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

Well, it wasn't the announcement I expected (thinking it would be the GM bailout), but its resulted outcome is similar to what I expected. The government announced that they would back up Citi's assets which was a sight for sore eyes for financials. Financials took one of the nastiest beatings of history last week as we saw several banks heading below the $5 stock range.

The announcement caused, once again, another one of these aggressive, emotional rallies which sent prices flying. Goldman, Morgan and Citi were all up over 30%, while UYG was also up close to 30%. This drive in financials brought the rest of the market up while people began to see some optimism in trading. Talks of what I like to call "The Obama Bush" stimulated some confidence, as people feel they are united in providing another band aid, I mean bailout before the end of the year. However, I still believe we are no where near the bottom.

Sometimes I find days like this comparable to an acid trip or some other form of distorted reality. Off of speculative news, people are able to forget all the problems and failures going on across the country (and world) and believe we are all well again. This is why you should not mix emotion with investing.

All the shorts took a beating today, which means one thing for me. They're almost ready to be bought again. SRS and SKF took massive beatings, which made me grateful for getting out of my SRS position on Thursday. FXP was also down with the mix, but held its own far better than most of the others. EEV took a hard beating, due to the strong week opener in Europe yesterday. I did pick up some more EEV at $80. Even if it continues to go down in the short term, I think this is a steal for this fund. Even though the shorts have been beaten hard, it only takes 2 to 3 days for them to bounce back. I probably should have sold more on Thursday just to get the gains and re-lower my basis, but hey, you can't always get it right.

On the bright side, my long options went off once again today. I made 30-40% in every single one of my long options. GDX remained resilient as did DIG. Also, I finally got the love I was looking for from UYG. See, in one day you can see your options soar. Having these options actually kept me in the green today, despite FXP being down. This is exactly why I hedge with them.

I was very close to pulling the trigger with some of my long options and selling off some of my profits. I just don't think this rally will last for very long. However, these options are what is keeping me in the green right now, so I would rather take the loss on a down day tomorrow, than risk not being hedged for another rally. I may regret it tomorrow, but I still think this bailout hasn't completely fizzled yet. People believe just because Citi gets bailed out, all of the other banks are saved. That's impossible. All it will take is another big bank going under to tank financials again.

We do have a lot of forces pointing to a down day tomorrow. We have the consumer confidence report, which could shake things up a bit. Coupled with that, we could also see some healthy profit taking from the last two days of gains. We saw some sell off hit towards the last few minutes of trading today and on into after hours. If so, I will probably sell out of my UYG options (as that one worries me most) and maybe my DIG options. I plan on holding onto GDX(as well as my Apple), because I still think we have a ways to go with Gold. If we are indeed up another day, I will definitely sell out of my DIG and UYG options, while holding onto Apple and GDX.

The market is just getting more and more volatile, which makes me more and more nervous. It is amazing how quickly people's outlook changes. If you continue to look at the fundamentals and see what is to come in 2009, I don't know how you believe the worst is over. These short term bumps just set us up more and more for a crash. I may have to hang out with my inverse ETFs for a bit, but I remain VERY bullish on them. In fact, if I can see SRS get below $120, I will be back in that Rock Star.

China showed weakness yesterday, especially in their banks, which is why we saw less losses from FXP today. I believe there is a lot more of this to come. World markets should respond pretty well to our jump today, so EEV may struggle again tomorrow. However, keep an eye on these key economic data announcements that come out, because they can put a quick halt to this joyride we're on. I feel very happy about today, considering I have now made a very healthy profit on my call options and hopefully get deeper into some shorts for the downfall. I hope everyone had a good weekend. I will see you tomorrow.

It looks like reality is beginning to settle in for traders around the world as we continue to be caught up in a whirl wind of havoc and bad news. Today we saw that the market has little patience or mercy for the doubts and fears going on in the world. Wow, there's a lot to talk about today...

Today is the first time the Dow has closed under 8000 in 5 years. It dipped below 8000 last month but came back above before the end of the day. Another historical number we saw today was our CPI numbers. We fell 1% for the month of October, which was far greater than expectations and is the single biggest monthly loss in CPI since the index began tracking in 1947. Housing starts fell 4.5%, which was near market expectation (but still depressing). Coupled with that we had a slew of bad earnings report from retailers as well as the auto bailout fiasco which still continues. Overall, it was a bad day for your average stock trader.

