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

I thought this picture would be appropriate, as this is what I think investors are doing who feel like it is time to buy. Wow, today smelled a lot like manipulation again. Maybe the Fed felt like they had seen enough red lately. Whatever the case, the market had no business being up over 2% today. By the way, since we have been discussing Lending Club lately, the P2P lending site that can generate 10%+ returns, I saw that they were featured on CBS news, see here. I plan on lending just a little at first to see how it works. I will keep you all updated. As CNBC headlines said today, stocks are probably not the place to look to make money for 2009, unless your short (in my opinion), so I encourage any other options that can bring me good returns.

Well, Uncle Sam extended their arm again today to the dying American autos, which seems to be the cause of the buying spark today. I don't know how people take this as good news. Late last night, the Bush administration allocated 6 billion dollars to GMAC, GM's equity in auto to help in assisting to better their bottom lines. Now, GM claims to be able to give loans to lower credit customers and issue car loans anywhere from 75-80% LTV, compared to their recent 40%. Ha, we will see about that and just how long that lasts.

Tech had strong gains, as they seemed to have been killed the past week. I still think tech is one of the most vulnerable to this worsening market, as most technologies are a luxury. People will probably not by that extra computer, or the suped up processor chip this year. It's back to basics for me and my IRA for 2009. McDonald's, Wal Mart, and Johnson & Johnson are some of the only companies I dare hold long for the beginning half of 2009.

Of course, people choose to ignore other news, that in my opinion, affect our economy far greater than people's ability to getter better loans on a new Suburban. Consumer confidence fell to a record low in December, having the index fall to 38 from 44.7 from November's numbers. This is largely due to the huge job loss we have seen the past month. As layoffs are sure to continue, I expect the confidence to get even worse. Yes, even with Mr. Obama at the helm. Employers chopped 533,000 jobs in November alone, the most in 34 years. Yet, there are some out there that feel it is time to buy. Go on ahead. I can't even begin to think why that is the case. We have some serious tough times ahead of us.

Not only did that hurt, but the prices of US single-family homes in October fell 18% from last year! So this surely squelches some people's hopes that maybe the housing market was reaching close to bottom. I think not. I have said it before and I will say it again, the housing market led us into this catastrophe and I believe it will lead us out. I don't see any light at the end of the tunnel as long as housing prices remain at record lows.

So we move on. I think today was just a short term fluke, as people cheered Uncle Sam's intervention and hope for more. These days can be crippling to the market in the long term, as I feel some people are duped into buying, even though there are serious negative data released that needs to eventually be factored in. Oh well, you never know. Investors may entirely ignore these continual, harsh economic conditions, but I very much doubt it.

I expect to start seeing some serious drops in the Dow the next couple of weeks, before we start to work through Obama's honeymoon. As we grow nearer, I will probably look to pick up some longs to ride that short bubble and pick up some quick gains, but we'll dive more into that as we get closer. Have a good night everyone, Happy Trading and have a good evening.

Well, so far it seems as our S&P test we discussed last week has proven to be correct thus far, as the market experienced another down day of trading during the holiday week. In the morning, it looked as if we maybe would have a day in the green, but sure enough the sellers persisted as the Dow closed down 1.18% today. In fact, I believe we are lucky that it is a holiday week, because if we had higher volume levels, we would maybe be seeing these numbers doubled, as our volume is about half as much as it usually is. Either way, I think it's safe to say that we have definitely flipped momentum since Friday and have some downward momentum for the time being. Now, how long that lasts, who knows with all the government promises that are announced every week.

Despite the down market, some of the shorts, like SRS were down. This may have caused some frustration for some of you. The main reason for today's drop was that SRS, along with others, were funds announced today by Proshares that distributed a dividend. This was the main cause for the down day, coupled with this still lingering bailout issue for commercial developers. I still believe we should see a lot of strong days for SRS here in the near future. You can see a full list of the funds that are distributing dividends here.

FXP had yet another strong day of green as low oil prices and failing banks continue to punish Asia. Many investors are taking their profits from the end of the year rally we just had as well. The selling could continue strongly into 2009, as stability continues to deterriorate.

American Express got a little piece of bailout money today, receiving $3.39 billion from the Fed. I can't complain about that, as I feel that short term lending is something that can help the market a bit. However, I still feel that people should not be bailed out of their existing credit card debt, unless it's me of course. In any case, another company to add to my list of companies I have ownership in.

