We continue to trade in a very tight range. We are doing a good job of holding on to gains but haven't been able to generate any further upside traction so far. I believe we have conditions for some positive action to continue, but what is troublesome is how the folks who were worried about the world coming to an end now see nothing but blue skies.
The hesitancy to buy a few days ago is what set up this strong move today, but there is going to be some flipping into this move as the traders who caught it lock in some good gains. Just like it was wrong to be overly negative a few days ago when the market was struggling, it will be wrong to be too bullish now and to believe that all our troubles and worries are forgotten.
The way I handle this action isn't to be negative and sell everything as others become wildly bullish but to slowly pare back positions into strength. I continue to look for new buys that haven't run too much or that look like they may have sustained momentum, but the key is to not suddenly become some manic bull who believes that the market is going to go straight back up.
We have a good environment for some upside, but don't be reckless in the hopes that all those worries from two days ago are gone.
P.S. Will you be there when Cramer makes his next move?
Strong brands and companies with vast market exposure can help bolster your portfolio. Jim was able to lock in a 64% gain by buying Ingersoll-Rand at $13 and selling at $22.50. Action Alerts PLUS members were the first to see these moves. Were you among them? Get Free Access Today!
Rev Shark Blog Classic Santa Claus Action 12/20/2007 4:27 PM EST Once the bulls get going, the bears move to the sidelines, and big momentum kicks in.
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.
RSS FEEDS
PODCASTS
