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

As anticipated, markets remained rather flat for most of the day, that is until a big swarm of selling hit markets with about an hour left of trading to close the Dow over 100 points in the negative. I was a bit surprised by the aggressive move, especially after such a flat day, but the "nervous" end of day selling continues to show the uneasiness of investors. Accompanied with the selling, was significantly more volume than we have seen on buying days.

There still remains a lot of talk about last Thursday's fluke crash. Many analysts are still trying to prove that indeed the drop was almost all related to technology flaws and that there was no "real" selling motivation. That statement is rubbish and, in fact, Thursday's big drop is matching perfectly with technical signs of "topping off" for the S&P.

As you can see from the graph above, the trend almost exactly mimics a topping curve. From the recent highs to Thursdays low, there was about a 12% drop in the S&P. That downward "whip" is the largest contributors to index leveling. Now when we evaluate other data, we see that they too match a level off formation.

If the market is indeed leveling, what we can expect in the short term is a bit of a rally back to recent highs and maybe even beyond a bit. However, following that, markets tend to respond with more frequent "whips" in the market, sending the S&P down even further. Of course, this is speculation based on charts, but the percentages state that indeed the S&P is leveling off. If this does become the case, Thursday's crash was just a warning to investors that the market is sucking wind.

Consumer confidence continues to struggle. In a large, national media poll conducted, it was reported that over 75% of consumers feel that we are still in a recession? Really? But everyone is saying we are done. The government, CNBC, Tom Hanks, and Cramer are all saying we are out of the recession. So how can this be? This is because, the consumer continues to suffer. Home prices are still declining, health care and energy prices continue to rise, taxes are increasing, and disposable income is still shrinking. In this type of environment, consumers will continue to be on their guard and not be so easily fooled by inflated earnings or a "ra ra" speech from Cramer.

Friday should be interesting. I'm sure market movers did not like that selling close today. Lately, Friday's have been trending on the sell side, however, often we see open with a bit of a buying spike, only to trail down by the end of the day. Once again, I plan on entering some short positions early morning if this is the case. I will be exiting these positions by close, only to pick up some longs just before close. Lately, it has almost become automatic that Mondays open green. Of course, I am a bit worried of weekend news in relation to the debt turmoil in Europe, however, I will maintain strict stop losses and roll the dice a bit. Happy Trading.

Well, we are now returning back to business as usual...higher movements in indexes accompanied by low amounts of volume. I was beginning to think that maybe people were going to be dusting off their keyboards to start making some trades, but it lasted about 4 days. At least for now, it seems that investors have squelched the recent "fluke crash" and are pressing forward to try and get the Dow above 11,000 again. As for me, I was lucky to be able to exit some of my major positions before Monday, which resulted in a great week for me last week.

For now, I am returning back to bunker mode, which is maintaining very small positions of rather low risk positions. One opportunity that is flourishing right now is gold. Lately, it doesn't matter whether the the market is going up or down, gold goes up. Charts are showing very strong strength for gold and we could definitely see a nice pop here in the short term. I do still see deflation risk for gold in the future, but not short term.

Apple should see some strong moves back towards the $180 mark. Tech is maintaining their status as the rock among a lot of shaky industries. This has definitely not been near as bad of a recession for many tech industries. Japan's tech is currently performing very well, which could have a positive influence on the NASDAQ tomorrow.

After last Thursday's crash, there have been an increased concern about the ETFs. During Thursday's spiral, the NASDAQ cancelled sell orders for selected companies in order to try and minimize the damage. There are analysts who feel that during an longer, sustained crash, such imposed government regulations would be more strictly enforced, which in turn would cause problems for the ETFs. Considering that many of these ETFs are based on derivatives and essentially mirror an index, worries that when these bids are shut down, the mirrored index will too be shut down. There continues to be a lack of regulation for many of the ETFs, however they can still be instruments for quick, large gains (and vice versa).

For me, I'm no so convinced. I do believe the ETFs (especially highly leveraged) should be traded with caution, I find it hard to believe that one would be completely unable to exit a position during a market crash. Temporary holds may be put on place, however, I would have to think an exit opportunity would have to be available. Those are my thoughts.

I expect the market to continue to bounce back and forth. Until, I see some more definition in the charts, I am going to remain rather light for the time being. Don't get me wrong, strong movements could show up again as early as this week, however, from today's trading, I'm guessing that won't be the case. Happy Trading.