These are the things we have been discussing for a month now. No matter what new bailout news we receive, or little light given by government regulators, nature will take its course. And until the government allows it, unfortunately, I believe we will be in this continual roller coaster that can give traders a splitting headache. Not to say that I am a pessimist and wish the economy to crumble. I just saw the signs a while back and know that's what needs to happen in order to get things back on track, so why not make some money on the way, right?

So lets talk auto bailout. I still believe a lack of intervention from the government and the auto companies going under could be the shove the market needs to capitulate, especially now. I don't know if the government is ready to deal with that. I think we will see some agreement happen, even though I disagree with it. But until it does, it leaves uncertainty, which the market hates. Uncertainty and fear are key signs to capitulation.

So what else led to the downfall today? The FOMC minutes were released today from their prior meeting from a few weeks ago. In it they discussed of the probability of negative GDP growth for the next 4 quarters. Even though many of us have already expected at least that, to hear it come out of "The Fed's" mouth causes even more concern. Their suppose to be our super heroes right? You can see their minutes here.

In the midst of all this turmoil, I am still a believer of the good possibility of a rather strong rally in this bear market. In fact, call me crazy, but I picked up some UYG options (.UUFLF), considering UYG was down over 20% today. Financials have taken the worst beating of them all, and probably will continue to, but I just felt like it was low enough to give me some good profits for the next rally. These are those "defining days" I talk about that I like to wait for to buy. That was my only move today. Our "Rock Stars" looked great today. SRS and SKF were both were over $220, impressive. EEV is up to $110, and FXP is closing in on $88 (All were up anywhere from 15-25%).

My long options were down today, but not by much, surprisingly. GDX and Apple are weathering through the storm pretty well. DIG was hit hard do to demand uncertainty. Gold futures were up today and it's only a matter of time when oil is creaching back towards $90. When the next rally comes, they should perform pretty well. Plus, my positions in these are significantly lower than my short positions.

Tomorrow is a critical day. We have seen a lot of resistance at around 7800. If we punch through that bottom tomorrow, watch out. However, being in this fragile state, with a bailout announcement or some positive news, we could see a pretty strong bear market rally. It will take something pretty significant though, I would think. Which ever way we turn, expect some serious volatility and strong moves in whatever direction we're headed. Remember, this is options week, which usually entails some manipulation, so we could see some interesting moves before Friday. Either way, I believe FXP should be at $100 shortly, as China is sure to be dragged down with us in our bad news. If we do indeed rally strong Thursday or Friday, I will look to get out of most of my options and putting them right into EEV.

I hope everyone survived today and that your bleeding green. No one can be 100% right in this market. If you are, give me your contact information. Thanks for the insights with your comments. Happy Trading and have a good night.

Well, as we discussed yesterday, we saw another similar day today that we did yesterday, except for much higher volume and much more volatility. These signs just reinforce my feelings of a near capitulation for the market. We saw the market get off to an uncertain start as everyone tried to digest the earnings report for HP and Home Depot. At first, we saw the market react negatively to the missed earnings, but later in the day, the better than expected report as well with their 4th quarter outlook helped fuel the market back into green.

I also don't find much coincidence that the market pulled a 180 degree turn with about a half hour until close. Some people thought the earnings report fueled it all, or some said hedge funds came in. Looking at the volume influx at the end of the day and the degree of turnaround (as you can see from the chart below), my thinking is that it was good ole Uncle Sam and the PPT. With their current congressional meetings going on discussing the bailout disbursement, we can't afford to have these continual downward days. This little bump at the end of the day and showing that we ended green will do a lot for the global economy tonight. Europe and Asia could not afford back to back days like we saw last night. Also, talks of bailing out the auto industry is becoming more and more difficult. If the government passes on bailing GM out, I don't see them hesitating very long to file Chapter 11. This would be World War III for Wall Street. Speaking of bankruptcy, Circuit City's current Chapter 11 filing will become a Chapter 7 by January. Wait and see.

