The market typically tends to have a positive bias prior to a holiday, but this morning is a sea of red. Breadth is horrendous, with 500 gainers to 4,400 decliners, and no hint of buying interest.
I've been talking about some of the temporary drivers that have been holding up the market lately, like the Russell rebalancing, window dressing and new-quarter inflows. There certainly did a nice job of keeping the market up and making the bears uncomfortable, but the bulls never really got much traction going. Now those drivers are over and it's the bears' opportunity to press. They are doing a pretty good job so far this morning, but the real hallmark of this market since March is that we have been saved every time it looked like we were close to cracking.
It is unusual that we'd see a big downside move prior to a holiday, but we sure are getting one so far. Trading is going to be extremely thin later in the day and maybe that will attract some traders looking for quick bounces, but action this ugly is likely to send most folks out the doors for an early start to the holiday.
P.S. Will you be there when Cramer makes his next move?
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Rev Shark Blog Such a Skittish Market 7/2/2009 8:29 AM EDT The jobs data could whip us around in this thin-volume environment.
Rev Shark Blog Running Out of Road 7/1/2009 2:54 PM EDT Despite temporary support, this pattern suggests we won't run much more.
Rev Shark Blog Your Move, Bears 7/1/2009 4:40 PM EDT The end-of-quarter market boosts are over, and we'll see if sellers can press their advantage.
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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