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

"Owners of capital will stimulate the working class to buy more and more of expensive goods, houses and technology, pushing them to take more and more expensive credits, until their debt becomes unbearable. The unpaid debt will lead to bankruptcy of banks, which will have to be nationalized, and the State will have to take the road which will eventually lead to communism"

The above quote has been getting a lot of press around the internet, saying that it is a direct quote from Karl Marx, from his works Das Kapital written in 1867. After looking into it further, it is indeed a Hoax and never was in his writings. I did, however, still find the quote applicable to our current markets and actually agree that we are heading closer and closer to "communism" everyday. So we will see how that all plays out.

What a day, right? I was able to share in today's decay with several of you on the chat up until close and marveled at it's selling force, especially closing out the day. I kept waiting for one of those mid-day profit taking bumps to bring the market back up, but the sellers kept dragging it down. My Zecco.com account was bleeding green all day as my shorts were soaring and even some of my longs.

A penny stock, alternative oil (Origin Oil [OOIL]) and R&D company I invested in early, got a huge bump today (+20%) as they announced that they were partnering with the US Department of Energy in plans to work together on future projects. The company is working on the process of growing and transferring Algae to oil. Keep an eye on that one for you penny stock lovers, as it could continue to go up the next couple weeks. If you are interested in a bulk investment, email me (crashmarketstocks@gmail.com) and I can put you in touch with the CEO. The DOE is a great partnership to have going into the future. See www.originoil.com for more.

We finally saw the S&P close under 800 today, which is a pretty big technical move. It will be interesting to see if the market is able to sustain these numbers at this time. From a technical standpoint, we aren't seeing the set up of a crash. We are very close, just not quite there. The deflationary down-spiraling is not quite there, from a technical standpoint, for me to be comfortable to take a full position in short. In fact, technicals are actually pointing towards a good possibility of a rebound rally.

As you remember back in November when we reached our previous lows, we saw the market pull a huge 180 degree turn, spurring a 20% rally for the Dow over the next couple months. I do not want to get caught fully short on another 20% Dow rally (as some of you know, is not pretty), which we are very capable of. Indeed, if we do rally back up strongly, the deflationary technicals will be much more favorable for a massive sell off crash. At that point, most would believe the bear is dead and a much more devastating crash could very well happen. At that point, I will plan to unfold a very aggressive short position. This is the technical analysis I have gotten from analysts and the numbers so they are not guaranteed. If indeed we blow past the bottom and maintain there, obviously we will have overruled the technical side. But I will wait and see.

President Obama plans to speak tomorrow concerning his new plan to help slow the massive foreclosures that is plaguing the US. With the right kind of announcement, this could indeed be the action that causes the sharp turn around and propels the market on another bear market rally. However, failure to impress the public on this announcement, could indeed be the bullet that sinks the sub. So, tomorrow acts as a very critical day for investors and what we should expect from the market the next couple weeks.

Tomorrow I plan on waking up early, and buying into some decent, volatile longs to hedge against my shorts. I plan on buying these with a lot of the profits I have made the past couple of trading days off the shorts. One crazy long play I have been eyeballing is Las Vegas Sands Corp (LVS). The Market Club report is -100 (get your own symbol analyzed for free, all you need is a name and email, Click Here), but it is nearing its 52-week low again and has been known to bounce off it. It's a gamble, but if a rally is in our sights, it's bound to get some very big gains. That is one of my more riskier plays, but I plan on going in and buying some longs tomorrow.

The autos are causing noise again claiming they may need $30 to $60 billion more to sustain and not go bankrupt. It will be interesting to see how our government reacts this time and if they are as forgiving. I don't see this causing much noise in the market tomorrow, but is definitely worth noting.

So get a good nights sleep tonight. Be up bright and early and get ready for some action. Either way it should be a violent day, the market is getting antsy. Remember, 1 more week for the $200 Lending Club promotion, see here for more! Happy Trading.

It seems as if Geithner and his crew were unable to get a feasible "bad bank" plan together before tomorrow, as most recent news says that the plan will not be included in tomorrow's announcement, but that an alternative process of helping to buy up toxic debt would still be in place. This is not that all surprising, as I had expressed my doubts about their ability to execute such a plan without having to nationalize major banks when they first announced the possibility of the plan. It seems that they are going to take a more "private equity" approach to buying up the toxic debt and that anywhere from $50 to $100 billion of the remaining TARP funds are evidently being set aside for foreclosures. Surely, this is nowhere the number it needs to be, as I recently discussed the $650 billion deficit in loans due this year compared to what is available. And that is for just this year for commercial real estate! So, I would expect Geithner and company to be back at the drawing board very shortly. So, keep an eye out tomorrow at 11 AM, Eastern, for Mr. Geithner and his bag of tricks.

As I said on the chat earlier today, it was hard for me to make any moves today, as I can see the market reacting three ways to the announcements. First, such news could build on the excitement of what we have already seen the last two days and send the market up another 200 points. Or, we could see a negative reaction and profit taking from investors as the Geithner breaks down his plan. If indeed there are "questionable" policies, we could see some major bashing from analysts pushing markets down. Last, which I feel could easily happen, is a strong opening until Geithner, with a pretty strong sell off following the remarks. Geithner will be doing a interview with CNBC directly following the 11 AM conference, so be aware of that. Either way, I do feel there is going to be some exhaust selling and profit taking this week as the news is released and we all wake up in the same beds, driving the same cars, with the same credit card bills.

