At midmorning it looked like the sellers were going to dominate, but the dip-buyers stepped up and have managed to pare losses quite a bit. But the bounce is fading fast now, and it is going to take some work to push us back up. The market just doesn't have a lot of direction at the moment, so we are getting a lot of random motion as traders push things around while they look for action.
The biggest negative for the market right now is that we've used up a lot of the positive catalyst. The Fed has made major moves already, and there aren't any great expectations for anything else dramatic in the near term. The market has to wait and see how some of these actions, such as the term securities lending facility (TSLF) auction, play out, and that is going to take time.
Frankly, I have a hard time buying into the argument that everything is getting better now that the Fed has made some moves. It might be a start, but we have a very bumpy road in front of us, and with earnings season coming up, things are sure to stay volatile.
A short-term perspective is the only way to deal with this market for now. The bottom is not in, and we shouldn't assume that the major trend has turned up.
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.
