Programs to the Rescue

With oil and commodities bouncing, the dollar weak and financials struggling, you might think the buyers would be standing aside and the indices weak, but you would be wrong. The market bounced strongly this afternoon on no obvious catalyst. There was some talk that the Russia-Georgia issue may be resolved, but mostly this looked like some major program trading.

For a while we have been very sensitive to any moves in crude oil, but then today, when crude jumps, the market decouples and suddenly spikes higher. It is tough to find the logic behind that sort of action, but I suspect that it's a function of program trading and macro funds. The way we spike and then fade has all the hallmarks of computer-generated action.

I continue to feel that we are enjoying nothing more than a bear market bounce right now, and that we are going to roll over again. I thought a spike up in oil might hasten that, but there doesn't seem to be much confidence that energy stocks can hold up. The thinking seems to be that they are going to suffer from demand destruction in a weak economy and will continue to struggle.

The bulls are still holding up well, especially when it comes to the Nasdaq and iShares Russell 2000 ETF (IWM - commentary - Cramer's Take), but momentum is slowing, and I think it is just a matter of time before the weight of the many negatives out there causes things to roll over.

Have a good evening. I'll see you tomorrow.

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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.