The dip-buyers are once again making a stand after our weak open. One of the bullish things about this market lately has been that there has been some underlying support. This past Wednesday was the first time in a while where bids just disappeared, but the buyers stepped up yesterday and they are taking advantage of the weakness this morning.
While that is certainly a good sign, I'm not convinced that they won't be eventually worn down. We don't have a lot of potential positive catalysts on the horizon, and we have been strong enough long enough to keep sentiment positive.
I've been focusing on some energy plays here but am looking to press some index shorts should we test our opening lows. Breadth is poor with some minor strength in retail and financials. Oil, gold, steel and other "weak dollar" plays are lagging.
Rev Shark Blog No Trust in the Upside 5/8/2008 4:17 PM EDT There's a good chance the buyers may lose confidence as the momentum starts to let up.
Rev Shark Blog Looks Like an Oversold Bounce 5/8/2008 1:40 PM EDT Traders are overlooking weakness in retail and finance stocks.
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.
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