Stock Market Analysis – 09-08-2008
The dollar continued to rise as hopes for a better credit market boosted the stock market. The advance/decline ratio was tilted towards the advances, with volatile results across the board. Expectedly, FNM and FRE got destroyed today, losing over 80% of their market cap and plunging from over $7 and $5 respectively to under $1 today. With 52 week highs in the 60s, $5 may have seemed like a bargain that you could make a lot of money on, but let this be a reminder as to why you shouldn’t trade against the trend. This is far too common of an occurrence to make trading "bargain stocks" a profitable habit, or maybe you forgot about Bear Stearns (formerly BSC) already.
Stock Market Analysis – 07-14-2008
More weakness in the banking companies forced another down day. With IndyMac going down people aren’t asking when the credit crunch will be over anymore, they’re asking which bank will collapse next. Just like last time when Bear Stearns crash landed, commodities are going crazy once again. Gold especially is going off the charts. I still don’t think this decline is sustainable, but definitely pick your spots if you’re day or swing trading since the volatility can be very profitable if you manage your risk here.