Stocks May Rally - Halloween Sparks Confidence

Despite continual economic woes, we still see the marketing battling hard to stay above water. This is exactly why I said we're heading into "Rave Week". On the bright side, even in the up day, we still saw FXP take a little hop from yesterday's closing. That should show you the resilience of this ETF. Today, the market broke a critical barrier of 9300, which some believe was a threshold the market needed to beat to see a healthy run. Many believe that the market may rally close to 10000 this next week because this threshold was reached. As for me, it's Rave Week, so I won't bet on it.

I am very happy to only be in FXP currently. In fact I would not mind a healthy rally on Monday to send the shorts down further to lower my basis. Currently, SRS is becoming very tempting at $115, but I am going to continue to wait until it is under $100.

As I have said before, historically, the stock market takes a little bounce after an election and with the short squeeze on going with the Hedge Funds, we are set up for a nice little rally. Even though I am predicting a rally next week, I am going to wait on the sidelines and only stock up on my short position if prices fall. Look to continue to pick up shares of FXP if they fall $85 and below as well as SRS if it falls below $100. An investment to be considering in the near future is Gold. Next week I will discuss why it is a buy and how we can make some quick cash on it. We ended the week with a little bit of unexcitement, but we are set up to do quite well this next month. Have a Good Halloween and lets make some money next week. We'll see you Monday.

Posted in Labels: , , , , , , , , | 2 comments


Asia Down For Friday - Looks To Spread Into US Markets Tomorrow

After 3 days straight of a strong rally, Asian markets run was put to a stop on Friday. Even though Japan is still expected to cut their rate, many gathered the profits they could find in case their is not a cut made, which would send Asia into a big down spin. So I don't know if FXP will get much lower to make a second buy in. Who knows though, US is a market of it's own so it could be up, but usually the Asian market is a good factor in driving FXP.

I would guess we will see the same "profit taking" trend tomorrow in our own markets unless some significant announcement is made. We have had three pretty strong days, which is more we can ask for in this market. We may begin the day up, but I think we are going to see a pretty strong sell off before the close, which could push the market down 3-4%. Be careful this next week, during "Rave Week", and get into FXP while it is still below $100. If it's below $90 tomorrow, even better! See you tomorrow.

Posted in Labels: , , , , , , | 2 comments


BUY BUY BUY - The Stock Market is Creating Better Illusions Than Houdini

Quickly, go all in. We have reached the bottom. Not so fast. In our current market, emotions are playing as a higher factor than fundamentals. But like a heroin high, it's only going to last a bit and then cruel reality will once again set in.. Yesterday, I discussed the probability of a green day, especially in Asian stocks dealing with the possibility of a rate cut in Japan. That possibility is still lingering.

Today, we officially found out we had a contracting economy(one more quarter of those and we've officially got ourselves a recession) with the GDP report, but the "bad news" was better than expected.
With that, surprisingly, came a pretty well stimulated day. Good enough that I unloaded the rest of my Apple $110 strike price contracts for double what I bought into them for. And with those proceeds I'm back in heavy to FXP at $90. Ahhh, I feel so much better now. It's like coming in from a rain storm. Getting back on the short side is so much more comfortable in this market than playing the long. Let's take a look at where we're at:

See the trend? It looks like a long hike up, but it goes by faster than you think. Let me be frank. We may see FXP cut in price even further before it explodes. This is because next week looks to be what I call a "Rave Week." A Rave Week is when there is so many things going on you don't know whats going to happen. Lets not forget the short squeeze we are feeling for the redemptions coming in Mid November. Also, elections are next week, and with Obama leading, who knows what kind of response that will cause. And of course, everyday new bad news will loom over the market trying to bring it down. We may be told next week that all are banks go under and we will still see green. We may have the best news ever, only to find red in the market. Whatever the case, there will be a lot of noise during next weeks trading. Tomorrow will be a telling day.

So why buy FXP now? Because in December, watch out! I would love to see the market rally all next week. That way, SRS, SKF, and SDS will all be prime for buying, because I believe our big, bad tidal wave is coming in December and January. The holiday season the last hurrah for a lot of retailers. When they see the horrible sales volume the holidays bring, out go the lights. We are going to see a lot of big, national retailers go under next year (my picks: Circuit City, Office Max, Office Depot just to name a few). The ones that remain will be hurting, bad. So, if I continue to see FXP drop, I will continue to buy in $10 increments. I bought today at $90, if we see it reach $80, I buy more, $70 again, etc... Remember I have a nice pile of cash of GAINS sitting on the sidelines from the past two weeks. We've got room to wiggle.