As you can see from the chart above, notice the steeper and longer slopes toward the close of the market. This represents a higher influx of volume as well as much stronger support on the buy side. This usually represents either a mass rally (which I doubt) or some market manipulation. The way we were heading we could have easily reached 8000 by the end of the day.

With that said, overall it was a pretty strong day for me. Almost everything made me some money. Like I expected from the horror of a day for China yesterday, FXP remained very strong throughout all times of the day. We saw it almost touch 80 today at one point. It did die down with the rally towards the end, but overall held its own pretty strongly. SKF broke 200 today, while SRS was just under it. I also saw some pretty strong gains in my Apple and DIG options. I did not choose to sell out of any of my long options yet, because I didn't feel like this was the "bear rally" I am looking for. I still feel there is potential for a pretty strong bear rally before capitulation. So overall it was a pretty strong day for me.

For tomorrow, I think we have a chance to see this rally extend. Foreign markets should react pretty positively to the momentum swing we saw today, whether it was real or not. This could tee us up for a relatively strong day tomorrow. However, with the GM woes still lingering as well as more retailers that are to announce earnings tomorrow, we could also see a down day. Whatever the case, expect higher volume and even more volatility. With China showing its vulnerability last night, this should now make FXP a stronger performer for me the next few weeks.

Also, keep in mind, we do have CPI and housing starts economic data announced tomorrow. If these announcements are worse than expected, expect a pretty negative response, and vice versa. Either way, my portfolio should benefit on both ends. If we do indeed rally strong, I can sell out of my options and throw them back into EEV and SRS. The market is becoming more and more unstable, which makes me wonder how on earth the few analysts out there that are calling this a market to buy in can justify that. I think we have a bit more defining to do. Have a good night everyone, thanks for the comments and Happy Trading. See you tomorrow.

They fought, and they fought hard. For any of you that have level two and three trading capabilities probably know what I'm talking about. Several times throughout the day we saw strong influxes of buying (my guess from Hedge Funds) trying to get the market in the green...And they almost succeeded. The fact that we are continuing to remain in the red during redemptions week should show the lack of consumer optimism for today's market.

We saw a good bounce in FXP today, closing over 10%. That should at least give some breath of life back to those like me that bought some shares in the low 90's. Just remember, this is a volatile, risky ETF. PLAY AT YOUR OWN RISK! I personally, having played and tracked this ETF for a while now, have a lot of confidence in it. One thing to keep in mind is there are talks of the Chinese government to begin to take stakes in certain Chinese companies. Announcements like these would most likely attract another emotional push in the Chinese markets, but as I have said before, they usually don't last long. This is all just talk, but it is something to keep in mind for those contemplating trading this ETF. I have accepted that we will most likely be up and down for the next couple of months, and then we should see FXP hopefully kick it into gear in December or January. All you have to do is turn on the news to hear the next bad thing happening.

I am straying away from energy stocks at the moment. Two of Tontine's larger hedge funds will be liquidated, which consist mostly of energy and coal. This should provide a saturation of the energy markets for the next while. These are just a taste of the many hedge funds we will probably see liquidated in the near future.

TJ Max was the lucky recipient of lower than expected earnings today, however, they didn't move much today. Congress meets next week to discuss the GM dilemma. I believe there is no way the government will let GM go bankrupt. If they were to allow them go under, this could be something that would cause the market to capitulate. Many analysts believe GM bonds are a good buy for this reason. If they end up getting help, we could see strength back to their stock. I don't plan on playing GM, because I would rather play stocks that rally as a result of a lack of government intervention.

For Tomorrow, it's kind of a toss up. I could see us having a green day as a result of some major hedge fund buying. If Asia reacts negatively to today's market than we could see another day in the red, so keep your eye on that. If we are indeed down again, I am going to look at buying some GDX options around $22 or $23, expiring in April. UYG has also taken a beating and I may go in and buy some $10 or $11 options expiring in April. I have been looking for enough red days to buy up some long options just as a short term hedge for this weird November. My goal is to completely be out of long by mid December. I would like to see FXP reach $100-$110 here shortly to pocket some profits, but I am also ok with being in it for a longer term. I'm sure all the FXPers had a good day today. I don't see a lot of green in the near future, but with government always looking to make a new bailout announcement, you never know. Happy Trading and we'll see you tomorrow.

