Bears Caught in a Trap

 | Sep 14, 2011 | 1:15 PM EDT  | Comments
  • Comment
  • Print Print
  • Print
Stock quotes in this article:

wwww

The early market dip turned out to be a bear trap. The folks who faded the opening strength were feeling good for about an hour, but the dip buyers made a stand and have pushed us to new highs for the day.

The biggest positive the bulls have going for them is that there is too much skepticism. It is difficult to believe that anyone thinks that the European problems are close to a resolution, and maybe no one really does believe it, but it has created the conditions to squeeze us higher for now.

My impression is that the buyers are short termers rather than true believers, but as I've written so often, it is always dangerous to underestimate the strength of these oversold bounces. The fact that they are so hard to trust is exactly what causes them to continue.

I used the early strength to cut back some long positions, so I'm lightly invested. I have a couple items on my radar that I'll consider near the close, but putting any substantial cash to work remains very tough.

One bottom-fishing candidate I've mentioned in the past is Web.com (WWWW). There was some insider buying recently and it is starting to act better, which makes me more interested in adding it. I prefer to buy stocks when they are going up rather than down, and this one is finally looking a little more positive.

Columnist Conversations

FB is trading $75.88, up 6.4% with IV30™ down 33.4%. This is a follow up to the post yesterday: FB - Ear...
Bloomberg reporting around 2pm ET Zillow for Trulia...Z declined to comment, TRLA won't comment on spec. Few t...
With just over 40% of S&P 500 components having reported 2Q earnings, 158 of them or about 77% have surpri...
DHI is the biggest loser in the S&P 500 today. The homebuilder is off over 10% on its heaviest downsi...

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.