The upside momentum continues in the first half hour of trading as the underinvested scramble to add some exposure. Energy, steel and commodities continue to lead but financials jumped in as well after being a laggard lately.
The home sales, factory orders and ISM numbers were mixed to negative, which has triggered a pause in the buying, but we are still holding well with extremely strong breadth of close to 4 to 1 positive. If breadth erodes, I'll be looking to press some index shorts, but right now the momentum is still strong.
I'm playing with some very thin stocks on the long side but I'm not finding much that isn't extended at this point. The index shorts are looking more interesting now and hopefully, if they pull back a bit, that will give us some better entries without killing the charts.
P.S. Will you be there when Cramer makes his next move?
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Rev Shark Blog Don't Trade on Hope 1/6/2009 8:42 AM EST Seasonal strength has many charts looking stretched to the upside.
Rev Shark Blog Profit-Taking Replaces Santa 1/5/2009 4:24 PM EST Will the end of seasonal positives lead to aggressive selling?
Rev Shark Blog Fear of Being Left Behind 1/5/2009 2:15 PM EST Missing a rally may be worse than taking losses.
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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