6% in 1930, 6.4% in 1931, and then 13% in 1932. I believe the financial collapses we saw happen last year with Lehman, WAMU, AIG, Bear Stearns and others were even worse than those of 1929. We are already falling at similar numbers dealing with GDP, between 6-7%, so we mark very close in those numbers.

The Dow fell about 89% from its highs to lows by 1932. Even though on paper, we are between 55-60% down, many of the stocks that are in the Dow have fallen 90% or more and all at a much faster rate. It took 3 years before to make it fall, we're only in year 2.

So as you can see, I am not very optimistic for the time being with the conditions of our market. This doesn't mean that I can't make money. It just means that I need to be very careful on the moves I make, because in my mind, we're worse off than the 1930's. Even though we don't see it in the "slums", with massive homeless counts, the perfect storm that is over us is one that our country has never seen. We can thank our new government and the Fed for preventing many of the problems that existed in the 1930's, but similar problems remain.

At this point, I am sure that some old man is pointing his finger at me, saying "you don't know what it was like, I lived it, and nothing compares." Sure, that may be true, but from a numerical standpoint, we're not that far off. Scary times and I'm sorry to the old man.

So, these are reasons why I'm not jumping into the market right now or kicking myself in the face for not being more heavily loaded up on shorts. Sure, I would have loved to have been more beefed up to take advantage of the recent slaughtering that took place the past few weeks, but I have my reasons for not doing it and sometimes it is those reasons that save me from getting killed. I guess it's kind of like the old saying that the only 100% way to avoid STD's and pregnancy is by abstinence. Well, I'm currently abstinent from the stock market. This is a scary market to be playing right now, so I'm double crossing my T's.

Even with all this chaos, believe it or not, I still think a March rally is coming. I just don't think the market is ready to crash. Indeed when it is, some may think I'm crazy, but I think we could reach 300 S&P levels. I know, it seems crazy, but so did a 600 S&P level a year ago. If indeed we match those great depression numbers we are looking at 2-300 S&P levels and 2-3000 Dow levels. So, as you can probably tell, I'm not going long for a while. If indeed we do end up rallying, even 15-20%, this would even more solidify my feelings of a more severe crash, as it will be in alignment with many of the deflationary models. So for me, I try to tune out all of the nonsense playing on the TV (they're just trying to keep their jobs) and pay attention to the numbers.

Tomorrow is so, so critical. After the devastating response from bears today and the massive sell off, bulls are needing a rally tomorrow. Unfortunately, they have a big beast standing in their way called unemployment. Yes, the number will be bad. But we have seen in times past that bottoms are sometimes established on bad economic news days. Also, if by chance the number comes in better than expected (which I don't see likely), the market could take off very strongly in a rally.

So, yes, another very early day tomorrow. It has been frustrating waiting in the sidelines during all this craziness, but I believe it will pay off. My Zecco.com account is waiting to go short, I'm just waiting for the right time. I am still loving SRS though! I'm glad I stuck with it and SKF. SRS has a Market Club report score of +70! Very strong (get your own symbol analyzed for free, all you need is a name and email, Click Here)... So, we wait tomorrow. Have a good night, Happy Trading and see you tomorrow.

Did this look like your mall this past week? Well, probably not quite, but I definitely noticed a lot thinner crowd circling the stores these last couple of days. Retailers were hoping for a miracle coming into this last week before Christmas as sales continued to be sluggish week after week leading up to the holiday. Well, it seems as if that didn't happen. It's funny, media and analysts won't call it what it is. It must be the weather that prevented people from shopping this year, or everyone is waiting for the week after Christmas, for the sales. Come on, can we just face the fact that we are heading into one of the worst financial crisis of the century, and many folks aren't going out and buying that extra computer or coat that they did last year. The more they try and cover it up, the more they become vulnerable to devastation. Either way, as the magic 8 ball would say regarding retail for 2009, "Outlook Not So Good."

Early reports from MasterCard are showing retail sales down for November and December anywhere from 5.5% to 8%. They contribute a large portion of this to the 40% decline in gasoline prices, saying that in reality, the number is closer to 2%-4%. Do keep in mind that this is still with the fact of huge discounted prices we saw this year, which will cause profit margins to be slashed. So, when calculating actual net income, the number has to be pretty scary.

