The huge downward pressure on stocks is over for now, says Paul Moore. But though investors be thinking about getting back into the market, they must exercise extreme caution. The coming earnings season could reveal some more ugly numbers, while light volume over Christmas can increase market volatility.

This from Smart Profits Report:

Congratulations… you’ve almost survived the most volatile stock market of our generation.

At least for 2008 anyway.

And if you’re asking yourself whether it’s time to buy stocks as the CBOE Volatility Index (VIX) is receding and valuations are at record lows, I offer this: Before jumping back in the water, be sure the sharks have fattened up and left the area. Forget “blood in the streets”… make sure there’s no “blood in the water.”

And amid the gloom and doom, I’m also going to offer up a more bullish, optimistic outlook: While the economic outlook remains very weak, the stock

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Electronics retailer Best Buy (NYSE:BBY) slashed its full-year outlook today, saying it was “the most difficult climate we’ve ever seen.” But Paul Moore says Best Buy isn’t likely to head the same way as mismanaged Circuit City (NYSE:CC). In fact, BBY should even get a lift from the bankruptcy of its main rival just before the holiday season.

This from Smart Profits Report:

Here in the U.S., the mess continues unabated. The government had to reshape its bailout for AIG, including forking over an extra $40 billion. But despite the floundering company’s fourth consecutive negative quarterly report, the markets reacted positively to the story.

That didn’t help avert the crisis other areas, as Detroit’s automakers repeated their increasingly desperate pleas for some financial

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HIDDEN VALUE

Dear Friend,

A new month brings a new batch of depressing headlines from the real economy.

U.S. factory activity fell to its lowest level for 26 years in October. Circuit City says it plans to close 155 stores and slash its workforce by 17%, all before the end of the year. And Fitch says credit card losses will likely surpass historical peaks in 2009.

Meanwhile, Jeffrey Lacker, president of Richmond’s Federal Bank, says the government’s response to problems in financial firms may have added to market turmoil.

Still, that won’t stop it from trying to ‘fix’ things.

There are rumors of a $500 billion guarantee for distressed mortgages. There could even be another economic stimulus package in the pipeline in time for Christmas shopping. The markets are in a hesitant mood today. The leading U.S. indexes have all tiptoed around

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Many investors are turning to high dividend stocks to provide a steady income during this bear market. But Paul Moore says you have to be selective to make this strategy work. Companies that are short of cash could be forced to cut dividend payments. That’s why cash flow is the most important figure on the balance sheet for value investors.

More from Smart Profits Report:

Amid the market’s mess, many pundits have touted the benefits of dividend paying stocks.

While it’s true that dividends bring you a form of income, does it really put a floor under a stock? The argument is pretty simple. Many companies have products that are such an integral part of day-to-day life that they are…

Very unlikely to disappear. They’ve built up balance sheets that are strong enough to survive a multi-year downturn.

So instead of high share price appreciation, they repay their shareholders by passing along the profits in

...

Many investors are turning to high dividend stocks to provide a steady income during this bear market. But Paul Moore says you have to be selective to make this strategy work. Companies that are short of cash could be forced to cut dividend payments. That’s why cash flow is the most important figure on the balance sheet for value investors.

More from Smart Profits Report:

Amid the market’s mess, many pundits have touted the benefits of dividend paying stocks.

While it’s true that dividends bring you a form of income, does it really put a floor under a stock? The argument is pretty simple. Many companies have products that are such an integral part of day-to-day life that they are…

Very unlikely to disappear. They’ve built up balance sheets that are strong enough to survive a multi-year downturn.

So instead of high share price appreciation, they repay their shareholders by passing along the profits in

...