Other woes to hit today's market was another month of worse than expected home sales. This should be no surprise for anyone, as consumer sentiment is weakening and a lack of lending still exists with the banks. Many people think the housing market will reach bottom during the end of summer/fall of 2009. I think it may be a bit longer than that. They also announced today the suicide of a hedge fund executive who lost millions in Madoff's scheme. That kind of news can't help the already suffering hedge fund market. Either way, there is not much to cheer for this week. Autos were slaughtered today, continuing from yesterdays bad Toyota numbers. At this rate, all three of the companies will be out of business before New Years.

In any case, the rest of the week should be much of the same as we have seen the last two days. We may have a little green day soon, just to reverse the direction for a bit, but I doubt if it will be anything substantial. Remember, tomorrow is a short closing day, so make sure you don't miss the close. As for me, I am holding back at the moment, until the volume comes back after the holidays. I feel I am in a good position for the direction we're heading into 2009. This is a good week to take positions, if you haven't already, as volatility is down due to the holidays. Have a great night tonight, Happy Trading and I'll see you tomorrow.

Well, our rally streak has ended, at least for the DOW, as we saw it close down just under 26 points today. The Nasdaq remained strong today with the help of some better than expected earnings the past few days from tech companies like RIMM. In fact, if any of you are looking for some quick ways to way money, I found an interesting site where you can borrow from other people or make money(up to 19% return) by lending to other people(all secured). It's pretty interesting and worth checking out, It's called Lending Club. Hey, even in a recession, there's ways to make money.


The S&P barely closed up, ending today at 887. As we discussed yesterday, 920 was the magic number for all the graph and trend analysts. Many of the formulas and trends they use to determine this number is much too left brain for me, but they can definitely help in showing direction of trends. Closing today below 920 is suppose to show that the Christmas rally is done with and we should start heading the other direction. As I have said before, take this information how you may, as they can be wrong, but I do give them credit, so we'll see how next week makes out.

Seeing that we opened up a little fickle, despite the auto loan approval made me more believing that indeed we may have reached the end of this holiday rally. I mean here we had our usual Friday rally day, great news with the 17 billion auto loan to be approved for Chrysler and GM, even good earnings news for tech, and lowering oil prices and we still ended down today. So I definitely think, at least for now, momentum has shifted.

So with me believing we have the bears returning, I decided to make some moves today. I put a decent amount of cash into SRS at $61.00. Being that retailers, despite being downgraded by banks, had a push today, I felt like it's just too low for me to pass up. In fact, I actually transferred some of my FXP investment into SRS, it being my favorite of all the etfs right now. I do still see a lot of upside for FXP, it's just with SRS at $61, I can't pass it up. So, we'll see how that goes. It may go down a bit more in the short term, due to our recent huge rate cut, but with the woes heading for commercial real estate next year, I can't help but to love this fund.

I still think Apple is a bit undervalued, considering that RIMM performed well on earnings recently, and the Iphone has been outperforming Blackberry in mobile phone sales. Sure, Apple's computer sales may be down, but their product mix is so solid, I can't see them hurt too much during these times, especially with their cash balance. We'll see though, I still own some April expiring options.

So, I am now mostly out of my longs, with a few remaining GDX and Apple options. I personally feel that during next week, we should start to trail off. Maybe not too much with Christmas in the mix, but I definitely feel we're close to retesting the lows we've reached already. Hopefully, I can regain some traction on my short position as my latest buys seem very low. I hope everyone has a good weekend and is gearing up for a holiday. Go shopping this weekend, retailers are having RIDICULOUS sales (especially Macy's) to try and stimulate money spending. I am sure it's been a pretty slow December thus far. Happy Trading and we'll see you next week.

It seems as if our market is developing a bit of a pattern, “Freaky Friday” and “The Monday Blues”. It’s as if people actually go out around town and see exactly what is going on in our economy over the weekend and come into Monday with low expectations. Then during the week, the market places a trance over them into thinking that everything is just fine. I mean come on, we just had one of the biggest frauds pulled off in US history on Friday, and the market didn’t even blink twice. Sooner or later, all of this bad news needs to be factored in.

There wasn’t much of a fight today, like we saw all last week. It pretty much stayed in the red all day. It didn’t help that Bush warned auto makers that a bailout was not a sure thing. Only that it is to be considered. Plus, President Bush has bigger things to worry about, like getting hit in the face by Iraqi shoes (watch the video if you haven’t seen it, it’s hilarious). Either way, a passed bailout may cause for a short term rally, but should have no lasting effect on our dying economy. There is a lot to look out for this week that could cause some serious momentum in either direction. We’re getting close to the end of the year, and we’re hearing of more problems day after day.

