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

Stocks have rebounded quite nicely since September's trading woes. Two weeks ago, trading was looking quite grim with not a lot of optimism. However, markets have had some good trading days and bounced back. Beware of falling into the trap of going long too soon. There still remain a lot of discouraging signs in the market that could push for another sell off. Consumers are sensitive and just the slightest negative pressure can turn optimism into pessimism.

One big thing to keep eyes on is the VIX levels. We have seen quite the spike in the VIX (volatility index of markets), which mostly leads to downward trading in the long run. We saw record VIX levels in 2009 when markets reached lowest levels. The theory is that the more uncertain traders are, the more sensitive and volatile they trade. In fact, just in the past two months, we have seen several +/- 1% Dow trading days. It has come down a bit this past week, but still remains in high levels.

After months of upsetting their subscribers, Netflix announced this week that they would not be splitting their streaming and DVD company up. Recently, Netflix changed their subscription prices, charging significantly more for those wanting to continue receiving DVDs. In addition to the price change, Netflix announced their plan to divide the company and retain the streaming service under the Netflix name and create a new company (Quickster) to house the DVD business line.

Customers responded to this move with even more anger for the company, which resulted in some loss of subscribers. After a few months, Netflix finally gave into the complaints and hacked the Quickster company, keeping the two businesses under the same roof.

Throughout the duration of this debacle, we have seen a tremendous drop in Netflix's (NFLX) stock price. After reaching highs of well over $300, the stock almost reached the $100 mark this past week. Investors have begun to question the decision making ability of the company's leaders and whether or not they have the ability to continue strong growth.

Additionally, Amazon is starting to show its big, ugly face around the corner as a massive competitor of Netflix as they just recently announced their new Tablet as well as their growth in streaming content for their Prime users. This is another influencer for selling NFLX.

Personally, I believe the stock has been a bit oversold at this point. Much of the reaction has been emotional, which tends to reach far beyond the point of logical valuing. The point is, Netflix still controls the largest amount of streaming media content, which will always bear the largest subscription base. If Netflix can keep this trend, they should continue strong growth. I threw some of their stock in my account on Monday. Happy Trading.

For now, we are smooth sailing back above 10,000, which makes many of the bulls happy after the nerve racking jolt markets have received the past few weeks. However, low volume mixed with large intra-day swings continues to make markets a very unstable to buy into at the moment. Today was a perfect example of that. At its highest point, the Dow was enjoying 100+ gains for the day, as investors were once again finding security in higher risk securities. Bonds and treasuries were getting hit in the morning as confidence was climbing. However, into afternoon trading, Greece received yet another downgrade from S&P and investors reacted to the negative news by taking cover. The Dow closed down 20 points.

Volatility is becoming more and more normal on a daily basis at this point. In fact, it is very reminiscent of market trading in the last quarter of '08 (minus the consistent huge crashes in the market). The volatility, coupled with the low volume is making it real hard for investors to feel comfortable buying more risky securities. Until the Euro becomes stabilized, I believe that volatility should continue to be expected.

With Europe's problem, we are continuing to deal with the oil spill in the Gulf. BP's shares have taken an enormous beating and are at an all time low as the oil giant continues to commit to paying for the clean up. I am sure they would have much rather dealt with Bush in this situation than Obama, as The President is making sure the pay for every last drop and then some. BP will come out of this and grudges will be dropped, but I don't see an entry for them anytime soon (definitely down the road though).

Real estate remains to be another huge question mark. It seems as just as something begins to gain traction in the industry, something else brings it down again. Transactions are increasing as sideline money is becoming itchy. However, banks are cooperating less and showing less leniency for loan modification. On top of that, many real estate professionals are aggressively fighting the proposed "Carried Interest" bill that is floating around the Senate as we speak, that could essentially increase taxes for partnerships of up to 120%. You can believe that will show up in the bottom line. A double dip seems extremely likely and I would be surprised if we didn't see that begin before the end of the year. Fall and winter months seem to put real estate on ice.

As for now, longing the dollar, gold, and short term treasuries seem to make sense. This uncertain volatility creates a dangerous environment for trading, both on the long and short side. The NASDAQ still remains to be the princess of the prom, and I expect that to continue as we go further throughout the year. Also, be prepared for yet another run from Apple when those new iPhone revenues (and continual iPad sales) start to hit their earnings reports. Happy Trading.