Oh well, here we go again. After spending the last week or so losing 700 points and falling below 10,000 points at the close. Everyone who feels that the stock market is on the rise again. Earnings season is upon us as a matter of fact we have Disney reporting after the close. I am pretty sure that they will not beat the street. Why is that? Besides the fact that I am a season ticket holder and have seen how much business they have lost in their Parks. Their latest movie, The Princess and the Frog, did not do as well as it was expected. They also have to take into account the fact that they bought Marvel Entertainment Inc.

To get back on my original thought, It seems that the media is talking about how this rally is “real”, I don’t think so. How can it when you have sales down in many business’ and people are still losing their jobs. Look before you leap back into any stocks at this time. Yes, I know the markets have corrected themselves in the last week or so, but isn’t that what we were saying a year and a half ago? History has shown us that there is always a second bounce. It’s my opinion that we will see the second bounce some time in the first half of this year.

I’ve been sitting on the sidelines for the last few months when it comes to actively trading on a day-by-day basis. I did make some acquisitions of some stocks like Ford (NYSE: F), as well as Apple (NASDAQ: AAPL). Those trades were made for the long haul since I do have confidence in those companies and the people running them. I’m going to continue to wait for the other shoe to fall before I get back into the day trading. My advice to you is to do the same, but then again who am I?

Do what you may ,but consider yourself warned.
Happy Trading.

P.S. If you’re looking for some help in the stock market, Try out a free trial of Jim Cramer’s Action Alerts from The Street.

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The first day of trading after the labor day weekend has been very interesting. The three indicies finshed the day higher, Dow up 56 points while the S&P 500 closed at 1025.39 and the NASDAQ did the best of the three closing at 2037.77 (up 0.94%).

That wasn’t even the most worthy news of the day, that honor goes to the price of gold, which went above $1000 for the first time in quite some time. The U.S. Dollar lost value today and with that going on, the Commodity sector gained throughout the day.

This week will be a very telling sign of things to come in the near and distance future. Just to be on the safe side, I will be treading very carefully through it all. For those of you that want to try out a different trading technique but are afraid to do it in such trying times, here is a free fantasy stock market game that you can find out if those ideas will pan out.
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What can you lose? It’s FREE.

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Yesterday the news came out that new home sales jumped 9.6% for the month of July. It was the fourth straight increase in sales. Sales rose to an annual rate of 433,000, up from June’s rate of 395,000. Many are saying that the bottom is definitely in and now is the time to buy, but is that really the case.
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Yes, sales are up more than 30% from the bottom in January, but nowhere near the peak of four years ago. Of course that’s was because of the inflated bubble that was created by the Fannie Mae and Freddie Mac sub-prime loans.
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So does this really mean that the bottom is in and we can expect the economy to turn around? I doubt it. Why I think that is because of the fact that the numbers are (I feel) are mis-leading. Many of the new home sales that have been happening in the last month or so were first-time home buyers. That’s because of the government’s incentive plan for first-time homeowners who qualify for an $8000 tax credit. That in itself is misleading on the fact of it’s a tax credit, not a rebate. Which means of you don’t have enough of tax liability, you won’t be able to write off all of the $8000.
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What does that mean for the industry? Well, home builders saw a jump in their stock price today, but will it be able to maintain those levels? I doubt that too. mainly because when the program will be terminated at the end of November. I believe the market will dry up again with sales. As it is, some builders have already seen a dip in home sales. In Arizona, A.F. Sterling Homes stated that sales in July stalled because the builder couldn’t guarantee the homes would be completed in time to qualify. The industry (real estate agents and builders) are really leaning on Congress to extend the the credit on the grounds of the sales could reverse from their current trend. As a matter of fact, Randy Agron, the vice president of A.F. Sterling Homes was quoted as saying “The real estate market is really a fragile thing. It’s not the right time to take (the tax credit) away”.
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With that in mind, do you really think the bottom is in? It has been proven in the past that when the government gets involved with trying to “save” the economy, it actually extends it by not letting the free market follow it’s natural course. With this program as well as the financial bailouts and “Cash For Clunkers”, we have three major industries being manipulated within the American economy.
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All I can say is…hang on, it’s going to be a bumpy ride.

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In the last week or so the solar power companies have been getting down graded from several different analysts. The reasons vary from one another, but the message is still the same… stay away from the sector. The alternative energy sector has made some good gains in recent months, but then again almost everything has made gains since the lows of March.
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The leaders in the sector have really taken a turn down from where they were just a few months ago. First Solar Inc. (FSLR:NASDAQ) was as low as $100 in March climbing nearly 100% to it recent high of over $200 in May and has really taken a beaten since then.
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That’s not the only solar companies that has fallen out of flavor with the analysts. Typically when the price of oil starts to rise, the alternative energy sector gets some headwinds because of the fact that it makes cost effective sense to invest in the solar and wind power stocks. The problem here seems to be that the competitiveness of the sector has gotten really tight causing companies to cut back on their own pricing to compete with others in their market. Each of these companies are trying to get a bigger market share and to do so, pricing and profit will be taking a back seat at the moment.
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Here at Beating The Stock Market, I’ve been very positive about the alternative energy sector and have made plenty of money in trading these stocks. When news like this comes out from several different sources, I tend to stay away from the sector. Too much negative views on a sector does not sit well for me and I will wait and see before I jump back on board with solar or wind power stocks.

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