I don't feel comfortable with any longs at this point. I almost do about GDX (Gold ETF), but I like their options, when their price is below $20. With all the Federal help in the credit markets, we are bound for inflation. SRS and SKF have come down significantly, but not near as much for a buy for me. Remember if you choose to buy FXP now, realize we may not see big gains for another couple of weeks. Don't worry, the gains will come, but maybe not until late November. You may see it go down another 20% before going up again. Like I said before, this ETF is not for the faint of heart. Be patient. I hope you all are riding these waves with me. It's been a great ride so far. Just don't hate me if I'm not 100% right. I will try to be 80%. You never always know what this market will do.

I will give another special update this evening to discuss how the Asian markets are doing. Usually, we get a pretty good idea of how FXP will perform from looking at how the Asian market does. This Rally should not last long. Upcoming news will prove that. Just wait until the next job report comes out. Check back tonight for the Special evening update. Happy trading.

Posted in Labels: , , , , , , , , | 2 comments


Almost Back To Ground Zero - Shorts Here We Come

Well, as we expected, The Fed went through with their cut of 50 basis points. We saw the market rally in anticipation of the cut as well as stay fairly strong after, until the last 10 minutes where we saw a lot of profits being taken. I sold out of most of my call options, because DIG, RIMM, and UYG were all up strong and yielded strong gains. I gained a 90% return on my Nov. expiring RIMM option, 70% on my DIG option, 60% on my UYG option, and I kept my .QAADB, April expiring call option which I bought for $9 (It closed today at $15), because I believe Apple will continue to go up. They are cash liquid, have no debt, and continue to rise above with their innovation.

Now what goes on tomorrow? Usually, I would expect a pretty strong sell off, considering we had two pretty strong days of green. In this market, that's more we can ask for. However, Japan looks to make their own Fed Cut, which if they make a strong one, would most likely send our market skying tomorrow, especially Asia stocks. In fact, as we speak, Hong Kong's SSE is up quite a bit off of anticipation.

So for me, Tomorrow is a measuring day. Another day in the green, expect our short positions to be in prime position to buy back into. Personally, I feel it will be a green day, so I will be looking to get back into FXP or SKF if it gets in the low $90's or below. Also, I will maybe to look to get out of my Apple (AAPL) option if we see it go up another 50%. If for some chance, the sell off is stronger and pushes the market down, tomorrow will end up being an "observance day" for me. Remember though, to not give up on the market. You cannot count on how the market is going to finish until watching it five minutes before it's going to close. We saw a 300 point swing today in 7 minutes. The market is very volatile and a Red Morning can be a huge Green Afternoon, so keep tabs.

So keep your eye out and if we see another strong green day, look to building up your short FXP position, because as we saw from last week, that's a great wave to ride in this market. If it's red, don't worry about it, because election week is next week and I think we'll see some more green next week. Happy trading and we'll see you tomorrow.

Posted in Labels: , , , , , , , , , , | 2 comments


The Dow up over 10% - Did You Get On The Wave?

Like I said patience is a virtue. You should have not been too surprised, because we here at Crash Market Stock said it was coming. In any regard, I hope that you are finding ways to make money in this market, because the opportunities are ALL AROUND YOU!

So here we are, a huge rally, up over 10% for the Dow today. All of the options we discussed are up anywhere from 30-90% depending on which ones you bought. And after completely liquidating my FXP, there was not any downside today. So what now...

Tomorrow will be a very interesting day and I'm going to be very cautious to what I advise. There are many elements constantly pounding on the market everyday telling us Bad News. I mean, even today we got the worst consumer sediment report in 30 years. You would think that would devastate a market. However, this time, I believe there was more positive pounding, temporarily, to give us this huge run. But there is a lot less positive to work with than negative, which is why we need to be careful when playing the long. In fact, GDP reports come out Thursday, which I am sure will now show a recession.

As for tomorrow, we have the big announcement. Now, no doubt most of the reaction of the cut was factored today, but not all. This puts us in a sticky situation. Most are expecting around a 50 basis point cut in the rate. Anything less than that, will probably send this market down tanking (coupled with the people taking profits from today). If they cut to expectations or more, I believe we'll see another healthy rally tomorrow. Remember, there are billions of dollars out there sitting on the sidelines waiting for the "bottom", and as soon as they see signs of life, they dump it in.

