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

The popcorn continues in Wall Street as we continue to see a daily trade off of up and down days. Such activity shows the instability and skepticism going on with investors, as many concerns of the economy still remain. Continuing low volume shows that not all that many investors are participating in the trading, especially institutions. Day-traders are enjoying the volatility as quick profits can be made, if you are playing the bumps right. As for myself, I tend not participate much in day-trading and try to look at the markets with a bit more of a macro view.

Much of yesterday's downfall was due to concerns of the large amount of government debt being issued this week and how investors would respond. Well, this afternoon, the government issued about $26 billion worth of Treasuries, which much of the 7 years and more did much better than expected. I am very curious of who is buying Treasuries right now, especially the day after we saw the largest spike in the yield curve in history. If I had to guess, I would say that The Fed had a little hand in helping those Treasuries get sold. Just a hunch. I'm pretty sure Europe, nor China are buying. So if you eliminate those two, there is not that much left.

As a result of rallying government debt, the markets took a turn for green and rallied on, having the Dow close up over 100 points. At one point, the markets were trading in the red, but many found it as a positive indicator to see the government debt trade with such ease. I personally don't see it as that positive of news. Sure, it's nice that we can still borrow money, but at the end of the day, we are still putting ourselves in more and more debt that will eventually have to be paid back.

Today, we yet again saw another day of increasing energy and oil prices. With gas prices pushing towards $3 a gallon at the pump now, this is yet another negative factor that consumers are going to have to consider. If things weren't hard enough for consumers, now they have to once again worry about high gas prices. The oil increase may be good for oil investors, however it will take its toll on the economy as well. I do feel that equilibrium for oil lies in the $70-$80 per barrel range, however, I feel it has some lowering to do before it reaches those numbers.

Goldman Sachs UPGRADED Starwood Hotels today from Sell to Buy. I am really starting to wonder if there is anyone home at the famous Investment Bank. They state that due to a expected increase in their REVPAR, they should see stronger profits. I work with many hotel professionals, and anyone who is actually in the hotel business knows that the past quarter has been one of the worst for hotels, and the outlook doesn't look to improve for several years. Vacancies are record high, REVPAR is decreasing, and it does not look to be improving anytime soon.

The problem with many of these banks who are issuing these ratings is that they are trying to compare our current recession to ones we've had the past thirty years. To do such things does not make sense and will, in my opinion, end up surprising many of these institutions when the economy does not move like previous recessions. The fundamental problems we are seeing, not just in the US, but in the entire global economy, is something that our world has never seen. We are heading into untread waters. So I am very skeptical of these banks and their upgraded ratings.

All eyes will be on GDP tomorrow and most likely the result will set the pace for trading for the entire day. The market is expecting a -5.5% move, compared to last months -6.1%. The slight increase makes sense, when you factor all of the money that has been flushed into the economy by the Fed. If the number is reasonably "better than expected", I would expect to see a pretty positive reaction from the market. We saw this today after hours with Dell. Despite their horrid 60%+ loss in earnings, their stock stayed strong in after hours due to the result being "better than expected." I fear that the lack of intelligent trading that exists currently will bring more devastation to the markets in the long run. Such performance is not sustainable and shows the weakness of the tech sector in this market.

Today, I ended up buying a good portion of SDS. Even though the markets traded up today, and may do so tomorrow, I'm sticking with technicals in that we have some downward trading to endure. I may pick up some more options tomorrow too, depending on how the market does. These guys offer some great tools for option trading, check them out : optionsXpress. The housing report came out flat today, which is a depressing sign for the housing market. In the midst of all the foreclosures, many were hoping for a good increase. Mortgage rates are slowly increasing as well, which also puts a divot in demand. Although the current market popcorn can be frustrating, I still very much believe there is opportunity here to make some good profits. Happy Trading.

After four consecutive days of down trading, the Dow flew out of the gates to open up this short trading week. Much of the spurt was fueled by the new consumer sentiment report that was released today, showing the biggest number in the past 8 months at 54.9. The market was expecting a depressing 42, so the actual result created quite a buzz at the opening bell and set the pace for the rest of the day, having the Dow close up 196 points. Though the number on the outside looks to be very strong, there are some things to consider when evaluating it.

