Goodbye Momentum, Hello Flippers

We have positive action out there with the indices up and pretty good breadth of 3,500 gainers to about 2,050 decliners. However, most of what I see is dead cat bounces in broken stocks. There isn't much that is trustable for sustained upside. Traders aren't looking for momentum they can ride but for some buys that they can quickly flip.

The trading that works in a market like this is much different than what worked back in May and June. We had some major momentum action back then, particularly in small-caps. Solar energy, China and low-priced biotechnology were being aggressively traded and there were very strong bids under the market.

The market is much different today and if you don't recognize that and adapt, you will lose money. You can't chase momentum because it isn't lasting and the dip-buyers who held the market up so well don't have nearly the same resolve.

As always we have to watch for last-hour games, but so far the bounce in this market is surprisingly weak. I expected we'd see something better than a couple marginally positive days. The bulls might still gun us a bit into the close but when you look at the action over the last few days, the phrase that comes to mind is "short setup."

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Know What You Own: Solar stocks that may interest investors include LDK Solar (LDK - commentary - Trade Now), SunTech Power (STP - commentary - Trade Now), MEMC Electronic Materials (WFR - commentary - Trade Now), First Solar (FSLR - commentary - Trade Now), ReneSola (SOL - commentary - Trade Now) and Kyocera (KYO - commentary - Trade Now). For more on the value of knowing what you own, visit TheStreet.com's Investing A-to-Z section.

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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.