So, all I did today was sell my BAC (see the market trend analysis for BAC below, get your own symbol analyzed for free, all you need is a name and email, Click Here). Yes, it may go up tomorrow, especially in early trading, but come one, I made a 28% profit in 2 days off a bank I don't even know will exist in a year. I cannot be greedy. So, I did sell that and remain in cash from the proceeds. I now own a bulk of shares from my Thursday's FAS purchase and then my Friday's SKF purchase. My plan with them is to set a 5% stop loss on my FAS and a 10% stop loss on my SKF. Indeed, I feel that SKF could be down in the morning, but up by close. I personally feel that if FAS is down to begin the day, it has nowhere to go but more down before close. So, we'll see how it goes, but that's my plan. I just don't see a lot of hope for the banks here in the short term. America's debt accumulation is estimated to be at $294 trillion! Compare that to the $700 billion TARP money, and it's 420 times larger! Couple that with the wealth destruction we have experienced this past year and we have a very, very large hole to fill. So I remain pessimistic.


My QAADB, April expiring Apple call options have been very good the past week as tech has received a huge bounce. I don't know how long I can see this tech dream going, but I don't think I will roll the dice much longer. I plan on selling them before the end of the week. Who said Apple is nothing without Jobs?


So I plan to pick up the pace on my portfolio as soon as we see some direction with all these announcements. Remember, we may also have the final vote in for the stimulus as soon as tomorrow, which I think is sure to pass. I don't think Obama would have put it to vote unless he knew he had all the votes. That can also be an influential factor on the market.

Like I have said before, I am hesitant to go all the way short in the current state we're in. I do believe that our market is close, but some things need to be worked out. I feel that after people once again realize that all this spending is not creating the jobs promised, the market will react more violently in the opposite direction. So I will remain patient and wait for deflation and increasing debt show more of its ugly face.

Just a reminder of two more weeks for the $200 Lending Club promotion. You don't need to invest money in it, just sign up. Click here for more details. Have a good evening everyone, I'll jump on chat later tonight and tomorrow morning. Happy Trading.

Just as I anticipated, we encountered a pretty volatile day which made a sharp u-turn around mid-day, resulting in a pretty strong sell off of most everything, tech holding up the best. Once again we have dipped below the 8000 mark and may stay there to end the week, pending some big announcement that I am not foreseeing. Talk of the town today has been Obama's decision to regulate bank executive's salaries to a maximum of $500,000 annual. They do have stock option bonuses, but there are still lots of restrictions of when they can cash in on those. Sure, there is a need to regulate some of the antics that are going on around some of these companies and an accountability for spending, but I don't know if this is the right move.

I worry about Obama attempting to go to war with the upper class as he will most likely lose. There has to be a cohesive plan that can benefit all parties without dragging the upper class through the mud. We will see what response is given from the banks and the market dealing with this new development.

It has been a different week for the market and there are a few things on my mind which will most influence my upcoming trading. These 5 things are:

Effects of Restricted Bank Salaries
This may look like a good plan on paper, but there could be some pretty bad consequences if this plan backfires. No doubt there has been ridiculous spending by some executives that should result in some accountability. The problem I am worried about are banks losing their top executives to foreign competition. I mean how easy is it for foreign countries to match the $500k cap, not to say blow it out of the water. This filter will not only put a leash on the bad-performing executives, but also the good ones. If we risk losing some of our top executives, I can't see that being a good sign for banks and our overall economy.

S&P Closing Below 820
It has been a while since we have seen a sub 820 close for the S&P. Knowing the technicals are pretty strong at that point, I am very curious to see if we close under 820 sometime this week. If this is the case, I would expect there to be some extra downward momentum, possibly sending the S&P close to 800. Below is the recent market trend analysis for the S&P (get your own symbol analyzed for free, all you need is a name and email, Click Here).

Unemployment - Record Setting
I am very curious to see what unemployment numbers we see reported on Friday, as I personally feel they will be record setting. If you have been tracking the layoffs as I have, you have noticed the daily massive job cuts which have been going on. This is not to mention all of the mom and pop layoffs that are going on behind the scenes. This could be a big drag on the market.

Bad Bank - Nationalization?
I have not been able to wrap my fingers around this bad bank plan. I see them wanting to set up a similar system as the RTC program in the 80's and 90's, but I don't see how this plan works without instilling the nationalization of banks. And if that's the case, I would think that most of the shareholder's equity would be wiped out. Having Citi's or BAC's equity wiped out would most likely kill confidence in the financial markets and maybe cause a market crash.

Stimulus & Government Intervention
I still am waiting for Obama's bag of tricks. He has a good gift of linguistics and can do a great job of selling the country on hope. However, he has been very careful of not leading people's hopes astray. I think that's good. More false hope can cause even more problems in the long run. Still, I can't help but think that Obama has something brewing to attempt to counter this plunge and try to spark a big rally.