Last night I went to check the China Index and noticed Hong Kong was up 9.5%, which made me a bit nervous, considering a large stake of my investment is currently in FXP. After investigating, I found that China had executed a close to 600 billion dollar bailout for their market. Well, no wonder. Another emotional stimulate to get people's buying anxiety back...For now, at least. With this week being a critical week for redemptions and with the outlook of retail earnings not looking so good, I believe China saw this as a must for them to try and stimulate the US market.

After realizing the cause of the large increase in China markets, I became excited to be able to buy yet some more FXP. I thought for sure it would have to be down another 20-25% today. When I woke up, I was very surprised to see the little affect the bailout had made on the market. FXP was trading down, but only at around $65. I was hoping for the $50's! Still, this was low enough for me to pick up another large stake. I know, some of you may think I'm crazy, and although this is not my usual tactic to investing, these times bring about different strategies and I don't see a lot of downside in this ETF.

The fact that China just injected $600 billion into the market and we were still down today should show where we're headed. Starbucks has already announced their lack to make earnings today after the close and there will be many more to follow. Kohls, JC Penney, and Wal-Mart are still to come this week, although I believe Wal-Mart will weather pretty good. Having FXP hover in the low $70's for most of the day should show this ETF's resilience. More and more people are beginning to recognize the value of these ETF's as we are seeing trading volume shoot up.

Circuit City made their official "Chapter 11" announcement today, that we knew was coming six months ago. Like I said a week ago, there will be many more of those to come. As for longs, to be honest, there is not many I like at this point. You have your safe bets, Proctor & Gamble, Verizon, Wal-Mart, which will be fine, but are boring, in my opinion. But these next few months, I do not see a lot of green for most companies. I do still like GDX (was up 6% today), SLV and DIG, since I believe commodities have taken too much of a beating recently. Plus, with Obama coming in and shutting down all of the domestic drilling, oil should gain some ground again.

I felt like we could maybe have a rally this week with redemptions on Friday, but today's resistance has made me think otherwise. I believe there is still a lot of market manipulation going on with the hedge funds, so don't rule out a rally yet, but that should lessen after this week. All the inverse ETFs look good. SRS was up 20% and SKF up 10%. SDS and QID are both great buys right now. If you have to go long, right now I would suggest cash, or short term treasury funds (CPFXX or WEOXX). And if you still want to play with Apple or Rim (which are still great companies with good fundamentals), try to at least buy April or May options to give you some flexibility, because there is still good volatility with them, but I would wait until after the holidays for buying retailers.

I am guessing that my FXP buying days are done. Like I've said in previous posts (and I'm sticking by my word), I believe FXP is a $140+ ETF by December/January. It will continue to have its ups and downs until after the holidays. China businesses are struggling, worse than the US. Once the bailout high dies down, they will have a hard reality check. The Government cannot bail out everyone. If GM goes BK, we could see the market hit a new bottom in one day. Unemployment is still on the rise and so is deflation. This mixture was a big contribution to the Great Depression.

You don't have to be depressed and lose money during this financial crisis. Play the bumps right and right now, it's hard to lose going short. Happy Trading and we will see you tomorrow.

This is why I prefaced this week with "Rave Week." News today consisted of:

• Slightly higher than expected job loss reports
• GM and Ford earnings horrible
• Retail sales lowest in 35 years
• Dollar weakening in strength
• Oil went up

And...We close up 248 points; got to love market movers. Today was an early witness of the short squeeze being caused for the upcoming redemptions next Friday for hedge funds. Like I said yesterday, expect this rally to trinkle into next week, however, I do not know how much higher we can go even with market manipulation. The point is, we will continue to see the market not making much sense until next Friday. Sure, most of my gain from the past two days of FXP have was wiped out today, but like I said, I am not expecting this round to last a week. Although, I would have like to see it hit $120 today, there is still no stopping this ETF from hitting the $150 range by January (maybe even multiple times).

So what do I do? I load up more. I am going to wait and see how we react Monday, but if we see FXP go lower, I would love top pick up some more shares. Also, my .QAADB Apple option is getting pretty close to buy price again. I usually wait for that to get down to $10, where then I load up and sell at $20.

