This has been the first week in a long time I have heard the consistent talk of a possible bottom. Technical charts could still break down, but many of the experts are saying that the small and midcaps are starting to lead us out of recession. I am unsure they are right, but I think we could see a leveling out of respect to the S&P 500. One company that seems to be following this thesis is Electronic Arts (ERTS). Their terrible miss with respect to earnings should have caused this stock to lose 20% of its market cap, but instead we saw a rally in the stock based on a "not so bad" guidance. Jeff Macke was dead on when he bought calls, too bad I owned puts.

One sector that could be a good buy, is the deep sea oil drillers. Oil service looks ok, but companies with high specification semi submersibles seem to be very well positioned. I had owned Transocean (RIG) and Diamond Offshore (DO) for quite some time before selling them for profits, as the price of oil started to tumble, but I believe stocks in this sector could be a good place to be with respect to a possible run in stocks, that should also see an increase in the price of oil.

As an investor, it is very important to understand the basics of what you are investing in. Not only the business, but why the particular company has a niche that creates a good outlook going forward. It is very easy to understand some businesses, like Apple (AAPL) for example. The investor can go to Best Buy (BBY) and try out the latest IMac, IPod or Safari software. This doesn't always hold true, as some businesses are not as tangible or at least readily visible.

This is what makes the business of fertilizer difficult. Your average consumer will go out and buy fertilizer at Wal-Mart (WMT), not thinking about what is in it. Even farmers will check their chart of what type to order for the upcoming planting season without looking as to why the makeup is important. Not all farmers, but most didn't have a college education just twenty years ago, and now they are sending their kids to get degrees, so they know how to increase yield by using the right herbicides and insecticides. Even the correct type of genetic seed can make for a much better plant.

How does one navigate these incredibly difficult markets? Is it possible for an investor to have success even if he does not have the ability to sit by the computer all day long placing trades? The initial crumbling of the financials made it easy for Bears, but as many of these companies have disintegrated, it has become a very iffy situation placing bets to the downside, as any new news could cause one of these banks to take off or the market to go up 500 points. On the other side, it is difficult to invest in stocks as it is difficult to know which companies will go under. Circuit City just announced they will be closing the remainder of their stores, another company to be chucked to the wayside as they were unable to obtain financing to either sell the company or keep it going until the consumer recovers.

The first and most important decision in making an investment is with regards to sectors. Before looking at any individual stocks, first find a sector that seems oversold. If a sector looks good, any stock within that group will benefit from the good news of the other stocks. These can be checked by following any of the ETFs that are sector based.

The large swings in every aspect of the market have created a dislocation of many companies with respect to their markets. Just like the rollover of the deep sea oil drillers where Jimmy Tisch was able to purchase Diamond Offshore (DO) for the same amount it would cost to scrap the company, there are other companies that look to be in dire straights.

To pull off this type of investment, you must see value where others see insurmountable problems. These bottom feeding principals are such that you are able to see value even if the industry rolls over, with the ability to buy the assets and overcome losses that may cripple the underlying growth of the company. As with Diamond Offshore and drilling prices headed south, other industries are seeing the same problems. A keen investor will scoop up some of these companies in the hopes that the truly brilliant will see value and buy them at a amount much more than what you paid.

A remarkable man once said," For every action there is an equal and opposite reaction.". This seems quite credible as it has been the basis for all things up to this point.

It is easy to be quite bearish now as the market has collapsed from its highs. It seems that over the years Warren Buffett has used this to create his vast wealth and should continue to into the foreseeable future. If this holds true, it seems that many could become rich on the losses of others, and all you have to do is look deep inside yourself to find out if you are going to become one of the big winners or big losers.

When looking at the Dow Jones, it is easy to figure out why we have had such a huge downturn. Many don't understand what has really happened as the political system and current Presidential race have skewed the information as politicians point fingers instead of fixing the problem.

The reason why what really happened is difficult to disseminate is it would mean the average citizen would have to accept some blame. Where I live, we didn't have a huge housing boom, but did benefit from some increased real estate values. This is why I find it acceptable that the average person here doesn't understand, but in other areas this ignorance is making me scratch my head.

With the large run on the stock market on Monday, many believe that we are out of the woods. The marked pessimism on the economy is probably closer to right as I think there is still more pain around the corner.

