This is most definitely the worst stock market crash since the 1929 Great Depression.  The stock market is about to reach a total drop of 50% from this year’s high.  This is an unprecedented amount of loss money that has never reached this bad before.  Jim Cramer stated last month that he expected the stock market to drop for another 20% before it might bottom out.  Many speculators and advisors are stating that the market will not start moving up until 2009.  So, how should you take advantage of the situation?

I was thinking of doing some short-selling and buying on the dips.  The stock market lately has been still dropping lower and lower.  We almost reached the Dow Jones low of 8,000 today.  Who knows, it might hit that mark tomorrow.  This might have also been the day to buy before another sky-rocketing jump.  I will wait this one out.  I know when inflation finally hits, you will see the precious metals, gold, and silver start moving up.  But it takes time for inflation to factor in and I do believe there is a good chance for more downtown.  There has been a lot of votalitiy in this market.  Hopefully we see some bottoming out soon and we can start trying out one of these strategies and gaining some of our hard earned cash back.

If you have been reading any of the news headlines, you’ll notice in big letters ‘AIG GOING BANKRUPT, GOVERNMENT SUMMONED TO HELP’.  We had a huge 500 point drop on monday and then many fluctuations the rest of the week.  Thursday and Friday showed a huge rally that pretty much covered the whole drop from the week.  The government’s bailout scheme worked and brought the market back up.  Good for us who own stocks, bad for everyone else because we will all be part of the bailout helping the government pay out those taxes.

Tomorrow, we will either see another drop in stocks or see the stocks rise as part of the usual election rally.  I see a good chance of it dropping as short-selling is being banned for the rest of the year, which will artifically make the market rise temporarily, but finally drop again as people will just start selling the stocks.  Again, with last weeks’ news headlines like the Wall Street Journal’s big letter ‘CRISIS ON WALL STREET’, the blood might already be on the streets and its time for the recovery.  I do believe we will finally see a rise in the stocks before the year’s end.  If not the election rally, there will be the usual year-end rally.  I’m looking at november to be key.  But if you are in the stocks like me and don’t need the money right away, just hold on those stocks and let’s ride with the market.

The last time the Dow was around 11,800 was in early March 2008.  We have either hit the bottom and will move up, or it is going to continue the down fall.  Tomorrow, it should be an up day as we have had more than a few days of big drops.  The last two trading days were trying to move up but we would have sells at the same time.  If it does fall more, I don’t think we will see much more lowering.  The inflation rate cuts usually take 6-12 months to get into effect.  The rate cuts happened in late December so we should start seeing the results of them very soon.  However, I do believe inflation is going to continue to make its mark and we will see increases in price for all the goods.  If you have cash, it would be a great time to find stocks you like and buy them on the cheap.