More Troubling Inconsistency

Yesterday it was a disappointment that we didn't do a better job of holding on to Tuesday's very big gains. Today it is promising that we have an upside reversal rather than follow through to the downside.

And that is what makes this market so difficult lately.

We just don't have much consistency and the potential for surprise news makes it very hard to confidently hold positions whether long or short.

While the action today is promising it really doesn't do much to change the overall picture of a struggling market. We are almost exactly in the middle of the recent trading range With recent lows serving as support and recent highs around the 50 day moving average serving as resistance for the S&P 500.

Holding within a trading range or base is a good first step in forming a market low, but that is all it is. Much more will be needed in the days ahead to give us confidence that this market really can put together a decent rally.

My hunt for good longer term charts continues to yield very little. The vast majority of the upside in this market is being driven by bounces in broken stocks rather than by continued accumulation of strong stocks. That is why there are so few good entry points to be found unless you are doing very short term trading.

The market is hitting its highs of the day as I write and looks like we may be seeing some pre-holiday short covering. I have some very short term index trades going but I'm likely to close them out before the end of the day.

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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.