Whatever it may be, people just weren't shopping that much. Not only were they not shopping as much, but when they were, they were not going to malls. Amazon is claiming to have its best holiday season yet. As people are becoming more discount aware, they are flocking to the online discounts. I am looking for companies like amazon to make a big push the next couple of years. The biggest barrier to E-commerce was the lack of comfort many people (mostly older) had from buying from online vendors. Well, people are now biting the bullet, putting their prejudices aside, and going where the discount is. I had to people in my immediate family who had never even thought of shopping online before, get most of their gifts this year from online retailers. I'll be keeping my eye on more e-commerce companies like Amazon and Overstock for potential buys for my portfolio. We could see a strong push for these companies in 2009 and 2010.

Overall, the day as a whole was pretty boring and lethargic. I assume most people won't be back at their computers trading until at least Monday, if not after New Year's. The Dow finished up another moderate .56% with the trading volume at about 86.6M, extremely low. At any rate, I don't see any big moves being made until the volume comes back.

It is not good to see these early signs of suffering from the retailers as it should only get worse in 2009. I expect this to directly affect SRS, as vacancy, in my opinion, for commercial retail will surely bounce anywhere from 15-30% depending on the market, which should lead to a lot of defaults on these conduit loans that come due this next year and in 2010. This is why I chose SRS as my number 1 pick for 2009, despite the few negative articles which have been written on the inverse etfs. I feel very comfortable with it.

Well, we all have a lot of things to discuss in the near future as we begin to tackle this beast called 2009. I appreciate the input from all of you. There are a lot of smart investors out there that can bring some great concepts to this forum. Please feel free to contribute and share your own successes. Also, several of the readers of this site have joined up with Lending Club, the p2p lending site we discussed last week. I would also like to hear from those that have and any successes or frustrations you have had from them. As I have heard from few, it has been a great source for some serious returns(anywhere from 6-15%), which may seem impossible in this market, which is also why I would like to hear from you that have been involved. Please comment below and let us know of your experience, and if you're interested in joining, see Lending Club for more information.

I hope everyone had a great holiday. There should be some serious discounts at the malls this week, as retailers will be desperate to liquidate some of this year end inventory to pay for their new inventory purchases. So get out and get some goods. Happy Trading.

Just when everyone thought the market was finding its footing and becoming more stable, once again we see aggressive volatility back in the market. The lead up is much similar to the one we saw leading up to our lowest point back in mid October. This causes me to speculate a little and discuss some interesting concepts.

As we know, there is a lot of technical analysis that goes into analyzing market trends and movements and determining bottoms and capitulation. The vertical rebound we experienced Thursday, and the volatility of Friday has set up the perfect scenario for what many believe are the gates to capitulation. So I thought I would share what I have learned.

The "G20", consisting of major global emerging markets leaders, are meeting this weekend to discuss the global crisis and maybe some possible resolutions to slow the bleeding. Some expect a small band aide announcement will be made, causing a strong emotional rally on Monday. From there, many technical analysts feel that this is where we will see the bottom fall out. Some expect it to drop like a tank. By analyzing graphical trends, some believe we could reach anywhere from 6500-7500 by the end of next week and experience our first capitulation of this recession/depression. Bear in mind these are technical analytics that may not apply to this crazy market we're currently in, but it's good food for thought.

So what did I do with this news? Obviously, I am keeping my shorts. Thankfully, we saw FXP gain back a lot of ground it loss from Thursday. As expected, we saw a massive sell off the last 5 minutes before the market closed (probably from the mass hedge fund liquidations). All the other usual suspects for inverse ETFs did great as well. One new one I am adding to my list that I have been eyeing (probably picking some up on Monday) is EEV. EEV is an inverse ETF shorting the emerging markets sector. Now, with the "G20", involving many of these emerging market leaders, we should be seeing some good gains out of this as we continue to see these quick fixes fail. We see similar trends with this ETF as we do with FXP, but it seems to be holding up slightly stronger.

Considering that I feel we could be in for a short term rally on Monday, I picked up some DIG options on Friday, expiring in December as well as some more of my .QAADB April expiring Apple options. With this volatility coming back, I'm looking to play both sides a little bit more. I am not 100% sold of this technical prediction, but I feel good about picking up these options at these prices anyway. If we do indeed get this rally on Monday, I will look to liquidate all of my long positions, with the exception of maybe my GDX options and throw my profits into EEV and some SKF or SRS. I believe next week will be a pretty monumental week. I think we will see A LOT of activity go on. So stay on your toes and try and catch the openings and closings of the market. That is usually when the deals are. Thanks to those that commented, I enjoy your insights. I hope everyone has a good weekend and Happy Trading. We will see you Monday.