The market has not been able to hold on to a spike on a reversal in oil, and that is a very poor sign. The buyers are obviously skittish, and the fact that they can't get something better going when we are technically oversold and have a big reversal in crude is not very promising. Interestingly, oil stocks are acting fairly well, although crude is negative, and I still believe the group has some potential upside in the near term.
Leadership is in oil, steel, solar energy, coal and commodity-related stocks while drugs, chips and gold struggle. Technology is mixed despite strong action in Hewlett-Packard (HPQ - commentary - Cramer's Take). Volume is running a little heavier today but is still quite light overall.
The best-looking sector on my screen right now is solar energy, and I'm tracking that group to look for some additions to my Energy Conversion Devices (ENER - commentary - Cramer's Take) position. Apparently a lot of folks don't believe that the energy group is dead, and they are building their solar positions in anticipation of another run in oil.
At the time of publication, DePorre was long ENER.
Rev Shark Blog Oil Makes for Tricky Trading 8/20/2008 11:10 AM EDT It can be tough going when the market, and your trades, reverse course every 30 minutes.
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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