• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • TheStreet Smarts
  1. Home
  2. / Investing
  3. / Stocks

The Dip-Buyers Aren't Done Yet

They have been rewarded so often that they will not go gently into that good night.
By JAMES "REV SHARK" DEPORRE
Feb 16, 2012 | 02:11 PM EST

If you took a poll Wednesday, you probably wouldn't have found many folks who expected the market to recover all of its losses immediately. In fact, it was interesting to see how quickly bearish sentiment developed. It was logical to expect some downside follow-through after the intraday reverse, but we typically don't see so many bears after just one day of poor action. Perhaps being deprived for so long caused so many bears to embrace the dark side so fast.

Now that we have roared back as if nothing happened at all, it seems painfully obvious that the dip-buyers weren't finished yet. They are about 23-0 for 2012, and the fact that suddenly everyone on CNBC was a growling grizzly only helped to set the stage for the quick snapback.

It's easy to see this sort of thing in the rearview mirror, but it confirms what I've been writing recently: that the dip-buyers are not going to go gently into that good night. They have been rewarded so consistently and so often that it is automatic behavior.

Eventually they will be caught by surprise and we'll see real ugliness, but when bearishness goes from zero to 60 in the course of one day, the dynamics favor a bounce.

Don't forget that the high-frequency trading algorithms love to torture bears leaning the wrong way. I suspect the most profitable trading program out there is one that keeps buying very extended markets, especially when the bears are very vocal that a correction is due at any moment.

My game plan has been to stay with the quick long trades, and that is working well. I'm not shy about selling down the things that work, but it is challenging to redeploy cash. I'm not inclined to do much chasing here, although there is plenty of squeeze action taking place.

_______

More from James "Rev Shark" DePorre:

  • Keep an Eye on the Dip-Buyers
  • As Goes Apple, So Goes the Market
  • The Action Shifts
Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.
TAGS: Investing | U.S. Equity | Stocks

More from Stocks

As the Market Shifts, So Should Your Strategy

James "Rev Shark" DePorre
Jun 3, 2023 11:50 AM EDT

Let's look a how to adjust trading techniques to fit the changes in the market.

Market's Frothy With a Side of FOMO

James "Rev Shark" DePorre
Jun 2, 2023 4:41 PM EDT

The small caps and the Dow finally host the party on Wall Street. But will this broadening action continue?

This Is Still My 'Preferred' Style of Investing

Jim Collins
Jun 2, 2023 2:00 PM EDT

Let's look at some whopping returns for VLYPO and two others to dive into.

Is This 'Museum' Finally Unlocking Its Doors for Value Investors?

Jonathan Heller
Jun 2, 2023 12:50 PM EDT

A fascinating and frustrating company over the years, is showing positive signs in 2023.

Boosted by Quarterly Beat and AI's Breakout, Broadcom's Booming

Stephen Guilfoyle
Jun 2, 2023 11:56 AM EDT

Performance is excellent, free cash flow is robust, guidance is solid and sales are growing. Here's my one nitpick and how to play the stock.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 01:51 PM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    Adjusting Your Trading Approach to Shifting Market...
  • 06:54 PM EDT CHRIS VERSACE

    AAP Podcast: A Tongue -- and a Market -- Twister: 'Get a Debt Deal Done'

    Listen in as the Action Alerts PLUS Podcast tackle...
  • 12:07 PM EDT STEPHEN GUILFOYLE

    Selling Some of This Surging AI-Related Stock

    This isn't the only name in the Stocks Under $10 p...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2023 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

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

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.

FactSet 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.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login