We could very well see this market shoot up close to 10000 next week. This does not mean FXP will go to $40. FXP was especially rocked today, because of the strong performance of the China Market last night. SKF and SRS were not hurt nearly as much by the gains today. I don't see FXP going much lower than the high 60's (if that) and if I can get my hands on some shares at that price, I will be quite pleased.

For those that just got into FXP, be patient. It pays off. Today may have caused some to make a mess in their pants, but don't panic. Just as hard as it gets hit it goes up. We are still experiencing some market uncertainty with the elections and these redemptions. Like I've said before, give it a month or two on this go around. We were fortunate enough last time to have 100% gains in a week, but that was a gift. Financials got hit pretty hard today and with talks of a second bailout being discussed, UYG is a good stock to look at for next week. I still like GDX, even though it was down today. STP was up over 20% today. Solar should remain very volatile until Obama is in office. This stock is still very undervalued.

So not the kind of day I was hoping to end on for the week, but what could I expect from Rave Week? Next week should be interesting and I would love to see the S&P get a strong bump so I could load up on SDS. If we can see these shorts get slammed next week, that will tee us up perfectly for loading up for the end of year. There is no stopping the storm ahead. Have a great weekend and I will see you on Monday. Depending on the weekend, I may give a Sunday evening update. Happy Trading.

If your long in the market, you're probably hitting your head against a wall wondering why you didn't sell two days ago. It's amazing how one extra day can kill you in this market. And tomorrow looks like it's not going to get better. Earlier today, we saw the market react to negative earnings reported by a variety of big retailers, which I expected. Wal-Mart was the one of the few that actually beat market expectations (because now even the rich people are shopping there). In addition to that, there was a vast array of rate cuts all throughout Europe, many of which were disappointing, which ending up crushing commodity markets like Gold and Oil. Our trading volume has increased since earlier in the week, which makes me think even more people are selling than before.

If you are long, don't jump off a bridge quite yet. With a strong need of a short squeeze before next Friday (hedge fund redemptions), I believe there is a very good chance of a pretty strong rally early next week. So even though tomorrow may be worse than today, stick in there until next week. Our inverse ETFs performed great, as always. We saw FXP close above the $100 threshold already. For those that followed me in getting into it has seen a nice 15-20% gain in a few days, and we still got a ways to go.

Unemployment numbers are set to be announced tomorrow and it looks bad. Analysts are expecting to see a loss in 210,000 non-farm payroll jobs for the month of October. They are also expecting to see a rise in the unemployment rate from 6.1% to 6.3%, just this month. If the numbers announced are worse than these (which I believe they will be), good night. We could be in for another 500-600 point loss again. This shouldn't be bad news for those of us who loaded up on FXP and SRS, but not too good for those going long.

For tomorrow, stay with your shorts. We should see strong gains from all of them. SDS, the Ultra short ETF for the S&P, has been performing great. That is one to be following as well in this mess. Now depending on where we look to close tomorrow, believe it or not, but I am going to look to get into some long option contracts. Like I said, I believe we're in for a pretty healthy rally before next Friday, and I wouldn't mind riding part of that train back up again. I will be looking to get back into some DIG January contracts, probably around a $37 strike price, as well as some GDX and UYG options for April. I will only be doing these if we see a pretty down day tomorrow. The options give me the flexibility to win back any losses I may get next week a lot quicker, because of the leverage. But that sword cuts both ways, so watch out.

Now, if by some miracle we report better employment reports than expected, this could propel this rally to begin a day early, sending the market way up. So keep that in mind. We could see this short squeeze rally take us near 10000 before next Friday. I don't plan on selling any of my FXP (unless it hits $120 tomorrow, which then I will take some profits out), because after next week, FXP should be trading in the $120-130 range. The most important times of the day are at 6:30 am (PST) and about 1:45 pm. Like I have said before, the market has been know to swing 400 points in the last ten minutes of trading, so try to catch those times. Tomorrow should be a good day for FXP, SRS and SDS, which makes it a good day for me. There's good money to be made out there and I hope your tapping into it. Happy Trading and we'll see you tomorrow.