Market Still Has a Lot of Work to Do

The bulls managed a little bit of a bounce, but overall there is little energy to the buying. Oil continues to stay near highs, and until that changes, this market is not going to be able to do much on the upside.

One of the most troubling things about the action over the past month or so is how weak the bounces have been. Market players have been much more inclined to sell into strength rather than worry that they are missing out on future upside. The bounces do not indicate any pent-up buying demand. There is little anxiety about being left out of a rally.

Despite that lack of vigor, we still seem to have a fair amount of hope. For example, we have the usual folks on CNBC delivering "happy talk" and excuses for poor economic reports. That certainly is in conflict with the very negative anecdotal evidence about the economy that I continue to encounter among the people I talk with. The average person out there is concerned about gas prices, the housing market and the economy, yet we have so-called economic experts telling us that "there is no evidence of a recession."

The action today changed nothing about the state of the market, and that isn't surprising. We had some minor bounces but we are still a bit oversold. The big picture remains very poor, and trying to anticipate a turn here is very dangerous. Technically, all the major indices are broken, and it is going to take a lot of work and some time before they will be repaired and we can start building longer-term positions again. The good news is that if you are holding high levels of cash, you are going to have some great opportunities down the road. Just don't get impatient.

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James "Rev Shark" DePorre is the author of Invest Like a Shark: How a Deaf Guy with No Job and Limited Capital made a Fortune Investing in the Stock Market. He is founder and CEO of Shark Asset Management, an investment management firm, and he also operates sharkinvesting.com, an interactive online community that serves and educates active investors. DePorre holds business and law degrees from the University of Michigan, is a member of the Michigan Bar Association and a former tax attorney and CPA. He lives in Anna Maria Island, Fla., with his wife and two children. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Rev Shark appreciates your feedback; click here.