Dip-Buyers Not Showing Interest

The typical pattern lately has been a flattish open, a minor pullback and then dip-buying that takes us back to the highs of the day. Yesterday the aggressiveness of the buying slowed, and we didn't get the squeeze that has been so common recently, but we did hold up fairly well.

The action this morning is a bit deceptive. There isn't a strong underlying bid, and we're drifting lower. The Dow is up mainly due to one stock, Procter & Gamble (PG - commentary - Trade Now), and there isn't any leadership.

Breadth is starting to slip, and with the dip-buyers not showing interest, the rush to lock in profits is starting to intensify. The most important thing to watch for now is the vigor of a bounce. If the bounces are sold into pretty quickly, then the dip-buyers will start to back off, and that is what will get a downtrend rolling a bit.

I've been doing a lot of selling this morning but still see a few things of interest, such as Vivus (VVUS - commentary - Trade Now) and Rino (RINO - commentary - Trade Now), which I am actively trading.

At the time of publication, DePorre was long Vivus and Rino.

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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.