First off, remember that the consumer sentiment report is, in a sense, an opinionated survey. 5,000 households are given a survey of their opinion of the current market conditions as well as future expectations. 60% of the weight of the number is expectations, where 40% is current conditions. Even though it is relevant to know the opinions and sentiment of consumers out there, I do not place much fundamental weight on the outcome. The number itself is very volatile, especially when the market itself is volatile. The results do not represent any actual, existing fundamental data, just people's personal opinion. Also, I find it hard to allow a 5000 sample pool represent the entire country. That's considered a small population in statistics. I would not expect a negative number in the midst of such an aggressive rally. So, although the number came to some by surprise, I was expecting a rather positive number and am not wavered by such a positive sentiment report.

In the midst of such optimism that investors found in a strong sentiment report, not much response came from a horrible housing report. The Case-Shiller Home Price Index was announced today for the first quarter and came in worse than expectations. Home prices fell a record 19.1% from the previous year's first quarter. That now makes home prices down about 32% from the latest peak, which has got to eat into consumer sentiment. The Chairman of the index says that he sees no evidence that recovery in home prices have begun. Well, according to CNBC, not only has the recovery begun, but they are pretty much advising that you better get in the next 3 months or you risk missing the bottom. I usually take an economic professional's opinion more seriously than corrupt, greedy fund managers.

This is now the second week straight we've seen a strong buying first day of the week. However, you will remember that after last week's strong opening, it was followed by four consecutive days of selling. I assume that investors will not leave profits in very long on this bounce, especially with the upcoming GM bankruptcy being more inevitable than ever. People are taking profits quicker and quicker now, which is why I began taking my profits much earlier than usual a couple weeks ago...and it's paid off.

Global turmoil with North Korea nuclear launches caused for some strong gains in the US dollar today. As a result, gold was punished after the strong week last week. This could not have come any sooner for the US, considering they are planning in releasing $101 billion worth of bonds and notes just this week. Such mass selling of bonds would have, in normal circumstances, given a good beating to the dollar and most likely cause for more strides in gold. I do still expect to see some good trading in gold, especially as things calm down with North Korea.

The $101 billion of new government debt being issued brings more red flags to my already very red flagged economic perspective. It is estimated that 10-year US government paper may reach 6% by 2011! Can you imagine what interest rates will be at if that's the case? What people don't understand is that massive inflation is almost guaranteed in our future. As a result, interest rates for homes could very well reach the teens again. What kind of demand would exist in the housing market if financing was available at 9 or 10%? Indeed, prices may be even more lower than they are now, but the means to fund the house will, most likely, be much different than it is currently.

As is always the case, I usually look for buying opportunities on big moving days like today. Of course, all of the shorts were crushed, with both SRS and FAZ being down more than 10%. Most everything was up today, which gives me a lot of things to consider when looking at what to buy on the short side. Many things stood out to me today. As always, my June expiring SRS option looked very tempting for me, as it did very well for me last week. Today, it was down over 100% at one point. I went in and put in buy orders for several contracts before I left, but unfortunately, none of them hit. I may be regretting this tomorrow, but hopefully I have another opportunity in the morning.

LVS and MGM have to be put back on my radar as subjects of a short. I just returned from Las Vegas last week, and in the midst of a large international conference, it was still dead. Here we are, going into the Las Vegas off season, so I would expect some very dreary numbers from the casino builders.

Oil I think has reached its temporary peak. Although I feel equilibrium lies around $70-80 per barrel, I have to think going into summer months, especially with big deflation worries, we should see a re-tracement. I will be looking at DUG for some good, strong, short-term gains.

This week should be a wild week of economic data following last week's bore. GDP will be reported towards the end of the week, so I am sure all eyes are on that. Like I've always said, I remain very skeptical of our current quarter's numbers, considering that much of current producing results have been largely influenced by massive government spending. June should be a very telling month of real market conditions, only if we don't see a TARP 2 or TARP 3 by then.

