A Weak Bounce

 | Mar 05, 2012 | 10:24 AM EST  | Comments
  • Comment
  • Print Print
  • Print
Stock quotes in this article:

aapl

,

ibm

,

pcln

,

pkt

The dip-buyers are providing support, but they lack juice so far and aren't bouncing us very hard. Breadth isn't too bad at around 1900 gainers to 3000 losers, but most major sectors are in the red. Retail and drugs are showing some relative strength, and precious metals are struggling again on a strong dollar.

Big-cap names like Apple (AAPL), IBM (IBM) and Priceline (PCLN) continue to hold up, but there isn't much chasing. The action has the feel of increased caution but everyone is aware of how consistently we have bounced back from poor opens.

The key is to watch the early lows. Selling accelerates when bounces fail and we make new intraday lows. The dip-buyers will start flipping faster and faster, which keeps the upside contained, and keep stops very tight, which causes additional downside pressure to kick in quickly if we don't gain traction.

So far, I'm a net seller. I see little I want to buy at this point. My stock of the week, Procera Networks (PKT), is off to a good start but it's thin and choppy and needs a better market to gain momentum.

I want to see how well we hold these bounces before being more active. My inclination is to play failed bounces with some index shorts, but I'll be averaging in slowly.

_______

More from James "Rev Shark" DePorre:

Columnist Conversations

GS has cleared the important hurdle on the way up which increases the odds for an eventual rally towards the 1...
A good quarterly report has sent shares of Calamos Asset Management (CLMS) sharply higher. CLMS was up about ...
Electronics distributor Ingram Micro (IM) reported better than 16% growth in its Q3 sending the stock up about...
Market posting decent day considering Ebola getting headlines again. Believe investors have learned not to pa...

BEST IDEAS

REAL MONEY'S BEST IDEAS

Columnist Tweets

BROKERAGE PARTNERS

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.


TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.