Is the Stock Market Glass Half...

Empty or full??? Well if I were looking into what most economists have predicted for 2009 I would take the glass and break it!!! Now I know that isn't the rosiest outlook that you would like to hear but hey I am just being honest. The picture for 2008 wasn't pretty so I find it strange that all of a sudden once again you have so called web and tv stock "pro's" still telling you the coast is clear and head back into stocks just because we change the calendar year.

The strange thing is if you were to call or write in and have these pro's substantiate why they want you to get back in they give you the same tired response (this is my guess):

~ Treasury yields are so low, its time to get out and make some money.
~ Rebounds start 4-6 months before everyone finally recognizes the "recovery" period is happening...don't miss the rally
~ Many evaluations used to evaluate stock prices tell us that stocks are cheaply priced

Now my goal is not to sound pessimistic, but I want to be the voice from the other side that levels the playing field. DON'T MAKE THE SAME MISTAKES YOU DID LAST TIME! Follow the one thing that doesn't lie and that would be the numbers. I am not asking you to be an expert but find relevant information, like the fact that the unemployment numbers come out this week and read articles about those key numbers. I read that unemployment numbers are going to come in around the 690K level for the month of December. I read this and said WOW, I don't really know what this means...but its sounds important. Then I read further and they said the unemployment numbers for November came in around 490K job losses that month. Now I can start guessing what these numbers could mean. It didn't take me long to determine on my own that an increase from November to December has to be a very bad sign and this can be backed up when we read articles last month when people talked about how bad November's numbers were. The last trick is to read more articles that are consistent with this prudent thought that if unemployment continues to rise then the economy will continue to struggle. Seek out these articles over time and start to determine themes that surface around the key numbers that you are researching (i.e., major stories).

I have determined high unemployment is a bad thing. See I keep it simple! And recent headlines that seem highlight high unemployment, a cold winter, and people like you and me not wanting to spend our money on anything. So I take these points and turn them into trades:

Article "Intel warns for the 2nd time on their quarter results" - Confirms that people ain't got money to buy expensive gadgets and computers!
Trade: The easy one is Intel and if they are best in breed all chip stocks will suffer. BUY the ETF: Ultrashort Semiconductors (this is like shorting chip stocks twice...double your bang)

Article "Friday unemployment numbers above 670K) - Confirms job losses are rising
Trade: This one logically tells me more job losses mean that people won't be paying off bills and especially debt! SELL: Companies that sell consumer debt - Banks (Capital One, American Express, Citigroup)

Article "Cold winter across certain regions" - When I'm cold I turn the heat on, and you either got gas or electric! Trade: Natural Gas and utilities may be solid here because people need them in this weather and they traditionally offer steady dividend returns.

StockPicker Highlight:
This year I am playing the headlines...logically of course to spot trends. Look at the results from our bailout article. 3 out of the 4 auto parts makers we bought have risen...not bad.

And shorting Capitol One hasn't proven to be the smartest trade yet but this proves price is an important factor. I still like this trade but if I were to have this in my portfolio I wouldn't short it until it reaches 34.

Stay tuned.