As For me, I plan on keeping my option contracts and hopefully selling them tomorrow for a healthy gain. Then, depending on how the market moves, I would love to get back into a short position. Notice below the chart for FXP. See the trends?
As you can see, there is a pretty correlating trend with spikes in this ETF. Good fluctuation from $80-90 up to $190. For me, as soon as it gets below $100, its a buy, and look what we found last week. The great news is after today, it took such a beating, its back down to $113. Another day of that and I am back in. For your options, look to hold on tomorrow and think about liquidating at the peak of the day tomorrow. Remember, it may be better to sell it before the Fed's announcement, because as we saw from the Bailout vote, action can cause the market to move down. If we see FXP hit $92 or below, I would get back in. There is too much bad news to come to keep that stock below $150. Good luck, Happy Trading, and we will see you tomorrow.

Posted in Labels: , , , , , , , , | 2 comments


Patience is a Virtue... Even With The Stock Market

And we were so close. From now on, you may just want to save yourself the time and only turn on your computer to check the status of the stock market between 12:50 and 1:00pm (PST), because lately the last ten minutes we have seen this market move anywhere from 3-5%. We enjoyed a majority of the day in the green and saw, for a brief time, increases in gold, oil, Rim, and Apple. However, that was quickly wiped out the last five minutes of the market. Don't worry, all is not lost.

On the bright side, we saw FXP hit $184, wow. So for all who heeded the call at my $92 buy in, has now doubled their investment on that stock in 1 week. No need to thank me, I'm riding the wave with you. Although it looks as if this stock will never be halted, I found it time to unload a majority of my position. I mean how greedy can we get. We may see it creep close to $200, depending on the market the next few days, but I don't want to roll the dice.

One dilemma this puts me in, is now I am not in a short position to cover my longs. Sure, I still have a minor stake FXP, but nothing that will hedge my longs. The good news is, all of my long purchases were option contracts, so there is a maximum to my downside risk.

So why go long in this market? Do I think that we have reached the bottom? NO! But I believe there is enough news in the next two weeks to encourage a healthy 1000+ rally and it could happen on any day. What are these reasons?

  • Fed is meeting to discuss and is expected to make another cut to the rate. Historically, this has been a great way to stimulate the market. Depending, on how big the cut is, the market could really take off. It could take off tomorrow just in anticipation for it. If they cut it 50+ basis points, watch out.
  • Elections. Historically, the market always slows prior to an election, but than usually gets a healthy bump afterwords. As it looks as though Mr. Obama will be elected, that can easily stimulate a run.
  • Hedge fund redemptions expire Mid November. It is in their best interest to have the market as high as possible for these redemptions, so look for maybe a manipulated run in that regard.
I feel this will be temporarily, very temporarily. I plan on turning for a quick 20-30% profits, because by Mid November, I plan to be free from a majority of my long positions. Take a hard look at picking up some options with either DIG, UYG, RIMM, or GDX. All expiring in Jan. Do not be frustrated by days like today, because when the wave comes, I believe there will be no stopping it. Tomorrow should be an interesting day, we'll see you then.

Posted in Labels: , , , , , , , , | 0 comments


The Dow is still going Down, Down and Down. More Opportunity For You!

Well, we have seen yet another Red day in the Stock Market and while most people are outside banging their heads on the wall, I am excited for the new opportunities that are presented to make some money in the market. It is for this reason why I recommended the initial load up of FXP. Today, we did see a decline of the Apple (AAPL) options, however, FXP hit $160, still giving us strong gains for the day. It is essential in this market (at least at this point), that whenever you are long, also hedge it with a short position, because for the next year I see this market struggling.

Because of continual days of red in the market, I think we are due for a rally. I did say yesterday that I thought that rally would have been today, but that's ok. KEY DATE: The Fed meets October 30 to discuss the economy. You can bet that if the market is still trending downward, we may see a historical 1 point cut to the fed funds rate. If so, watch out! We will probably see a 1000 + day movement on the DOW. So I foresee some expectation of the cut beforehand.

I think some opportunities to look at are Gold. Commodities have been slammed this month and gold is at a 52 week low. With the FED cutting the rate, some will fear inflation, boosting up Gold. On Monday, look to see the trend of the market. If it looks to be up in the pre-market, considering selling a big portion of your short position and maybe load up on some January expiring, either GLD or GDX options. This should give you plenty of time for a nice good pop in gold. If it looks to be down on Monday, let FXP make you some more thousands and towards the end of the day, maybe look into loading up on the Gold options. I think next week is a Green Week. See you Monday.

