We continue to have some very tricky trading out there. While the market has been fairly week, we are seeing some very sharp upward spikes that fail to gain traction. Those spikes are big enough to squeeze the shorts and keep the bears from pressing, but they aren't lasting. We just had another one that is slowly fizzling, and we had a similar one Thursday. I suspect that the bears are lacking confidence and are quickly covering when we have some upticks.
In addition, we continue to see this on again/off again rotation from weak-dollar plays like oil and steel and into stronger dollar plays like financials and retail. Today we have rotation out of the weak-dollar plays, but not much rotation into anything new. For example, many oil stocks are weak, although crude oil is up, but we don't have any major sector doing anything to the upside.
I'm doing some short-term trading and sticking with a very defensive posture.
Rev Shark Blog No Trust in the Upside 5/8/2008 4:17 PM EDT There's a good chance the buyers may lose confidence as the momentum starts to let 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.
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