Every big down open lately has been a buy for at least a brief bounce. It is the late-day selloff that has been the real problem for the market. Even when we do bounce off opening lows, traders are so anxious to take profits, it doesn't last for long.
The big question is what is the catalyst for upside from here? A lot of folks are looking for interest-rate cuts to save us. It is probably far more important that the European Central Bank cuts at this point rather than the Fed because of how hawkish they have been for so long. Nonetheless, an interest-rate cut at this point is like putting a Band-Aid on a broken leg. It isn't going to help much, since the real problems are far deeper.
I suspect traders will be anxious to try to play for a bounce again, but the time frames here are getting shorter and shorter. If you aren't watching the market every minute, you shouldn't be playing the bottom-fishing game in this environment.
P.S. Will you be there when Cramer makes his next move?
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Rev Shark Blog Clear the Decks and Hunker Down 10/6/2008 7:44 AM EDT The market maelstrom continues, and I'd wait for calmer seas before investing again.
Rev Shark Blog A Vote of No Confidence 10/3/2008 4:16 PM EDT The action today suggests that the Street thinks the bailout may not be the answer to our problems.
Rev Shark Blog The Day Depends on the Close 10/3/2008 2:22 PM EDT It's not going to be good if we finish in the red. Will the 'PPT' step in?
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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