Volatility in Financials Continues

The amazing moves in financials are continuing today. It really is surprising how this sector, which I avoided trading for years because it was so stodgy and slow, has suddenly become the most volatile in the market. Moves this extreme really make you appreciate how inefficient the market is at pricing stocks.

There is no way to know how much of this action is short-covering, but there certainly is some, and when you combine that with aggressive momentum players who keep on pushing to squeeze shorts more and scare in some buyers, it is really an explosive situation.

The fact that everyone knows that this move is artificially juiced to some degree only serves to add some short-squeeze fuel in the near term. Eventually, they will get hit with some profit-taking and fall fast, but you'll have to deal with some wild volatility in the meanwhile.

The pressure on oil is continuing, and that is probably fueling buying even more than the move in financials. But just like the financials, oil is very likely to see some sort of strong reversal here soon, and that is going to cause some difficulty for truckers and airlines, which have suddenly leaped on the crude pullback.

Right now, this market is all about maneuvering in the right sectors, and given the intensity of the moves, you better be very aggressive and very quick.

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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.