So tomorrow should have some fireworks, and I would expect some rather sound profit taking either tomorrow or Thursday. Join The Investing Social Network for free. They've got some good voices on there and provide some good data. I will be on chat tomorrow giving my real time thoughts on market trading. Also, I will be giving a more in depth portfolio look to all you premium podcast subscribers (subscribe here) this week. Happy Trading.

Today's closing was better than the evening fireworks show displayed at the Disney theme parks. I had to double blink a few times just to make sure I was seeing the correct numbers stream across my screen. Definitely, something caused for an absolute V difference in trading, as we saw the Dow go from being down 100 points to closing up 90 in under 30 minutes. The biggest change was made, literally, the last 5 minutes of trading. As I have said before in prior posts, we should expect these violent swings more often and with more volatility. Today reminded much like the V turn around we experienced back in November. It was definitely something to see.

Now my first suspicion of the closing was PPT. The sudden jolts of buying at certain dow markers was very similar to trends that PPT would create. My other theory is that some inside information may have leaked out about the GDP number tomorrow. It kind of felt like there was a party and the whole neighborhood was invited, except for me. Either way, someone is trying to ignite the market in preparations for something, and as for me, it makes me a very cautious investor. Oh yea, and over half of today's volume came from the last two hours of trading...chew on that.

It is days like today that more solidify my beliefs in the coming of a strong downward spiral, as clearly there remains significant speculation in the markets. Even after another day of "perceived" strong numbers, the second half of trading (besides the last 20 minutes) was mostly selling. In my opinion, the rally is beginning to run out of steam. We're about 250 points off of my 8000 expectation that I wrote about a couple weeks ago and we could be there by tomorrow. If we break through the 8000 mark, the rally should push onward toward 8300, so keep an eye on that.

As we anticipated, new home sales were better than expected as were the purchase of durable goods. Once again we find ourselves comparing apples to oranges. The better comparison for such numbers is a year over year number instead of a month to month number. As it was reported that durable goods did rise 3.4% from January, from a year to year basis they are still down 28% from last year's March numbers. The same goes for the new housing sales in which we saw had a significant increase from last month's numbers. However, from a year over year standpoint, we are down over 41%! Also, they failed to highlight that the median price declined, once again, over 15%.

Obviously, there is a twisting of the definition of numbers going on to try and propel buying in the markets. There was also some problems with Government bonds and the failure for asking prices to get filled. I go into more detail of this problem in today's podcast (subscribe here), but I feel The Fed has some big motivation to keep the markets looking healthy at this point.

There is an article on CNBC today that almost directly defines the headlines we should expect to see more of in the near future, entitled, "Has Geithner Rescued America?". In the article the writer talks of all that Geithner has done and that we have him to thank for unfreezing the credit markets and turning around this economy. Talk about don't speak too soon. I am amazed that CNBC posts articles such as these on their front page. Sure, give me access to a currency printer and I will get anyone out of their current financial problems...for now. Such nonsense shows the naivety of some of these writers, all of which I take with a very, very small grain of salt.


At one point during the day, SRS and FAZ were both up over 10% which was looking quite well for me. Being only 45 minutes from close, I thought to wait until closer to the closing in order to take some profits (considering my SRS was up over 20% from when I bought it, and my FAZ option up 30%). However, little did I know the storm that was to arrive right before close and flip the market upside down. I ended up not making any trades, which could keep my little stake in short longer than I had originally wanted to hold it. I still remain up in SRS, but if this rally shoots into tomorrow, we could see it back in the mid 40's.

I anticipate the GDP number to follow suit and be "spun" as a good number. Tomorrow is a tough one to call, because honestly I could see us rallying 200 points or even sinking 200 points. Investors are becoming more and more sensitive to market conditions and the littlest breath of new developments can stir things up. We should have a good sense of where things are going in pre-market trading, but I would expect GDP to set the tone for tomorrows trading.

I believe we're getting close to the peak of this rally. I don't mind getting in late on the short side rather than getting in too early. I don't think we are done with seeing these violent green jolts, so I am still being cautious on the allocation of my funds.