These things have been going in and out of my thoughts and continue to keep me guarded of what to buy. Indeed I am still heavily short, but have not gone as short as I would like because of some uncertainties. Hopefully, more clarity is brought the next couple of days and I can get back on track. Until then, I guess these thoughts keep creeping. Your Thoughts? Happy Trading.

PS - Seems as though the chat is working good. Good call on the recommendation. I will try to comment as much as I can during the day, however, I am often away for other business. By the way to clear some of your questions, Zecco.com is still offering free monthly trades, you just need to have more than 25 trades a month, which I'm sure most of you, like me, are doing. Just to answer those that thought the promotion was over.

Free Trading Analysis Video click here

Finally, we saw more than average volume return to the market today, as the fear for increasing unemployment as well as worsening economic conditions took the wind out of buyer’s sails. To be honest, I believe the market should be reacting like this every day, considering the mess we’re in. It’s still hard to say whether this will begin the next crash, as Obama hope still lingers, but it indeed made a statement that the bear is still out there.

Everyone is talking about the upcoming jobless reports coming out Friday. Some analysts are saying that this month we could see a jobless count of 670,000 for December (today’s ADP report showed that we slashed 693,000 jobs in the private sector). I personally feel that we will be even worse than that number and have a lot more to go. We haven’t even begun liquidating the retailer positions. Once more of these big retailers go down, we should see some absurd unemployment numbers. In fact, in regards to that subject, North Carolina had an interesting experience this past week. North Carolina, being headquarters for a lot of major commercial and investment bankers had some problems with their unemployment office. It seems that their unemployment computer service was overloaded, because over 50,000 people were trying to access it at once. After fixing it and adding room to the server, the server was overloaded a second time due to over 70,000 simultaneous requests. The actual phone number to call was down as well. I believe the reality of our situation is slowly beginning to settle in with people.

I wanted to share an article from the Boston Globe dealing with commercial real estate. Myself being a big proponent of SRS, I thought it would be appropriate. It said, “If you think selling a home was tough in 2008, be thankful you weren't trying to unload an office building.
Sales of Boston-area commercial properties plummeted 86.5 percent last year, with about $1.35 billion in property changing hands compared to $10 billion in a red-hot 2007, according to the global real estate firm Jones Lang LaSalle.

The drop-off portends a turbulent 2009. Now, real estate investors don't have data to guide them in pricing properties in the soft economy, making it less likely that buyers will come forward out of fear of overpaying.

"Its a huge challenge right now for investors to figure out if they're getting a fair price," said Lisa Campoli, executive vice president at commercial brokerage Colliers Meredith & Grew. "During the last downturn in the 1990s, we had the S&L crisis and some banks went under, but there wasn't the global lack of confidence we're seeing right now."

Commercial real estate is the latest sector to be hit by the deepening recession, with the fallout just now sweeping through Boston and other markets. Rents are starting to fall sharply as vacancies pile up.

The impact is especially severe in New York City, where there is a large increase in space available for subleasing, a key measure of weakness in the office market. Available sublease space in Manhattan has increased 43 percent from the end of 2007 as foundering financial companies have rapidly shed jobs and floors of offices.” All over the country real estate is dying. Just remember, most of these properties that are dying have very high leveraged loans on them. Eventually, this should come back to haunt the banks again. This is why I still can’t even closely be comfortable with buying financials right now.

As a result of the -2.72% day for the Dow, almost all of the shorts were up today. SRS had a moderate 5.5% up day as hopes for more Obama bailouts keep investors a little confident in some of these REITS. Don’t ask me why. FXP had some enormous gains, closing over 15%, as China continues to have problems with their businesses. The element that is killing China is their enormously large work force. I mean, just to give everyone jobs, they need to be exporting into almost every nation. As demand is going down, this is killing their employment. Their unemployment number may be higher than our actual population. Also, if any of you have dealt with the Chinese culture you will know that when times get tough, they close the door to spending COMPLETELY. Here in the US, we love to use our credit cards, and dig us into more debt. With the Chinese culture, most people choose to save than to spend. This lack of spending and lack of exports should bring a lot of hardships for their country and businesses.

I wouldn’t be surprised to see this sell off continue tomorrow. As more negative employment numbers come out and other sore economic data, I don’t see a lot of optimistic buying going on. We could rebound a bit either tomorrow or Friday, but I still feel the bear is here right now. The only thing keeping me from putting all my chips into the short side is Obama and his list of bailouts. I’m going to let that ride out a bit, plus I’ve got enough currently in SRS, SKF, FXP and EEV.

I also wanted to clarify some things with my Lending Club investment. The times that were given in my portfolio is when the loan is set to begin, not mature. So my money will be tied up longer than I originally anticipated. However, I will still be shooting for that 10.5% return, it is just going to take longer. Anyway, I love looking into these different investment opportunities. If you know of some that have worked for you, please share. Have a great night everybody, keep up the pace. Happy Trading and we’ll see you tomorrow.

