Traders Finding Pockets of Momentum

After a big gain on Tuesday, we were primed for some profit-taking today, but the bulls did a commendable job of holding things up. We had a little selling in the final minutes, but we came back nicely this morning from a profit-taking dip.

Volume was light, which is what you want to see on a pullback, but it was awfully light yesterday as well, given the magnitude of the news and the price move. That is probably an indication that this is just end-of-the-year trading action rather than big institutional accumulation or major asset reallocations.

The favorable technical conditions remain in place. Traders are obviously seeking out pockets of momentum and keeping they active. Today, solar energy, steel and casinos attracted quite a bit of attention. Bulk shippers and gold continued their recent momentum, and it is nice to see things that can run multiple days in a row. That hasn't happened in a while.

This atmosphere feels like pretty typical holiday-type trading. The traders are gunning things and aren't getting too much interference, but it is still quite choppy. We'll continue to play that game while we can. The big bad bear is just taking a nap for now.

Have a good evening. I'll see you tomorrow.

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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.