Posted in Labels: , , , , , , | 1 comments


Take A Ride On the Dow Roller Coaster

We're getting to the point that if we do not have a 600 point swing throughout the day, the market is just plain boring. Once again, the market has shown everyone that no matter what kind of expert you are, you cannot predict what this thing is going to do. Crash Market Stock strikes again.

Now as for our recommendations given yesterday. I believe we are in perfect position for a nice profit tomorrow. DIG, with all it's ups and downs today, finally closed at about $29.90 (being up about 10.74%. The option we discussed yesterday, today hit $3.40, yielding about 36%, if you got in on my recommendations at around $2.50, where it closed yesterday. I chose not to sell today, because I believe there will be even more of a rally tomorrow after OPEC cuts supply.

FXP hit $142 today, but quickly came back to where it opened in light of our closing rally we received. Don't you worry about that stock, it will be back at $150 in no time. I am considering selling off some of my profits, because I believe we will have a couple strong rallies shortly.

Microsoft came in with strong earnings for the 3rd quarter, however, their 4th quarter outlook was weak. As a result, there hasn't been much of a move for MSFT in after-hours. I believe in these times, anytime strong earnings are announced, its GOOD! We may see a healthy, SUSTAINED rally tomorrow in light of the news as well as the OPEC supply cut. Maybe look to sell out of a large portion of your short position in the morning, if the morning looks green, and look to get back in next week.
Tomorrow should be a great opportunity to sell out of some of those positions you may have taken a loss to (especially tech). I think we should be seeing a 3-4% rally tomorrow, and I think we're heading down to the 7000 - 7500 Dow level. Hopefully, we are fully into our Inverse ETF's by then.
Well, once again we have made money in this market. Don't believe the analysts when they say to wait. Just watch, people will wait and then miss it. I've got some great stocks for next week to discuss. See you tomorrow.

Posted in Labels: , , , , , | 1 comments


Return Update - Did you make money this week?

It has been 2 days since my advice of positions to take and although it may seem like it's too soon to discuss big returns, this is the market we are in today.
On Monday, I said to look at getting into FXP (an ETF that shorts the China market) at $90. With the help of one of the largest China banks getting hammered for credit failure warning, after two days FXP has shot up to $124.16, currently. This giving us a return of about 36%! Only in 2 days.

Now on top of that, I also advised to buy into an Apple call option prior to earnings report. I bought several April expiring contracts at a strike price of $110 yesterday for $9.10. Today, en light of the solid earnings, they got as high as $14.50 (.QAADB), this being with the NASDAQ being down 3.24%. I am holding on to them, because I think Tech will rally in either Thursday or Friday. And with a rally, I believe we should see Apple (AAPL) anywhere between $110-$120. So if you did sell out at $14.50, you would have earned a return of 59%.

The bonus with these two positions, is you had hedge to your risk. You had a short position in the market as well as a long position and best case scenario worked out where both were profitable.
So if you would have invested $10,000 ($5,000 in each investment), your current investment would be worth $14,750! Of course both circumstances acted profitable, which may not always happen, but for me, it does, frequently. So what next???

We have experienced two down days in a row in the market. Mostly due to bad earnings and fears of a global recession. Commodities have been crushed the past week and oil has reached its lowest point since June of 2007. I think this brings an excellent opportunity for us to make some money.

Currently, DIG (an oil long ultrashare) is trading at $27.86 (down 19.6%). OPEC, the governing body for oil distribution, meets on Friday to discuss production supply. Many people are predicting a supply cut, which in turn, should lower demand pushing the price up. I think if OPEC cuts supply by 10%, we should see a 10% bump on Friday. Currently, .DPBLN, an option for DIG at $40 expiring in Dec is trading for $2.80. I am going to try and snatch this up in the $2.20 -2,50 range. If we see this supply cut and a healthy pop in stock price, we should see this option go to the $5 plus range (if all works to plan of course). So keep your eye out and you may want to pull the trigger.

Please keep in mind though that options are much more volatile than stocks and should not be played unless you have experience in option trading. Happy Trading and we will discuss tomorrow.

Posted in Labels: , , , , , , , | 1 comments


Apple Announces Earnings - Profits Jump 26%!

I hope some people listened and got into Apple. Apple stock is trading over 14% in after-hours. I don't know what it will open at tomorrow, but I'm sure it will be green.