Green Monday continues this week as the Dow is currently enjoying a 360 point rally to respond to last weeks disaster. As I said Friday, this is something I was definitely expecting, which is why I chose to exit out of most of my short positions before close. Whatever the reason may be, Mondays have a very significant trend to result in positive trading and considering how we finished last week, I knew there was potential to see a lot of green today...and that is exactly the case. One detail to note though is that the volume of today's trading is much more mild than on the days of selling. Once again, we are seeing evidence of an actual lesser amount of buyers, but just more trading per buyer than seller. This could lead to several conclusions, which mine is, don't short Mondays.

Much of today's success is a result to the trillion dollar bailout the IMF and European Union passed over the weekend. This is exactly what I was referring to in my post this weekend. Time and time again, government regulators are coming to rescue with event after event. Sure, on paper it looks to solve all major problems. Just throw some money at it right? I don't think there is any economist out there can accurately forecast the kind of global side effects the global economy will face in the coming years due to trillions upon trillions of essentially "buried money."

Sure, the rally has brought a bit more confidence back for investors, but still many buyers remain sceptical. Even today's much lower volume compared to the selling days show that many are much willing to sell than to buy at this point. So sustaining this rally should be a difficult task this week and one which will be met with a lot of opposition on daily basis. Already, there are many who are opposing the IMF's decision, saying that after one climbed mountain, there's 10 more behind it. So what happens when Portugal, Spain and Italy's debt becomes threatened. Are they too eligible, or will they be given the Merrill Lynch treatment. At any rate, I did expect today's rally, so today acts as no surprise, however I do feel that it will be very hard to sustain. Thus, I'm seeing some more shorting opportunities this week. I will give an updated post later on after close.

Well, it seems that investors are smarter than I thought. Despite a very good employment report (almost 300,000 new jobs created, excluding census workers), markets still sold off going into close on Friday to make it the worst week for the Dow since 2008. After opening up in the red, the Dow actually bounced back and even saw some green, however, sold off to end the day down 139 points. Due to markets opening up in the red and not in the green as I had anticipated, I waited until we rebounded back to almost green until I picked up some short positions (FAZ, VXX, and SDS). I then sold out of these positions before close as to not get caught with our usual green Mondays.

More speculation about whether it was indeed a "fat finger" error that triggered the mass selling yesterday caused for investors to remain unsettled on Friday. Now, many analysts are saying exactly what I said in my post yesterday as an explanation of what caused yesterday's market crash. Due to more modern, computer regulated trading practices, a domino effect can quickly come into effect, especially when markets are uneasy with an international debt crisis. Authorities are still looking into the "exact" reason of what may have caused it, but unless they get real creative, I don't think they're going to pinpoint a singular event.

Back in the old days, during similar types of crisis's, market traders would just not answer the phone to make buy/sell orders. In a sense, this is the same type of response. The selling triggered computer sell positions all over the world, which would most likely explain why many were having problems placing trades on their computer platforms yesterday. I, myself, am not fooled to think that yesterday was a fluke and that we can expect to return to business as usual on Monday. Today's negative trading, despite a very positive employment report, proves otherwise. So, active traders, be on your guard, because I have a feeling the next few weeks are going to be very interesting. If you are needing to open a trading account, I think Zecco.com is offering a monthly free trade promotion. Worth checking out.

VXX continues to move strong, being up another 12% today. Now yes, this ETN will get hammered on a big rebound day, which is why I am trading it with a lot of turnover and very tight stop losses. However, it has moved up close to 60% in just a few days. With the always concern of Monday being a green day, I had to exit out a lot of this position, with some stop losses on what remains.

It will be interesting to see what news comes out over the weekend to either help or hurt our current situation. Remember, just as how devastating to markets this Greece debt crisis is, an unseen solution, if it were to be announced, would most likely bring a lot of confidence back to Wall Street. We have seen in times past that the IMF and US government are willing to do just about whatever it takes. This why it is always dangerous trading around these influencing variable events.

I do, however, remain pretty confident in a re-tracement regardless of the outcome of Greece. We had been way overbought for a while now, even with the trillions of government stimulus that has now reached our economy, we are only seeing minor steps to growth, which is I'm sure, much less than the government was anticipating. We cannot rule out the possibility of a double dip for this recession, as it is very common to see happen in these types of economic environments. Now that the problems are extending globally, the US government and The Fed are starting to lose control and the man behind the curtain is being revealed. Let's see what next week brings. Happy Trading.

Due to the weekend being here, I thought I would end the week with some humor and share this video with you that a friend sent that got me laughing. I have another post that I will post later summing up the week, however, enjoy this for now. I'm an Iron Man fan, and am looking forward to the new movie, however, I don't think I compare to these guys, enjoy!