Minor Weakness Doesn't Deter Buyers

 | Jul 22, 2016 | 4:06 PM EDT
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James "Rev Shark" Deporre is off today. This commentary was written by Jim Koford of Shark Investing. 

The bears may have been encouraged by the minor weakness we had on Thursday, but we saw again today how strong markets tend to stay sticky to the upside. The action was a little choppy as trading got under way, but the buyers stepped up about an hour after the open and we spent the rest of the session creeping higher before going out at day highs. 

By the close, breadth was exactly 2:1 to the positive, and new highs outpaced new lows by 338:28. Telecom, leisure and entertainment, transports and regional banks led to the upside, while just about the only laggard was oils. 

Traders, meanwhile, have been eager all week to chase junk stocks, but today they were in an absolute frenzy. New Concept Energy (GBR) , Top Ships (TOPS) and Cara Therapeutics (CARA) are just a few of more than a dozen or so names that, to varying degrees, hit radar screens and attracted some aggressive action. 

Like I said yesterday, it's been a long time since we've seen so many stocks making these kinds of moves on a daily basis. Make no mistake, these are low-float, low-priced junk stocks, but this is the sort of thing active traders live for. You just have to make sure you aren't left holding the bag when things fizzle out, as they invariably will. 

We have a slew of big earnings reports due out next week, including Alphabet (GOOG) , Apple (AAPL) , Facebook (FB) and Amazon (AMZN) , so we'll see if any of those serve to take the wind out of the bulls' sails. However, probably the most bullish thing a market can do is become overbought and stay that way, and we certainly have that right now. (Alphabet, Apple and Facebook are part of TheStreet's Action Alerts PLUS portfolio. Amazon is part of the Growth Seeker portfolio.) 

Rev Shark will be back on Monday. It was a real treat getting to sub for him while he was out. 

Have a great weekend!

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