SAN FRANCISCO (MarketWatch) -- Your next-door neighbor probably can predict what's going to happen with the economy about as well as Apple Inc. can.
That was the wisdom offered up by Apple's AAPL chief executive, Steve Jobs, who made a surprise guest appearance on the company's earnings conference call Tuesday, a move aimed at quelling investors' jitters about the economic downturn.
Jobs was ostensibly on the call to tout the stunning results of the iPhone, which outsold rival Research In Motion Ltd. RIMM in the quarter.
Jobs touted the fact that the iPhone was a big part of Apple's fiscal fourth quarter, with 39% of total revenue coming from the device. This explosion was due to the fact that the faster 3G iPhone was launched in July. The company said the 3G iPhone outpaced RIM in unit sales, shipping 6.9 million units in the quarter vs. RIM's 6.1 million units.
In the background, though, was the fact that sales of the Macintosh computers, formerly Apple's crown jewel, appear to be going in the wrong direction. In the quarter, Apple saw unit sales of the Macintosh continue to grow, albeit at a slower pace. Macs slowed to unit growth of 21%, down from 41% in the third quarter, 51% in the second quarter and 44% in the first quarter.
Apple executives noted, though, that Mac sales were still outpacing the rest of the PC market. Analysts asked if Apple planned to lower prices or offer lower-end products.
"We don't know how to make a $500 computer that is not a piece of junk and our DNA will not let us ship that," Jobs said.
Wall Street seemed to like Jobs' appearance on the call, driving Apple's stock in after-hours trading. Only time will tell how well Jobs know his customers. He predicted that in the current belt-tightening, Apple customers are more likely to "delay rather than switch."
--Therese Poletti

Posted in Labels: , , , , , , , | 1 comments


FXP Update and Stock Buy Tips for Tuesday, October 21st

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.

Posted in Labels: , , , , , , | 1 comments


Weekly Tip - Apple To Report Earnings Tomorrow

Friday I bought April expiring call options for Apple (AAPL) when the stock was at $94 dollars. Even though I believe we are a downward trending market for the next 12 months, there are still times where I like going long in the market. The reason why I like this play is that I believe a lot of good companies have been brought down to ridiculous prices because of the overall status of Wall Street. Apple is one of those companies.

When looking at the fundamentals, in my eyes, there is no reason that Apple should be below $140, let alone $100. They have barely any debt and a brand that should weather pretty well even in a recession. When people have to sell, they sell it all. So I take it as a great opportunity for me. The reason why I like this stock this week, is because Apple announces earnings tomorrow after the market closes. So far this month, IBM and Google have both produced strong earnings and slaughtered market expectations. I don't see Apple breaking this trend.

Pending on this good news, I see Apple jumping anywhere from $110 to $120 in the next week or so. I decided to go with the call option, just to hedge some risk against bad news that could bring the stock down further. Look for a $110 to $120 January - April expiring contract before tomorrow's close. I will keep you updated on where I sell mine at.

Posted in Labels: , , , , , | 1 comments


Wall Street Update - How to make money in the stock market right now?

SELL! SELL! SELL! That's what everyone's been saying the past few months, and with the Dow Jones still under 10,000, it seems as thought that is what people have been doing. Many people have already seen their retirement accounts cut in half or even worse. Is there any hope? Should I liquidate everything I have, take my losses, and walk away? These have been the questions several of you have been asking yourself the past 6 months. Hopefully, I can show you some things that have been working for me.

Right now, the volatility of the stock market is like nothing we have ever seen. Today the VIX closed at 52.97 (down 24%), giving this market a wide range of trading area. Just within the past two weeks, I have seen several days where the market has had over 700 point swings in the same day. For some, this causes them to grind their teeth and pull out there hair. For others, it creates a great opportunity to make some good cash in a short period of time. Day traders have switched from Penny Stocks to Apple. What you need to make sure of is to be on the right side of the bump. If you are, you chance at making anywhere from 30-300% return on your investment, all in one day.

In days to come, I will keep you up to date of information on stocks that I am playing in my portfolio. Currently, Year to date, I am up 20% in my porfolio, which some may find impossible. There are ones to play on the long side, and ones to play on the short. With the help of ETF funds, people can play the short side without having to go naked on stocks. It's great. And as we continue to see our market get worse and worse, these short positions will take off. For starters, take a look at the ETF, FXP. It closed today around $90. Let's return to this stock in a week and see where it is, my guess is that it will be much higher in between now and then. Continue to check back for other ideas for your portfolio. There are ways to make A LOT of money in this market.

Posted in Labels: , , , , , , | 1 comments