Another day of nothing much but bad news hit Wall Street today, but it seems as if the hope of Obama and his plans for a new (much larger) stimulus plan seems to be keeping the market a float, even in the midst of continual turmoil. He is also warning that our deficit is nearing 1 trillion dollars. I'm sure another round of almost a trillion in bailouts will help that. That number could be doubled or tripled by 2010. As the new congress was sworn in today(mostly democrats), it seemed as though new life was breathed into financials in hopes for new USS (Uncle Sam Support), which in turn made it a big day for banks and commercial REITS and a bad day for my SRS. As frustrating as it may be for me, I have to stick by my gut, my knowledge of the real estate market, and the hope that eventually, fundamentals will move the market again, because despite what some people think and in my opinion, our current economic condition has definitely not been fully factored into this market. We’ve been given a lot of emotional morphine to dull the pain the past couple months, but there are definitely troubled times ahead.

This shouldn’t be news to anyone, as everyone has been announcing warnings the past couple days. The Fed, Corporate Execs, Obama, some analysts, and about every legitimate website. Bank of America’s CEO wrote a letter to executives warning them of their poor performance results of 2008 and urged them (including himself) not to take bonuses this year. Well, at least some companies aren’t totally greedy. AIG, learn by example.

Alcoa also announced today that they will be cutting anywhere from 13,000 to 15,000 jobs to help guard from their recent hardships. This sent their stock crashing into after-hours and may have contributed to the down market as a whole in after-hours as well. The job cuts that should continue the first half of 2009 should be pretty horrific. It is scary to think of how high the unemployment rate will hit before beginning to recover. All I know is very little businesses are making a lot of money right now. I mean over $7 trillion of household wealth was wiped out by Q3 2008. That’s 11%. Some expect this number to have almost doubled just by Q4, bringing the total loss to about 20%. That decrease is going to have serious effects on our small and large businesses, especially luxuries. And some people feel we aren't even near the bottom.

Even as the market may cheer a bit as Obama is sworn in, in hopes for some more help. If Obama does end up passing his possible $850 billion stimulus plan, it is going to be quickly squelched by the $13 trillion loss in household wealth. This is why I don’t find much hope or optimism in these talks of bailouts. They're just lost tax dollars.

In addition to decrease in wealth, there will also be a decrease in spending. We are in a recession, a dollar made is a dollar saved right now. Very few people are finding a lot of extra cash to take to the mall every month. As worth of houses have been slashed and IRA accounts cut in half, people will be extra frugal in saving the next few years. By doing so, this will lower the monetary flow of the markets and bring more turmoil and frozen lending to the market. No one is being convinced to spend money right now. Even with a stimulus checks, much of that goes to paying off debt and savings.

It is very clear that problems are not retreating anytime soon. There will definitely be buying opportunities in the market. As I have said in past posts, I like energy and commodities. The dollar has experienced a surprising recent boost the past month. I don’t expect this to continue and see a lot upside still in Gold (GDX), Silver(SLVR), Oil(DIG), and agriculture(POT). Alternative energy is also on my radar (STP). During these harsh times, I expect to see a big boost in popularity in E-commerce. I see companies like Amazon and Overstock almost doubling their customer base the next couple of years. Sure, transaction volume will go down per person, but when the market does come back, they should be front runners in my book. Also, people are going to have to shop somewhere. That’s why I stick with Wal-Mart, Payless Shoe, and Old Navy brands for retailers. Discount retailers should still be doing sales.

Well, everyday becomes more interesting and a bit more scary. I just get this weird feeling like one day the market just may crash. I know the signs aren’t here at the moment, but the market is still very sensitive and the signs don't necessarily have to be here. On another note, no loans have defaulted on me yet in my Lending Club portfolio. Only a week and a half remains until all my invested loans are to begin and I am hoping I can maintain near that 10.5% return I opted for when I began. I believe my first loan payment is due in 3 days, so I will take a new screenshot and update you on what happens from there. I hope everyone is finding their own successes out there. It should be on heck of a year. Happy Trading and we’ll see you tomorrow.

Welcome back for everyone that was enjoying the past few weeks traveling or spending time with the family. While you were gone, there wasn't much you missed in the market. Just a few more record low index numbers and a bit of buying, kind of paradoxical isn't it? At any rate, it is good to finally be getting close to normal volume numbers as people are slowly staggering back to their lonely offices. Here in my office building, I am slowly seeing more parking spaces open up, less competition for the elevators, and almost no line for the lunch counter. We are truly sinking into this recession.

It was a disaster of a day for autos as their December numbers all came out. It’s funny, because even with the numbers reported, they were “better than expected” numbers for some analysts, somehow making some think this was a “positive day.” I’m glad these people aren’t my fund managers, because there is nothing to cheer about the numbers that were given today. Here are most of them for your review:

Daimler (Mercedes) -23.5%
Audi -9.3%
Porsche -25.5%
BMW -36%
Ford -37.4%
GM -31%
Honda -35%
Toyota -37%
Nissan -30%
Kia -39%
Chrysler -53%

Sure, but everything is fine, right? Whatever the case, after these reports, don’t ask me how Chrysler survives to February. Even with the bridge loans, with those amount of losses in one month, I see a very slim chance of keeping them a float. I see them going under very shortly. The companies that surprised me were the Asian autos. Usually Toyota is among the top sellers, but they were down more than the American autos. Either way, I’m steering very clear from autos, no matter what analysts say about them.