On the bright side, look at Gold! Like I’ve been saying, I love GDX. Even with the down day it has the wherewithal to be up close to 6%, hitting over the $30 mark. If you scroll back to the post when I was buying it, it was at $19. With the government continually printing new money to bail out every Tom, Dick, and Harry, we should continue to see gold’s value go up and up.

OPEC is meeting this week to discuss a possible supply cut. I think there is a good possibility of the dissolution of OPEC, with growing demand problems. Soon, it will be a blame game of who should be cutting supply more, Saudis? Russians? Iranians?. In turn, the countries may choose to go their separate ways during this financial turmoil. At any rate, they don’t like oil being under $50 a barrel, so I am guessing something will be done with them. Keep your eye on DIG.

Well, we’re slowly but surely hacking our way back up with the inverse etfs. SKF and FXP both performed strong as there were doubts with financials thanks to the Madoff scheme. China continues to struggle as doubts loom over investors. With worries of government instability as well as the possibility of riots, what recently was labeled the savior economy, China, is looking to be a sinking ship.

The Fed begins their meeting tomorrow to discuss the possibility of a rate cut. Like I said in last weeks post, don’t be surprised to see a disappointing number come out of that meeting. The market would like to see a 50 basis point cut to the rate. However, I feel that The Fed will show the US that they cannot expect aggressive rate cuts every meeting, even in our current financial fragility. Sure, it may cause some drama in Wall Street, but hopefully will show investors that every meeting does not mean another 50 basis point hack to the discount rate. The Fed has also given hints to maybe not expect a big cut this time. It’s kind of like taking morphine. Sure, it dulls the pain for a bit, but later we’ll wake up with a bigger headache and worse pain then when we started.

Some key earnings this week are Best Buy and Goldman Sachs tomorrow. I would expect Best Buy to have pretty bad numbers, since I don’t see them that far off from Circuit City. I would also expect Goldman to have less than par numbers after the JPMorgan announcement last week. GS is before market, and Best Buy should be during the day sometime. Watch financials go tomorrow. If the numbers are indeed bad, we could see a 20% run in SKF, providing a solid day for the shorts. This could set the mood for the rest of the week.

Morgan Stanley, reports the following day, and I would expect them to follow suit. I can’t see them being any stronger than GS. If for some reason positive news comes out of the big Investment Bankers, than watch the market run. We have seen the potential for some upswing during December, and positive IB news could give some fuel to the bull. I don’t expect it, however, never rule it out.

The bear is growing hungrier by the day and I believe soon we will have some serious red days in our near future. These inverse etfs are still at really low levels and I would be extremely happy to just be buying into them now. If you don’t have a trading account, you can open one and get free monthly trades at Zecco.com.

SRS (up 5.77%) is still my favorite as we saw the extreme loan problem in real estate during 60 Minutes last night (what I have been saying the past 6 months). Depending on GS news tomorrow, it could be a slaughter. Either way, expect a big push either up or down. Let’s make some money, Happy Trading and we’ll see you tomorrow.

Thursday night, the auto bailout was officially rejected by the Senate as there will most likely be no bailout passed before the new year. Wow, what a surprise. Expect a serious negative response tomorrow in the market. World markets are already hurting hard from it. Well, I can't say that I don't agree with rejecting the bailout, I just thought they would pass the bridge loan. Tomorrow should be an interesting day. Have a good night.

I thought since Wall Street is so tagged on these bailouts, I would give a quick update on the status of the Auto Bailout. Well, it is looking that the auto bailout is inevitable and should probably be reaching an agreement this week. Horrific unemployment numbers announced Friday seemed to help disagreeing lawmakers come together to find a way to put money in the auto maker's pockets. After looking at the numbers, the consequence of not passing the bill would force bankruptcy, which then could lead to the loss of up to 500,000 jobs just for November (3 million jobs in the long run). This would cause utter disaster in the market.

The terms of the bailout will most likely be a $15-$17 million bridge loan until March to help get their business back on track. This bridge loan sounds like exactly what it's called. A bridge to survival until Obama is in office and a much more lofty bailout can be drawn up, most likely costing over $100 billion.

