Please use Subprime Blogger to get your daily mortgage rates.  Now that the government is trying to cap interest rates, you could save a great amount of money by keeping up with where rates currently are.

As you can see from the chart above, the stock market currently sits in a very unique position.  The golden cross of the 50 day moving average above the 200 day moving average is usually very bullish but if we see a strong breakdown below the 200 day moving average things could get very ugly for the overall stock market.  It will be very interesting to see what happens in the near future, but there will be a strong move made one way or the other.  Over the long term, I remain bearish as the economy has not gotten any better.  Over the short term, the move in the next few days will determine where the market is headed.

Another breakdown in our stock market and it will be interesting to see if the government will continue to print money.  Eventually the countries that are lending us money are going to figure out that we are trying to print our way out of this recession and it has not worked.  Once things settle, we are going to see average mortgage rates MUCH higher as inflation will hit hard.

No one knows how the stock market will react to the earnings reports of the major banks, but logic says that if you continue to lose money, your stock should retreat.  Some of the financial stocks have been beaten up so badly investors feel that must go up.  Well, if that were the case, why are Freddie Mac and Fannie Mae trading under $1.  If troubling times continue, as I think they will, these banks are not going to be able to produce a profit.  They are so entrenched in subprime mortgages that they will not be able to pull themselves out for several years.

If you are not a proponent of shorting stocks, a hedge against the current economic crisis is buying precious metals, particularly gold.  It is almost a given that inflation will rear it’s ugly head sometime in the near future.  If inflation is a strong as I think it will be, we could see gold go to over $3000 an ounce.  Peter Schiff actually predicted that gold could go to as much as $5000 an ounce before President Obama leaves office.  How can you argue with Mr. Schiff?  He has been right on almost every other prediction he has made!

Be sure to check in every Saturday as I will post my weekly stock market analysis.  Bookmark the link below for easier access to the content.

• Stock Market Analysis

Since March 6th, Citigroup is up over 150%, Bank of America is up 100% and Wells Fargo and JP Morgan are up around 50%.  While these companies have seen heavy losses over the last six months, it is highly likely we will see a strong pullback in these financial institutions.  Another area of concern is the life insurers.  Lincoln National and Hartford Financial were each up over 60% during the March bear market rally.  As I have stated in the past, we are likely to see a Life Insurance Crisis so there is no way these stocks will continue upward for a sustainable period of time.

We all know that shorting any stock is very risky but this is where the big money is made.  If you had shorted some of the fianncial institutions a year ago, you would have almost doubled your money on many of these companies; some shorts would have doubled your investment in a matter of weeks.  With that being said, if you do not like the risk tolerance of shorting stocks, now would be a great time to buy the SKF which is the ProShares Ultrashort Financials.  These ETF is prone to some wild swings so hold on for the ride.

If you are not bearish on financials but do not want to own them either, a great place to be right now is commodities.  I have repeated for over three years that commodities are the place to be for the next decade.  Since then, gold has surged from $625 to $950.  Crude Oil has come back to reality, but this is a great buying opportunity as the world will never stop using oil.  Some of the declines in base metals has also offered great opportunities in the last six months.  Overall, if you buy and hold commodities for the next five to ten years, you will not lose money.  Some commodity ETFs to buy include GLD, DBA, DBB, DBP, DBE and SLV.

Overall, I feel that the market will see several bear market rallies over the next few years, but it will be very hard to make money unless you are a trader.  If you buy and hold, you will watch the stock market grind sideways as inflation increases.  In essence, you will make no money on your investments.  This is why I suggest you put your money into commodities if you are a long term investor.  The commodities bull has a long way to run if history gives us any indication.

Tune in to Subprime Blogger each Saturday for a weekly Stock Market Analysis.  Each week I will give you my feelings on the current market and where you should put your money.  Make sure to bookmark the page below for future stock market advice.

• Stock Market Analysis