I continue to stick strong with my inverse etfs. It is good for investors to know that these are big momentum movers. There has been some negative articles written up about some of these leveraged etfs and that you can’t make money over time. This is not true. I have made very good money from them and plan on making a lot more. They are strong momentum movers. Bears have not had momentum since almost mid November. As soon as that momentum is back, we should see some serious strong gains in the inverse etfs. Yes, trade them with discretion, but please know YOU CAN MAKE MONEY WITH THEM! A lot of it if you time it right. I try not to stay in them very long, and buy and sell on the bumps, but they can be very rewarding. The critics of these funds are those that bought at the wrong time. I mean if I bought SKF at $250, I would be cursing them too! SRS would have had a very big day, if it were not for the gains in home builders (due to another better than expected number, still bad), we probably would have seen a 10%+ day today, instead of only 3.8%. No worries for me, because SRS is still my favorite for beginning 2009.

The traffic at retail centers for post holiday season has been horrific. I am lucky to see more than 20-30 cars in front of department stores. Even worse, when I am in the actual stores, there are no lines at the registers. Sure, people are still looking, but who’s buying. In my opinion, we are in for one of the worst years for retail bankruptcies in US history. As these retailers close, it is going to kill the bottom line of these REITS and property owners. Then to top that off, these 5 year conduit loans that were bought from 2001-2005, that were also leveraged 80-90% at 5% interest rates are all coming due, and where are they going to get financing for all these properties that are now 20-30% vacant? Commercial real estate is in for a horrible year in 2009. SRS is $150+ in my book. It may take until February after the Obama cheers settle down, but it’s coming in my opinion.

I was successful in my first Lending Club loan today. This program is one of many I will try out on this site and give you any success updates I find, as I like getting creative, with discretion, to try and spread out my risk and returns. As a trial, I allocated $200 to loan. The interface is very user friendly and I was able to do everything in under five minutes. I selected my target return I was aiming for (10.5%), and it automatically generated loan suggestions for me to use with a balance of A-D rated loans. I did a maximum of $25 in every loan, spreading out my risk and my final portfolio looked like this:


So as you can see, all the loans are due within 2 weeks, so I will know by then whether I am successful in my returns. So far, I love it. Hopefully, I can average out with at least an 8% return, the returns are the key. Slowly, I will put more money into it if I find success. You can sign up as a lender or borrower very quickly at Lending Club. I will continue to keep you all informed.

So we push on with volume back into the market. I still believe we are going to have bearish tendencies in this market until we get closer to Obama’s move in date. I think it’s a bit early to start cheering for that. Even so, I’ve got my SRS and FXP ready to go and am also looking to get into either SKF or FAZ, as commercial banks are bound to go through another round of hardships with these commercial loans. Good evening all, Happy Trading, and we’ll see you tomorrow.

Finally we can bid farewell to this crazy market year we call 2008. It seems as if investors felt a little optimistic seeing the year end not completely in shambles as we saw the Dow end up another percent today. To be honest, I'm glad the year is over. It's almost as if people have been waiting until 2009 to see everything change. I am sure we, as a country, will have another pretty strong reality check as we continue to see things not get better around here anytime soon. But for now, I cheer with the investors to hopefully be able to find greener pastures in 2009, as I do prefer to make money on the way up, than on the way down.

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, to most people it looked like just another uneventful, holiday trading day. However, there were some strong moves in some sectors, especially for those that own SRS. A lot of bad retail news circulated the media today, as analysts begin to evaluate holiday retail sales and predict their future performance for 2009. And most everyone agrees, it does not look good. Even though we have been discussing this principle here for months, it seems as if it is now beginning to hit the market again as almost every big commercial REIT got slammed today, having SRS end up over 10% today. This should be just the beginning.


As for me, I plan on steering clear of almost every type of retailer you can think other than discount retailers like Wal Mart or Old Navy. The projected numbers don't look good, and we seem to have a trend of performing worse than expectations lately. At the end of October, ICSC (International Council of Shopping Centers) forecasted 6,100 stores closing in 2008 and 3,200 stores closing in the first half of 2009. This was before big retailers such as Circuit City, Office Max and a few others announced their mass closings. I'm sure this forecast has been revised since then. Mind you, these are national retailers and do not factor the mom and pop retailers that will also be going dark. In fact, I attended the ICSC national conference this past year in Las Vegas and it was pretty dead. All of the retailers said they were done expanding for 2008 and probably most for 2009. Many of the booths were empty and, frankly, aside from losing money at the tables, there wasn't much to talk about.

Some have asked me why I focus so much on retailer's performance. Aside from actually tracking their stock performance, retailers are the life and blood to shopping center owners. As they go down, so does the real estate. With the ammount of leverage that has been placed on these conduit loans, just losing 10% of your tenants can put you in the red. So the fate of retailers are very much tied to the fate of SRS and even financial etfs such as SKF and FAZ. As these properties will most likely be given back to the bank, a new round of bailouts will be need to cover the billions of dollars of outstanding loans that are coming due. Our greedy leverage is going to kill the US for the next few years.