GM said they need $4 billion by the end of the year to avoid bankruptcy. Chrysler needs 7$ billion. Ford, being in better financial condition, needs only $9 billion as a line of credit for their "emergency fund." So congress has officially opened the bailout door to industries who are struggling. I see the absolute necessity to bail out the banks, having access to capital lending which I believe is the most critical part of our economy. However, by opening the door to an outside sector, gives all sectors reason to come knocking for our taxpaying dollars. Who's next? Airlines? Farmers? Miners? It's not that I don't feel remorse for some of the failures of our sectors, I just feel we can't keep bailing out anyone who is feeling financial pressures, because during this recession, there will be several. Plus, bankruptcy can be a good thing for some of these businesses. It allows them to restructure their liabilities, free them from debt, and start over. It has been very successful for Delta and other companies.

At any case, they are predicting the bailout to be approved this week. One of the big factors that helped settle the loan problem, was to decide where it would come from. It was agreed to take the money out of the energy fund, as an incentive to make more fuel efficient cars. So I would expect a pretty strong rally the day it passes, even though this has been expected for quite some time. Anytime bailouts have been approved, it has boosted the market for a day or two. However, I still don't feel this is the answer for them. Unless we keep paying their bills for the next 2-5 years, their liabilities will far surpass their revenues.

So congratulations, you all have officially invested into the auto industry. I was hoping maybe we could all be sent a new Taurus or F350 for our generous donation. In any case, this week should be an interesting one. Have a good evening and we will see you tomorrow.

It is sure hard to fight off those bears right now. As much as this market wants to go on a good 8-10% rally, I believe there is too much bad news out there to get the momentum behind it. Even, with most of the major websites preaching that there should probably be a pretty big rally the next few weeks, it just can’t seem to kick into gear. Today, you see a lot of people preparing for the big kahuna tomorrow, unemployment numbers. I think analysts are trying to prepare people for just how bad this number will/could be, so that hopefully when it hits, the market doesn’t sail down and maybe even goes up off of over expectation. I see so many analysts on TV trying to cover up the news we keep receiving and put in under the rug to try and spark this rally. However, I think people are slowly becoming overwhelmed with continual bad news coming out day after day.

Another element making the market nervous right now is the auto bailout meetings. The media is doing a very good job of portraying the bailout as “skeptical” or “not likely”, but I believe there is no way the government won’t strike some sort of deal. In my opinion, people are just trying to lower expectations, so that when it does pass, it will ignite this market. Either way, the outcome of these meetings will most likely jump start the market in either direction, depending on what is decided. Failing to help with a bailout/loan, could ultimately tank the stock market. So my guess, is that they will come to some sort of agreement.

I noticed today, more people seem to be realizing the doom that lies ahead in 2009. Like I’ve said before, I do not know how people could be optimistically buying right now with knowing what could possibly happen to our economy and small businesses next year. Sure you can try to gamble and get some quick gains on the expected bear market rally we may get at the end of the year, I just find it very risky. The market could turn on us at anytime.

I have noticed some performance jumps in some of my IRA stocks that are worth noting and should be pretty safe buys for this economy. I like owning some long positions to stay balanced and try to pick stocks that should weather pretty well to our economic condition. PSS (Payless Shoes) had huge gains today, after posting better than expected earnings. These discount retailers should remain fairly strong (at least not get hurt as much) during the recession. Brands like Wal-Mart, GAP, McDonalds, Coke, I feel are pretty safe bets in this market. As the middle and lower class begins to gain in numbers, there should be more shoppers at these discount retailers. A lot of them got a lot of love today, so I am going to wait for them to steam off a bit before buying some more shares. For all you big profit hunters, this may not be your cup of tea, but I enjoy having some safer long buys in my portfolio as well.

Retailers that I plan on staying away from are stores such as: Best Buy, Office Max, Staples, Sit down restaurants (Brinker, etc), Nordstrom, and others. I believe retailers(especially electronic and high end clothing) will have one of the worst years in the past 50 years in 2009. Having credit cards so easily accessible these days will help some spending for people. But many of those people are just spending debt, not real money, and that will eventually catch up with us.

Even though we aren’t seeing a massive sell off right now, the fact that the market is not running with this strong rally like everyone expected, shows me that there is a lot of speculation and doubt still, even in this bull season. If we don’t see a run to end this year, that could set up an even worse beginning of 2009. In any case, I am still bullish in my short positions and will continue to buy them as prices get lower. FXP and EEV were both fairly strong throughout today’s trading, even with the upcoming rate cuts. SRS fell today but recovered, due to some strong gains from some REITS and house builders. I picked some more up at $104. Overall, it was a good day for me today, which is a good sign for me in this bull season.