So tomorrow acts as a very critical day for trading and I believe we will be able to better tell if this rally is coming to a halt or if it has some more steam left in it. April is getting closer and closer which not only could be new trends for the Dow, but also the dreaded tax season. In this type of economy, there are a lot of ways to save $$$ on tax dollars, so consult with someone. Washington Tax Service is very good, so if you Need Help with Tax Debt? Learn your options for reducing or settling tax debt. Have a Tax Attorney on your side. Get Started Today.


We'll see you all bright and early, Happy Trading.

What an interesting way to close the market on Friday. I think it was pretty clear that there was someone waiting with a button to make sure that the market closed above 8000, as that is a pretty strong technical point for momentum. I literally watched it jump from 7992 to 8000 in the absolute last second of the market. At any rate, it was still big for the market to be as down as it was with: 1. Having GDP numbers be better than expected, 2. Having two strong days of selling after beginning the week in the green, 3. Having a Friday end as a red day is a rare things these days. So, I think we definitely have some downward momentum, but not quite enough yet in my opinion.

It is very clear that deflation is here, as we can see with the huge drop in real estate prices, oil, and precious metals. Eventually, I believe this deflation is going to lead to a deflationary down spiral and eventually capitulate. I do think we're very close, but we're not quite there. I heard a good analogy yesterday describing the state of the S&P. Under 820, the market has a cold, under 800 the market has caught pneumonia, and under 780, we're on our death bed. The technicals show us very close, but not there yet. As a result, we are vulnerable to these quick, short-term rallies that can be very, very violent. So, as I said a couple days ago, I have adjusted my investment strategy to make quicker trades and shoot for lower returns. I'm not ready to go all short, but I am very close.

So I did sell off most of my FAZ on Friday and a bit of my SRS shares that I had purchased a couple of days ago to pocket the return. I sill have plenty of short to reward me for another down day Friday, but I have a lot more conservative plays as well. I'm playing this market a bit more conservative than usual as I feel with the possibility of these violent rallies, I don't want to be caught with as many shares that I have usually been holding. Weekends always tend to have surprises as the government likes to let new hopes brew with investors over the weekend. This is why I have big positions in DGP, GDX, TBT, and UUP(see the market trend report below for UUP +90, Get your own symbol analyzed for free, all you need is a name and email, Click Here). Yes of course I have my FXP, SRS and EEV, which I continually have, I've just lowered my positions a bit until we see some more technicals triggered. Don't you worry, they're coming.

As for now, I don't want to roll any dice with Mondays as who knows what news come out this weekend. Obama has already attempted a "premature hope rally", by announcing his "promises" to increase liquidity in the banks and get the flow of money started. Sure, anything else Obama? Why don't you just create mana bread for all American families. He's obviously hoping to dupe the not so wise investors again, and oddly it may work for one or two days, but unless he has the secret to life, there is not much anyone can do to unfreeze the markets currently.

At any rate I plan on waiting around to see how the market reacts on Monday and make my move. It's a toss up at this point. I would expect to maybe see some green rallies next week, and maybe even become quite violent if announcements come forth. So, I'll play it by ear. These rallies make the market even more vulnerable for failure.

I thought I would end on a funny story that happened in China the past week. In Hong Kong, it is tradition for their equivalent of a "CFO" of the country to perform a stick shaking ceremony, in which generates a fortune for the country for the next year. In shaking a bundle of sticks, one stick falls out of the bundle and corresponds with a sequence of numbers, that in turn generates a fortune. Well, this past week, the fortune which was given was horrible. It talked of depression, economic turmoil, and much suffering. The people of China take this ritual so seriously, it caused quite an uprising and even some rioting, as people feared the fate of their country. The Governor eventually had to make a press statement to say that the ceremony was only traditional and did not actually reflect the future of the country. I found this story amusing, since so many people think China is good place for investment. Ahhh, the naive.

So we'll see how it goes. Some people had mention Zecco.com trading their rates. The new minimum balance of 25,000 for free trades is true, however, you can also get free trades if you make more than 25 trades a month, which I assume most of you, like me, are doing. Still one of the best deals I've seen out there. So there's some information for you. Also, just a reminder, only 2 more days for the Lending Club promotion, win $100, see here. Have a good weekend everyone, Happy Trading and we'll see you tomorrow.