So I continue to be bullish on SRS. Also, another good stock to watch that I received a tip from a reader is XRT. It is a retail etf fund which seems to be moving a bit more stable with the market, for those who have become skittish with the Proshares etfs (I have not). Using a put on XRT could be coming up very soon for me.

I still can't find many reasons to buy long here in the short term other than some commodities. GDX, SLVR, DIG(or other oil etfs), and POT are ones on my radar if I have to eventually go long. Financials scare me to death as I feel they have a whole new disease to deal with when commercial loans hit their books. Why do you think they're still not lending?

Anyway, like we expected volume should continue to stay low until after the new year. People may begin to slowly drag themselves back into the office this week, but I am not expecting much. I am excited to get volume back in this market and see where it takes us. Bear tendencies have definitely returned to the market and should continue for a bit longer. Aside from Obama's inauguration, I don't see a lot left to spark buying for a while.

I hope everyone had a good weekend. Thanks for the comments about Lending Club. I also got some emails verifying that returns in the teens had been reached with their initial investment returned. That's the key, getting back what you put in. Nine out of ten people seemed to have something positive to say, so thats pretty good, in my mind. So I think I am planning on allocating some funds there, nothing big at first, to see if I can get myself some 10%+ returns. Everything counts. Have a good night, Happy Trading and we'll see you tomorrow.

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.

I hope everyone had a good weekend and was able to knock off some holiday shopping. I don't know about you, but I couldn't help but notice the extremely low traffic at my malls, given it being just a few days before Christmas. Sure, there were a lot of people there, but nothing like years past. I guess it is just another sign of people not spending. There is a lot more of that to come in 2009.

My last post generated a lot of interest in Lending Club, a social networking lending club. There were a lot of questions, so I got the following brief summary from their company saying more about them and their strengths. They seem to have their act together pretty well. Here's what they said, "Because of the current financial crisis credit worthy borrowers are not able to get the financing they need to be entrepreneurs, expand current businesses and payoff debt. Lending Club connects these high quality borrowers with lenders. Lending Club offers SEC registered notes to these investors with returns stated from 6.69-19.37%.

Lending Club notes are 3-year fixed term, but can be resold on our secondary trading platform. This brings liquidity to social lending. Lending Club is currently the only peer lending site right now accepting new lenders and borrowers." So there you have it, if you're interested in testing those returns, go to Lending Club for more information.

Today, resulted in an interesting low volume day. No doubt, the holiday vacationers led to the low volume in today's trading. However, the sellers were definitely still by their computers, wherever they were. The market started out with a doozy of very disappointing earnings from both Walgreens, the largest US drug chain, and Toyota. If autos needed even more pessimism. Even the best made, most attractive and definitely most dominate auto company is having severe sales problems. I don't see a very bright future for our US autos no matter what kind of loan they get. Not for at least 2 years.

Another element, which made people a little ornery today, was the study that came out showing where banks have used the issued "tarp money." The results found that many of the banks were still paying out very large salaries to their executives as they did not have an outlined executive payout like the autos do. And as you can tell, not a lot of new "tarp" lending has hit the consumer market. So these funds are getting soaked up one way or another.

Something very interesting caught my eye today during today's trading. Notice below, the huge upswing just before close. Something came into the market during last 10 minutes to help give it a big boost (my guess starts with an F and rhymes with Red). With the low volume of trading and the large amount of bad earnings, I can't see a natural upswing like the one we saw today happening on its own. Can you say manipulation?

All the shorts finished strong, especially FXP and EEV. As we have discussed in other posts, foreign turmoil is building up and the more unstable the US becomes the more it reflects on these emerging markets. I am feeling good about being in them. SRS was up strong and came down towards the end with the market moving. One big reason for the fall as well, is that commercial developers are requesting to be a part of the bailout list, asking for more than 200 billion dollars. That's awesome, we're not even to Obama yet, and they are already asking. Of course, no companies were singled out personally, as their stock would most likely tank, but you can probably guess (Simon, Kimco, GGP, Centro), but their stock did receive some love today, as it seems some people believe they may get help. I cannot see them getting bailed out at all and them even asking shows just how much pain there expecting. You open Pandora's box if you give developers taxpayer's dollars. I am loving SRS next year.

Expect the volume to continue low this week with it being Christmas week. I still think selling will remain most the week as sentiment is getting worse everyday. The market has seemed very bearish the past two trading days, and once the volume comes back, it could get ugly. There should be some great profits made here in the near future. I hope everyone has a good evening, Happy Trading and 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.

Another day down which resulted in similar trading trends that we have been seeing these past couple weeks. With the anticipation of the bailout, traders (I dare not call them investors anymore, because the investments that are yielding profits right now are about as solid as junk bonds in my opinion) pushed the market into the green for most of the day. We did see the market dip down into the red, as people began doubtful, there being talks that the bailout could face some problems with the Republicans. However, you and I both know this deal will be done and in my opinion this bailout was factored in two weeks ago when they announced they would be meeting about it. But I am sure the market will have something to cheer about when it gets announced, but it may not last more than a day, there being no more bailouts in the current pipeline.

