As the U.S. and South Korea conduct war games in a show of force against North Korea, North Korea says they are being pushed to the "bring of war". It appears North Korea wants some sort of confrontation to prove they are a nuclear power as well as show the strength of the newly appointed leader who is the son of the former leader. It seems the 25 year old who is taking over the leadership role in North Korea must prove he is a strong leader to the world.
As the weekend approaches and fear of war escalates, the Dollar became the safe haven. As the Dollar shot higher, the markets dropped sharply lower. We continue to see global instability, the one thing the Federal Reserve cannot handle. In addition to the North and South Korean conflict, Ireland's major banks were hit with credit downgrades. Portugal passed austerity measures to try and bolster their chance of avoiding the same fate as Greece and Ireland while Spain claimed they needed no help from outside sources. Of course a claim like that falls weakly by the way side as both Greece and Ireland claimed the same thing at one time.
The markets continue to be Jekyll and Hyde. When things are quiet, POMO rips the markets higher. When global issues erupt, the markets tank sharply. This type of market will remain for the next few weeks and possibly into the end of the year. Swing trades must be carefully picked and should be only short term.
Right now I am eying the retail stocks as possible pull back plays. AMZN looks ripe for a pull back in the $180 range while stocks like TIF, COH, ANN, M and others, look extremely extended. NFLX also looks good as a possible short if it crosses the $200 level.
Small cap plays that look promising over the long term are SPEX at $0.50, COIN at $0.33, AEHR under $1.00 and TORM at $8.00.
Stay tuned and be ready for action next week. The holiday is over and it is time to get back to the hardcore money making techniques.
Remember, the webinar next Saturday December 4th, 2010 will teach some new techniques never discussed in the Nightly Analysis Videos or anywhere else. They will open your eyes and give you the ability to make more money. In addition, a free week of the Intra Day Stock Chat will be included as a bonus for the last webinar of 2010.
Chief Market Strategist