Oh, Those Fickle Traders

How fickle are traders? They have the attention span...and the confidence...of gnats.

Earlier in the morning, traders took a shot at buying beaten-up groups: financials, airlines, and builders rallied. These stocks have been dramatically oversold recently.

Not surprisingly, there was also a mild rotation out of agricultural stocks, coal, and energy to pay for the money going into beaten-up groups. It didn't hold; by the end of the day much of the gains in the beaten-up groups had evaporated.

Nobody particularly believed that we were at a bottom in any of these beaten-up names; rather traders have given up all pretense of understanding long-term plays in favor of short-term momentum plays.

For example, in January several traders successfully played building stocks for a couple weeks; some rallied about 30 percent in two weeks before falling back.

In March, a similar situation occurred when money briefly came into financials, and several also rallied 30 percent or more in that time period before falling back.

What will happen at the end of June, beginning of July? Several traders have expressed interest in shorting oil by going long refiners or a few airlines, the theory being that if oil falls, margins will improve for both groups. That is certainly true; it's also true that there have been attempts to short oil before (most recently in May), which have failed.

Several refiners like Tesorodid move up today, but the gains did not really hold.

The difference between now and January and March is that traders could at least play beaten up groups for a few weeks; today they can't even get through an afternoon without having the market reverse on them.

Questions? Comments? tradertalk@cnbc.com