Don’t get me wrong, the downside is limited, but equities seem to have little to cheer about and PPI and CPI numbers are coming in particularly low. I believe we will see trading in the 8000-10000 range for some time to come. The main reason for this is not the housing market, as I believe that was placed under control, but the possible global recession that seems to be heading our way. If you thought our housing market was bad, take a look at Europe, as they did very little to get ahead of this problem and are now scrambling to find a bottom to their economy. All of this is bullish for the dollar, but one may want to look to the yen for shelter going forward.

Many an investor has given up on the energy play. As oil has buckled, alternative energy stocks have been hit.

The reason the fossil fuels are so attractive, isn't their appeal but because their usage can be day or night and does not rely on the weather for generation. It stands to reason that investment will suffer somewhat with respect to clean technologies, but oil at $100 a barrel or even $60 will make it conceivable for increased development.

The market saw a major change yesterday. The eight dollar pull back in the price of oil looks to have at least set its price to trade between the $100 and $110 mark. This is only speculation as a new trading pattern has not established itself. If we were to listen to many of the energy experts, as with T. Boone Pickens, the $100 bottom is almost here. With that said, it should stimulate some growth in the US stock market as the dollar should strengthen somewhat and although there is a global slowdown, generally speaking US stocks should see upside going forward. It is even much more bearish for oil since this happened during hurricane season.

One of the best stocks in the stock universe is MasterCard (MA). I made a call on MA on theupdown.com six months ago and have seen a pop of 25.71%. I like the stock here as it has seen a sell-off since its highs of $320 a share.

In a very short period of time, we have seen the spot price of uranium drop by over 50% after massive speculation had pushed the price up. There was a time when uranium producers could barely make a profit, as only those companies with high grade uranium could sell for a profit. Uranium producers were among the agricultural companies as they had trouble breaking even. With countries like China leading the way, and current countries like Japan and France showing the viability in the market, these companies could see a great profit going forward.

I do like Cameco (CCJ) at this point as it is a huge producer and has great holdings with respect to yellow cake. This company is a buy now as it has pulled back on bad news about its Cigar Lake holdings and the constant flooding slowing its ability to begin producing. CCJ is a much more conservative holding based on their legacy contracts, and should be looked at hard at these prices.

When looking at Potash Corp.'s (POT) value as a publicly traded company, I think that many are missing why they are much more valuable then their current valuation. Many believe that the fertilizer stocks have been driven up just like many of the commodity stocks. Commodity stocks have had a run as the dollar has devaluated, but there is one large difference with respect to fertilizer: people have to eat. Food is a basic necessity such as heat and water and as the world's population increases its intake of meat, it will continue to increase demand for feed which is comprised mostly of corn. The basis against fertilizer is generally ethanol, as it is currently using approximately one-third of the United States' corn crop.

Another important factor with respect to many of the agricultural stocks is that they are not the boring stocks of yesterday, but more of a technology play. Look at Monsanto (MON) and their 'Roundup Ready' products. The reason farmers use Monsanto's seeds are because they raise yield. This is important, because if you have already maxed out your farmland, the only way to increase your crop is through increasing yield. This is where fertilizer comes into play as its sole purpose is to add nutrients and increase yield. If you look at many of the emerging markets, many of these countries such as China and Brazil have very low yields when compared to the United States and Canada.

With the pullback in oil, many of the oil service companies have seen a dramatic decline. This is strange as many are not linked directly to the commodity itself and still have very nice looking futures ahead.

The best looking of the bunch seems to be Transocean (RIG). They not only have a monopoly in the area of deep oil drilling, but they are financially sound and in a sector that looks good going forward. Even with the price of oil at $100 a barrel, it is profitable to pay Transocean as much as $500,000 per day. Since many of the large land finds with respect to oil are gone, exploration is moving outward into the deeper levels of the oceans and this may be where some of the largest finds are yet to come.

With all the talk of the crash of commodities and resurgence of the US dollar, it is easy to forget key growth companies that have held up well in this volatile environment. As investors flood into many of the financials, it has been easy to forget some of the new healthcare companies.

Healthcare changes have been sweeping through as Medicare continues to cut reimbursement. These cuts place pressure on companies to lower costs as they see their margins cut. Pharmacy benefits managers seem well placed going forward. Not only has this group shown resiliance in a tough market environment, but they have also shown the ability to increase margins, even in the face of decreasing revenue.

