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

All of Tuesday's big losses were pretty much given back on Wednesday and Thursday as the Dow closed up another 122 points today. Like I said on Tuesday, you need to be careful in getting false signals of market momentum on reactive selling days. To many, it looked like indeed it was a start to correction in the market. Reactive selling days have tendency to quickly give back the profits they took. So for now, any downward momentum that was created on Tuesday is completely non-existent at this point.

Now this isn't to say that we won't be heading down soon. I'm just saying from a technical standpoint, there is no significant momentum forming. However, one thing on people's mind as we begin to close out April is the good 'ole saying, "Sell in May and go away." Historically, May has been a strong selling month and it makes sense when you consider why. First off, it usually follows earnings, which is never the best time to trade. If we go through a bad earnings period, people are beat down with low sentiment and have little confidence to buy. If we have a good season of earnings, many stocks get overbought due to extreme optimism, which causes for a bit of a hangover effect to follow. We also head into the summer months, which for most businesses, tend to have slower sales (except homes).

However, this May is not your usual May. The market has already shown its ability to overlook resisting trends and push forward and the government continues to prove that it will do all that it can to continue to lift up the economy. Surely, the unemployment report will set the tone for the month of May. Many are feeling that this next month is the month. Job growth will look positive, GDP growth will be high, and earnings will stay strong. If data shows otherwise, I expect to see a lot of unhappy traders.

For Friday, don't be surprised to see some selling. Many people went long yesterday and today and they have received large enough gains to not have to risk holding them over the weekend. If we do start out in the green in the morning, I will most likely take some short positions, because I would expect many investors to close out their positions before close. Also, even though it looks Greece is going to be bailed out by the European IMF (which could help markets tomorrow), there still remains uncertainty about foreign economies. Happy Trading.

Following Wednesday close, Hewlett-Packard announced that they will be acquiring the smartphone for $1.2 billion. This is roughly a 28% premium to their current stock price. As a result, Palm has leaped in after hours, currently being up over 23%. These are definitely things to keep an eye out for in 2010. I expect to see a lot of consolidation and buyouts this coming year, which can lead to some very profitable returns. Right now, certain big businesses are finding strong revenues at this point in the economy. However, other smaller companies are still fighting just to stay alive. This large gap between the two is a perfect environment for some both non hostile and hostile take overs. The goal is to find the companies that are prime for picking.

Palm is a perfect fit of the "ideal buyout candidate." They are a smaller company that has dominated market share in the past and has been dwindling since. They have great brand recognition and still a pretty solid retention rate. However, they're growth has been struggling for years as has their stock price and newly entered smart phone players like Apple, Microsoft, and Google are quickly gobbling up market share. This is a perfect scenario for takeover. So keep a look out for stocks (probably under $15), who currently hold a lot of liabilities, and holds a well known name brand that seems to have disappeared the past few years. The NASDAQ will be full of them so keep your eye out.

Financials rebounded rather strongly today, which help my "straddle" position bode well for today. Much of the cause behind the strength was more Fed reassurance that interest rates are not going anywhere anytime soon. Of course many people initially applaud these announcements, hence the jump in financials today. However, when you consider the cause for the 0% rates extension, it does not reflect well on the economic recovery. The Fed will only keep interest rates this low if they feel that by not doing so, the economy would respond very poorly. So in Layman's terms, No interest rates : No economic sustainability.

This week is the markets big chance to make a run before heading back into unemployment week, which is always a nervous week for investors. With the partial rebound in today's trading, much of Tuesday's downside momentum has been neutralized for the time being, unless bears can weasel their way in tomorrow and set up for a selling Friday. I cashed out of my positions today and will most likely hold tight until mid morning to see what the charts are saying. Happy Trading.

As I stated yesterday, I closed out the day by taking both short and long positions in the market with the intent to losing one with a stop loss and outperforming the other with higher gains. Thus far, it has worked liked a charm. I was hoping for a bit more gains on the long side, but indeed the day is not over and momentum is slowly building as the day goes on. Plus, maybe for once I will gain from the PPT.

As you can see from the two graphs, both have responded to today's trading with volatility. I was able to get out of the one with minimal losses and capitalize on the gains of the other. It can be a risky strategy at times, but there are times when charts become very transparent. Today was one of them.

Tuesday experienced the largest one day decline in the markets since February 4th, as the Dow closed down over 200 points. What was even more interesting than this, was that the volume was considerably higher during today's sell off, leading me to believe that indeed the many that have been on the sidelines are more bear than bull at this point.

The big selling day was mostly influenced by the downgrade from Standard & Poor's in regards to Greece's debt from BB+ to "junk" status. The news sent markets down rather quickly as well as gave some strength to gold and Treasuries. Of course, along with the problems in Greece are all the problems Wall Street is experiencing with our banks. Goldman Sachs continues to defend its position against fraud charges and the Senate is still pushing for votes to get the Bank Reform bill passed. However, it was voted against for the second time today...Back to the drawing board.

This was the first big down day we've had in a while and it was accompanied by volume. Close to 10% gains were found in some of the highly leveraged ETFs, which I'm sure is peaking interests at this point. However, I am not fully sold quite yet in a continual drop at this point. Today's sell off was an isolated sell off day, which means a surprise news event sparked the selling. It isn't a dragging economic variable or a factoring fundamental to our economy that will have effect for months. As such, these type of selling days have tendency for quick, strong rebounds. This is what makes Wednesday such a critical trading day, as it should better define today's retreat.

On days like today, I like to open up positions right before close on both sides of the market (bull and bear). I then place very strict stop losses on both of them, as to minimize my losses. Tomorrow, I am expecting another lopsided victory, either for bull or bear. If bulls come out tomorrow, I expect a significant amount of today's losses to be given back. If the bears come out fighting once more, this could spur another strong round of selling and even more volume. I believe it will be either or. One side of my position should strongly outperform the other tomorrow. So we'll see. Other than that, it looks that some force is returning back to markets. Happy Trading.

Just as I expected yesterday, Tuesday's trading opened up hard on the downside, especially for financials. FAZ took nearly a 10% jump today off the unsettling news that continues to hit financials. I have cooled off from some of these highly leveraged ETF's recently, but is there some upside once again in some of them? The charts say so, you decide.