Emerging markets and China have been receiving UNBELIEVABLE amount of praise from investors. This weekend I will write a detailed post of why I feel FXP is getting killed so much, so look out for it. China is forking out money left and right into their airlines, banks and major business just to keep them afloat. Somehow, this is perceived in the market that this is a positive sign. I mean come one, how blind are these people. China announced yesterday that their Producer Price Inflation fell 2 percent from January to November. This is far more than predicted and is very scary for China. They have a major risk of inflation as energy costs begin to rise and global economic problems persist. Yet traders brushed that news off just as they did the horrific employment number we received on Friday.

This is a dangerous time in the market, because there is very low volume and it seems as if the main bulk of traders are not fundamental traders. It is clear to me that hedge funds and institutions are waiting. Until, we get some fundamental movement based on actual numbers, the market is one big roulette table. This is why I am choosing to stick with my few fundamental picks and just wait. EEV and FXP have been utterly destroyed the past month. I don’t dare call “bottom” during this end of the year market run, but if I had to guess, I would say we have to be close with those two. If you haven’t bought in those yet, you are loving these incredibly low prices! Bring on 2009 and the new batch of problems.

The next item up for shorting are Treasury bills. With the recent, enormous popularity in our treasury bills with the billions of dollars being flushed into them, this makes treasuries prime for shorting in my book. As the US economy continues to show signs of severe weakness, our foreign neighbors will grow fearful of keeping their money with us. TBT is the Proshares Ultra short that shorts the Lehman 20+ year treasury. With the amount of government spending, coupled with foreign countries pulling their money out of our treasuries, this should weather very well for TBT. It may take a month to get jump started, but I believe we are low enough now. I plan on picking some up later in the week.

GDX and DIG are proving their resilience and I don’t see them slowing down much in the coming months. Sure they may get hit a day or two, but I think we will see an upward trend from here on out. The Saudi’s are closely watching oil and will not let the prices get lower. All commodities are receiving a lot of love due to the global weakening currencies. I am getting the urge more and more to look into trading currencies as I have been using Forexmentor.com for research. You might want to look into it if it’s your cup of tea. I see GDX and DIG continuing to move strong. SRS hurt today with strong gains in the REIT sector. There are no fundamental reasons for these gains other than them getting caught up with the bailout bust. These should be going down just as fast as they shot up in my opinion. Like I’ve said before, SRS is a rock star in my book.

We may see a bailout pass tomorrow. Either way, the market should move with that decision. If we see it pass, expect a nice little cheer rally. This could be the peak for the longs. I may sell out of the rest of my longs, except for GDX and DIG. If there is still complications with the bailout, we could see some selling tomorrow. Either way, I believe after this bailout is passed, people are going to once again realize the reality behind their two weeks of hallucinating. I hope everyone has a good evening, Happy Trading and see you tomorrow.

I have been receiving several emails asking to know more about these inverse ETFs that I talk about so frequently on this site. So I thought I would do a little mid day bonus to discuss them, and dive into them into a little more detail. Sorry, if this is elementary for some of you guys out there, I just thought it would be a worthwhile reference to many out there.

First, lets start with the basics. What is an ETF? ETF or Exchange Traded Funds, are a portfolio of different stocks, industries, or bonds that are traded much like a regular stock is. ETFs are very similar to index mutual funds, but I prefer playing ETFs more than mutual funds. The biggest reason is that you can trade an ETF at any time during the day, much like a stock. Mutual Funds you buy into, most likely doesn't process until the following day(same with selling it). Also, usually the expense fees are smaller with ETFs, so I prefer to stick with them.

With ETFs you are able to buy into sector or industry by buying only 1 fund. You can buy into the Nasdaq, Dow, or even foreign markets. ETFs started in the 90's (SPDR's) and have grown tremendously in poularity the past few years. It is a great way to ride the bumps with more volatility rather than just trading stocks.

In this market I like to stick with Proshares ETFS. By looking at their ETFS, you can see they have several options to choose from. One of the options you will see is their list for Short Proshares, which are known on Wall Street as Inverse ETFS (analysts don't like using the word "short", it's like Voldermort in Harry Potter). These short proshares perform well as their focused benchmark goes down. For instance the short proshare DOG shorts the Dow 30. So as that sector goes down, DOG goes up.

There are also proshares called Ultra Proshares (which I usually like to trade), which are doubled leveraged ETFs that are more volatile. So an ultra short proshare like DXD, which shorts the Dow at double leverage will most likely be double the inverse of the Dow 30. They now even have triple leveraged shares, which I do not deal with much. Too risky for my blood and the volume isn't their for me yet. Just remember, the leverage is a two edged short. It goes up twice as much and then goes down twice as much.

Here are some Top ETFs I like to track and play on the bumps in this market.

SRS - My favorite Ultra Short Proshare. This is an ultra short to the real estate index. Having the Real Estate market a big part of my life, I find this as one of my niches. I was trading SRS 6 months ago, when I saw early signs of real estate failure for the next few years. SRS shorts big REITS, retailers, brokerage companies and others which most are all struggling right now. It is no coincidence that this has been a rock star ETF.

SKF - Another fabulous one. SKF is an ultra short for the DOW financial indexes. You can probably guess that it has been performing quite well that last couple months (almost hit $300 today).