With the economy going up and down, it has made many investors wary of making investments with respect to the long term. Even though the market has suffered, there are still a few good plays. Many areas are in long term bull markets that, in my opinion, are just taking a breather and the smart investor could make a bundle jumping in at today's prices. I have hammered the agricultural bull over and over and still believe that it has legs going forward. If you look at my call on CNH Global  (CNH) you will see why many companies do look good going forward.

Deere & Co. (DE) seems be a good investment after a disappointing third quarter. In my estimation, DE has been hammered by its exposure to construction equipment, as the United States is in its second worst housing environment in history, second only to the Great Depression. Investors are overly interested in the price of steel margins, but are not as concerned with the price of fertilizer.

Sometimes Wall Street gets ahead of itself, and sometimes it doesn't. The current market looks as if the financials are making a huge turnaround and many commodity stocks are pulling back, even in the face of estimates being raised for
the year. I believe that we made a huge step with respect to write offs in financials, but most likely there will continue to be pain. Anyone that ventures into the unknown now had better have long term targets and /or be an expert in
trading, as the markets tip to the extreme on any comments either positive or negative.

I am unsure as to the gold market and other precious metals, and look somewhat positively on the current coal and steel markets, but most of all I believe that the
agricultural markets will continue to roll. Looking at their current run, many have taken the negative side based only on the belief that nothing goes up forever, but I have not seen anything that points to a slowing of agricultural commodities in
the near term.

The US bear market has affected dozens of companies, many in the financial sector. US consumers have seen their disposable income decreased substantially and they are unable to refinance their homes to get some needed relief as the mortgage market has tightened. Inflation with respect to energy has really hurt commuters as we have seen gas prices shoot through the roof, and they have had no other option but to trade in their SUVs and squeeze their two kids and family dog into a Prius.

This doesn't mean short everything, but I am seeing a change in the market that is somewhat confusing. Citigroup (C) and Merrill Lynch (MER) came in with earnings and still had substantial write downs but not apocalyptic by any means. Microsoft (MSFT) and Google (GOOG) didn't do as well as many thought but that was on the heels of IBM (IBM) having another good quarter. The selloff in the Nasdaq Friday seems to be a little too much as I do not believe that things are as bad as many think.

I have heard many opinions about the state of the financials in the United States. The arguments are that either these stocks are already at, or close to a bottom. I don't believe we are there yet.

I know there are plenty of opinions that believe that this is a housing crisis. I think the housing market is bad, but believe the leverage that financials had on subprime lending is going to be even worse. In some instances, banks are writing off more than they have earned in their entire history of doing business. The biggest problem is that forclosures look to at least be holding steady and maybe even increasing.

Many of the largest publicly held companies have seen their stock prices take a nose dive. The problems with the massive depreciation is after a stock is down that amount, many average investors start to dive in.

This reminds me of a time when Tyco had lost over half of its value. A large corporation that had turned itself from a small business, had become a conglomerate that could easily compare itself to GE (GE). Even though this company had a great history, it was eventually going to lose yet another half of its value. No one could have seen that their CEO would go to prison, or that they had lied on their financials, just like all of the other companies, or at least most, on the Street. I had believed that the stock had to go up after its massive fall and although I received compensation from the lawsuit, I was still sitting their with a $2,200 loss.

My favorite company within the agricultural equipment industry is Amsterdam-based CNH Global (CNH). CNH has seen its stock price cut in half since it peaked on January 3rd. Although it has broad exposure to construction equipment, the company is seeing massive demand for its high priced agricultural equipment.

CNH is coming off of its best quarter in company history. Consolidated revenues were up 26%. Net income increased 18%. Their equipment operations operating profit was up 21%. Diluted EPS was up 20%. They also confirmed their 2008 outlook of $3.30 to $3.60 per share.

I would not say that the state of the US economy is in jeopardy, but it does look to have some problems. What many thought would already be over seems to be stringing out over a much longer period of time. Many on Wall Street have said that the third quarter of this year would see the stock market edge higher with a stellar fourth quarter.

These estimates have changed as it looks like the US economy is stuck between a rock and a hard place. The hard place seems to be the current housing market and financials that are holding the equity behing it. The rock is inflation and oil as they seem to be running hand in hand. The beauty of the stock market is that we know from experience most bear runs are much shorter than bull runs, but they are also much faster moves.