Call it a hunch or call it an overdose of OSD (Obama Stimulus Decisions), but I actually made a SHORT TERM move into longs today. Many more speed bumps have arrived into this road to destruction of our economy than I first anticipated and in order to maximize my value, I'm looking to try and play both sides a bit more, for the time being. Currently, investors are very vulnerable to just announcements of hope and with the new President being busy and active, I definitely feel there will be many more announcements to come in his first months of office. Please don't misunderstand me, I still strongly believe that our economy is still very much spiraling downward, I just feel I can make some extra $$$ on the bumps. Call it the day trader in me. I don't plan on actually "day trading" per say, but my trade volume should definitely be going up. I'm still very bullish in my current short positions, I would just like to make some cash on the bumps up to load up on my shorts at lower levels, because in the end, I believe the market will come crashing...and fast.

Today I sold off my remaining SKF and put them into BAC and C. With Obama just being put in office, he is wanting quick action. I expect to see things turn much quicker that we did with the Bush administration. Sure, this can eventually lead to worse things for the economy and probably will, but the point is the market will probably rally from it in the short term. These are the reasons to justify my longs. I do still have a strong short position in SRS, FXP and EEV. I just feel these can hold up better during these rallies than SKF and FAZ.

Either way, my holding of these stocks will be very short lived. In fact, I would like to be completely liquidated from them before Thursday's close, at latest. I do not want to be stuck with financials going into GDP announcements. By doing this, I plan to throw my gains from the hopeful quick rally into more short positions, which will, I believe, ultimately yield strong gains.

So far my plan seems to be working out for me as it looks as though Obama is trying to get his stimulus plan (maybe $900 billion) to pass ASAP. Although, he is getting a lot of opposition from the GOP, signs are looking good for the ability to get something passed as early as maybe next week. Just whispers of this has sent financials up almost 10% in after hours. If this sticks into tomorrow, I will most definitely shave some profits off the top, as with all speculative announcements, the cheering is usually short-lived. Also, as you can see, momentum charts for Bank of America do not look pretty. -75, OUCH. Get your own symbol analyzed for free, all you need is a name and email, Click Here.


Yahoo also announced "better than expected" earnings, however yielding a loss for the quarter. But, as usually, investors think of this as a good sign as the stock is trading up 5% in after hours. I actually like yahoo, even before the earnings announcement. I believe over the next five years, a lot of focus is going to be shifted over to e-commerce, which should indeed boost value for Yahoo. Plus, I also think at Yahoo's recent low stock price, they are still very vulnerable for a hostile takeover. I think something should happen, definitely before the end of the year.

Keep an eye out for FOMC's meeting notes tomorrow. We shouldn't expect much as far as a rate cute (since we're pretty much already at 0%), but they are definitely still capable of moving a market in either direction depending on their economic outlook. If something substantial is announced, we can expect to see a strong run in which ever direction it heads. I personally feel we will have an up day of trading tomorrow as the hope of new stimulus could really ignite the buying the next couple of days, pending that something largely significant is not announced.

New home sales and GDP numbers are still to come at the end of the week. As I said earlier, I would like to be fully out of my longs before that GDP number is given. In fact, I believe Thursday we may trade down just expecting a bad number. Analysts have tried to soften the landing by projecting an enormous -5.4% result. Their hopes is that anything even slightly lower than this number can be manipulated to investors as a positive sign and erasing the memory that our GDP just did indeed fall almost 5%. Sadly, I am not as easily fooled. Anything below 3% and I am running for the hills. Why roll the dice with longs right now when I can just stay in cash and earn 2.45% APY* with HSBC Direct Online Savings, all FDIC insured. I will be able to sleep better at night, that's for sure. So I don't see me in BAC and C longer than a week.

Well, let's see how tomorrow goes for my new long positions. I am a bit more nervous going long in this market as I feel it is more of a gamble, but I do see some opportunity in it. Check out these free INO technical stock trading videos, very informative, click here. Happy Trading everyone and have a good night.