Looking for Clarity

The market action doesn't get much more confusing than it is right now. After the big bounce of the last few days, with financials leading and oils and commodity-related stocks breaking down, we are now seeing some reverses. Oils have a strong bounce going and financials can't hold the early Citigroup (C - commentary - Cramer's Take)-induced strength. To further confuse matters, technology stocks are getting hit hard on the poor reports from Google (GOOG - commentary - Cramer's Take) and Microsoft (MSFT - commentary - Cramer's Take).

Navigating this market lately has required a complete shift in thinking. All the recent momentum favorites are now broken, and we have big dead-cat bounces in the worst sectors pushing up the indices.

The big question is do you jump in and trust this rotation to play out further, or do you look for oil, steel, agriculture, etc. to bounce back? Certainly the earnings are going to be good in those groups, and if they do run it will once again put pressure on other aspects of the market, but the charts are broken and not offering good entries outside of some daytrading.

I'm almost completely in cash at this point and going to wait until I have a little better clarity. I see no reason to build position trades right now, but I'll take some day trades as I find them. This is one of the toughest environments I can recall and I see no reason to do anything aggressive.

No positions.

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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.