FXP - An ultra short to the China FTSE/Xinhua China 25 Index, which consists mostly of Chinese financials, energy, and communications. I believe this one is pretty undervalued, considering what China's growth rate was and what the inverse of that looks like.

EEV - An ultra short for Emerging Markets. Being a "global crisis" now, many other countries, along with US, will be hurting the next couple of years.

Other short proshares to note that I like are SDS and QID. As of now, there are only a few on the long side that I trade.

GDX - A gold miners ultra long fund. This tracks the gold sector and gets strong gains when it's up. With the almost sure thing of another rate cut, look for gold to keep getting stronger.

DIG - An ultra long oil fund. Oil has been hammered the past few months. With a cold winter months ahead, I can't see oil staying at these values for very long, no matter how many people car pool in a Prius.

UYG - Ultra long financials (opposite of SKF). This one will be a great buy in a few months to come when banks begin to get their act together. Keep your eye on it for the long haul for the ride back up.

Here are a few that I like to keep my eye on for the time being being. I thought it would be good to get this post out, for those that have been incquiring of what ETFs are and which ones I look at. It's been another volatile day again today and it looks to be unsure where we'll end at. I believe we will get a pretty strong run, which ever way we decide to go (up or down), towards the end of the day. I will give the weekly wrap up later.

I thought it was going to happen. Today, during what I like to now call "The Countdown" (last five minutes before close), the Dow was dangerously flirting with the 7500 line, which many believe is another threshold. We saw it get to 7506 and then quickly retreat, settling at 7552 at the close. If you were to turn your computer off at 9:30 (PST) and came back to check it after the close, you would not have believed it. Today, we had almost a 700 point swing, with an ending volume of about 528M (Avg being about 333M). So we are continuing to see an increase in volatility and an increase in volume, which mixture can ultimately be poison for the market.

Earlier, it looked as though we were going to rally. But at about 11, it all began to crumble. Then it really kicked into gear the last 30 minutes before close. Even though we look at awe at the close, is it really all that surprising? In fact, even in my post from last Friday, I talked about the very good possibility of reaching 6500-7500 range by tomorrow. Everywhere we look, even globally, there is no good news. The jobless count continues to go up, and financial markets continue to go away. The government is like two rival gangs trying to get along, and our retailers have no access to money to buy new inventory, even though the consumer probably wouldn't be buying it. The bad thing about it all is that I believe we, as the consumer, haven't even felt the effects of this crisis all that much. 2009 will be a tough year for most Americans and many other countries.

Well, not to be a Debbie downer, as I am sure many of you, like me, had a pretty successful day today. Sure, my options took a bath. Oil has just been crushed. Once it got under $50 a barrel, it was a free fall. I think oil will continue to struggle for the next bit, but I am still confident I should get a healthy bounce back up before my options expire. Apple and UYG was down with everything else. GDX remained down, but held well against the turmoil. In fact it was up close to 6% earlier in the day. Gold is just waiting to take off, it just needs some support from the rest of the market. This is why I play the options on the long side. As much as all of them got killed today, my losses were pretty minimal.

In the midst of all my down long options, I still came up very strong, because the bulk of my positions are in FXP, SRS, and EEV. I finally shaved a majority of my SRS, I mean how greedy can I get with that stock? We saw it get to $269. What can I say, Rock Star. FXP continued to rise, pushing its way towards $100. FXP was held back slightly today with rumors of China investing in their own agriculture market (only being up 8%, boo hoo, right?). These are all head fakes. FXP should be over $100 in no time. EEV was up a strong 13.5%, which gave me some good profits today.

Tomorrow will be interesting. After the close today, Dell beat market expectations with their earnings, which shot their stock up over 5% in after hour trading. Apple and Google are also getting some love in after hours. News like this could be just enough to propel a nice bear market rally tomorrow, especially for tech. However, we shouldn't underestimate the devastation of what happened during today's trading and also the downward pressure from options expiring tomorrow. All the news will be talking about tonight will be the Dow Disaster. This should bring down consumer confidence, especially in the stock market. However, my gut tells me we will probably rally tomorrow and it could be strong. We may see a new resistance at around 7500, temporarily, unless that is beaten tomorrow. In that case, we could see ourselves heading to 7000 real quickly.

Days like today are why I like to wait until right before close to make my move. The market's momentum was totally different earlier in the day, and could have fooled people into thinking that we were going to end in a strong green. Heck, I was fooled. But with our recent volatility levels, I can't pull myself to make any trades before 12:45pm (PST), unless it's at the open (which I don't do much). As much as I wanted to pick up some more long options before close, I couldn't bring myself to go anymore long than I am already. I may regret it tomorrow, but I will still make profits elsewhere. Playing the options on the long side has really paid off for me. I do not feel nearly as much pain on days like today.

These next few days and weeks could be real defining moments for the market. Days like today may send a wake up call to Washington to put their differences aside and grind down and find some temporary relief. Whatever the case, it will probably not last. There are too many pieces of the puzzle missing, and too many cooks in the kitchen to fix the mess we're in. Take some Advil when you wake up, because it could be another doozy of a day. Expect to see similar volatility and volume that we have seen the last few days. Happy Trading everyone and I will see you tomorrow.