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

Whether it be 8000 for the Dow or 825 for the S&P, it seems as though investors have found a base to set up camp as the market may go up and down a bit, but is staying close to those numbers. The continual battle between stimulus hopes and deflation depression is causing some violent jolts in volatility, as people are not quite sure what to believe or if things are going to get a lot worse. Even if the largest stimulus considered is passed, history has shown us that in most cases, there is severe lag time for the economy to respond to an economic stimulus. Also, let me remind you that our current situation is very unique as it is a global crisis, so I would expect that lag time to be much more severe. There seems to be a definite mood change currently that is very similar to the one back in November. Even with today's Friday wanting to rally, there was a strong opposing force selling. Currently, much of the movement is a result from all the day traders, as the momentum is moving like clock work as the shorts are covered. With next week thick of economic news and earnings, including GDP, I would expect a serious move to be made.


I personally feel we are getting closer and closer to retesting the bottom and this time when we're down there, we're going to go straight through it. All of the focus is on the banks right now, and everyone's chips go with them. Let me give a few reasons why I believe the banks have much more problems ahead and why I link SKF (Financials Short) and SRS (Real Estate Short) directly go together and why I am bullish on both.

Bank of America has an estimated $64.7 billion in commercial debt and says that it considers $3.9 billion or 6% currently non-performing. Most of this current delinquency they say is from home builders who are struggling with cash flow. This doesn't even take into account the other several billions that are just now beginning to default on their loans. You can expect that number to rise dramatically. Lately it seems as if these banks are more concerned with using the TARP funds to furnish new executive offices and payoff their chauffeur. It's ridiculous. Check out the latest free videos from INO, good stuff, click here.

US Bancorp's delinquencies jumped to 3.34% during Q4, which was way up from the 1% reported the year prior. It is expected that these default rates should increase for at least the next 12 months in the commercial sector. It is also projected that over $400 billion worth of debt is to come due during this year and that there is a refinancing shortfall of anywhere between $125 to $150 billion. Where's that money going to come from? Obama perhaps? These aren't even including all of the other defaults going on behind the scenes. It is also estimated that there is over $3.5 trillion in outstanding commercial debt and that 40% of that are on bank's balance sheets, while 26% as CMBS debt. I can assure you that most of those loans are very high leveraged, anywhere from 70-80% LTV. Banks aren't lending like that anymore.

With these kind of numbers it is no wonder why I am long on SKF and SRS. I believe there is going to be more bank consolidation and maybe some government controlling until this debt problem can be sorted out. The residential credit crunch was the a taste of what is to come.

Another significant trend to note today was that Gold and the value of the dollar were not inversely related. This is very good news for my GDX and GLD options. Having GDX up almost 9%, with the dollar being up as well, shows that the inverse relationship may be breaking and they may be taking their own paths. Plus check out the fundamentals for GDX below(Click Here to analyze a symbol for free, you just need a name and an email!). I have great hope for my gold. DIG could be also taking this same route, as we saw oil jump with another OPEC cut.
Big week next week with big news. GDP should be a momentum changer, whatever it may be. I would expect some sorry numbers to set the mood for selling next week. I did put some more money into my Lending Club investment, as my 10.5% return has held up thus far, and if I can keep that consistent, it can be a good buffer for my portfolio. My $100 promotional contest I am running for them ends next week, so get in it for free for a chance to win an easy $100, click here for more. I got out of my Citi today, as I feel Monday is going to be bloody (unless of course Obama has a weekend secret for everyone which, recently, they have loved doing). Time shall tell. Have a great weekend everyone and Happy Trading.