The good news is that the market bounced a bit after some ugly selling Wednesday. The bad news is that it was pretty feeble, and doesn't look like it will last for long. Although we finished in the green, volume was light, breadth was just about flat and we ended up closing in the middle of the day's range.
Given the recent run we have enjoyed off the March lows, I suspect there is still a contingent of folks who are buying the "worst is over" argument, and they are giving us some underlying support. We haven't had enough weakness yet to scare this group away, but I'm looking for them to lose confidence gradually as upside momentum continues to cool.
I didn't do much today, as I don't trust the upside to last, but I don't want to be too aggressive on shorts until we have a few more cracks. I still am looking for this market to roll over and produce more downside, and nothing that happened today has changed my mind.
Rev Shark Blog One-Day Hiccup or More Downside? 5/8/2008 10:45 AM EDT The view of Wednesday's action seems to be as a mere speed bump, but I'm not so sure.
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.
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