I believe the next big problem after we figure a lot of the banking stuff is inflation. This could be a global inflation. That’s why I am trying to stock up some commodities in the next few months like GLD, GDX, POT, SLVR. We may see interest rates creep close to the teens again, ouch! Another thing worth pursuing in fears of inflation is currency trading. It is indeed a bit more complicated, but a lot of money can be made during the right market. If you want to pursue getting into that market, I would recommend this guys online crash course. You will come out a professional. Learn more at Forexmentor.com.


Well, have a good night everyone, Happy Trading and we’ll see you tomorrow.

Well, we are continuing to see less and less fundamentals factored into market trading everyday now, as these violent jolt in movements is not healthy for a market to sustain. These swings can most definitely lead to a market crash, if some stability isn't found soon. The most dangerous part about it, is how quickly it moves. Once again, we saw ridiculous movement the last 15 minutes of trading. This trend of everyone waiting until right before close, ultimately distorts trading volume and makes for a very unhealthy market. As we saw from Monday, this volatility going the wrong way can do a lot of damage in 15 minutes. The scary thing about it, is people may not have time to react when it moves. These trends make this a very dangerous market.

As a result, I am staying put with what I have for the time being. I'm pretty well hedged either way, with a bulk of my positions still in short. With the continuing large mood swings of the market, for the most part I'm sitting back until we start to see some real trends come. Last week we talked of a good possibility of a strong early December rally, which I still believe could still very well happen.

I was surprised to see the market bounce back the way they did, especially considering the news that came out today. Staples got killed with earnings, but leaped in share price, because it was above market expectation. Toyota, Sears, and Ford were also slaughtered in earnings reports, but also received much love in today's rally. Fundamentals have left the building. People are trying to turn the Dow into a penny stock market, which as I have said before, is very dangerous. As we saw yesterday, investors take a reality check ever so often, and when it comes, it comes hard. I am still as confident as ever in my short positions, although they continue to struggle. Why?

Australia had a large rate cut yesterday, matching their 6 year low. This contributed to banks getting strong gains today. These short term gains are all seem to be based on speculation and nothing actual tangible. The down days are entirely opposite. In the end, the market seems to trend in the direction of actual market conditions, even though there are blips in between. Everything hinges on the financial markets, which is why the rest of the market usually follows suit. Without lending, our economy can't progress. The recovery of these lending markets are not anytime soon. Banks are having a very difficult time balancing their balance sheets. It will take a while and a lot more than $700 billion to clear the air of all the bad debt the banks are stuck with.

Well, the auto industry only needs $38 billion to get back on track. While they're at it, why don't they send me a couple million. I personally feel the auto industry would be better off filing chapter 11, reorganizing, let the government take over their pension accounts, and look to the future. These bailouts aren't going to do anything for these businesses. And these are our tax dollars their giving these guys. Oh well, I guess I will have to live with it.

I am hoping for GDX to come down closer to $20 so I can get back in it. I am very bullish on Gold right now as I fear inflation is our next problem. However, I think if it can come back to $22-23, that's good enough for me. I also may pick up some YHOO for the IRA, which if you haven't opened one, you can open an IRA with free trades monthly at Zecco.com. It's only a matter of time until they get bought in my opinion. They aren't going under, no way. With a buy out, they will quickly pop back to the $18-20 range. Even if the buyout is not this year, in a normal market, its a $30-$40 stock, easy.

I did sell a lot of my SRS this morning at $157, which was strong gains for 4 days (bought @ $120). During this little rally period, I am going to tighten up on my sell point for SRS. With FXP and EEV getting dragged down with these global rate cuts and stimulus packages for the time being, I am looking to SRS to pick up some slack. I plan on buying at the $120 range and selling at the $155 range. With the daily volatility of this stock, it provides me some good opportunities to ride the bumps. Plus, I still believe real estate will have its worse year in 2009.

So until then, I plan on keeping what I have. If we do indeed see a strong rally push through these next couple of weeks, I will sell all of my long options and gear up for a downfall that I believe is eminent. People still may think we've factored "bad news" into the market already. I very much disagree. I just believe the average investor doesn't know just how bad the bad news is yet. There is still plenty of bad news to come this week to spark a sell off, but I can't dare speculate what this market will do right now. Just need to wait it out a bit. I hope everyone has a good evening. Happy Trading and we'll see you tomorrow.