Speculation Buoys Bulk Shipping Stocks

 | Nov 16, 2016 | 4:35 PM EST
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The action cooled off today, but selective stock picking worked well. It was primarily technology names like NVIDIA (NVDA) , Twilio (TWLO) , Oclaro (OCLR) , Advanced Micro Devices (AMD) that helped the Nasdaq to led. Financials weakened and that put some pressure on the S&P 500.

What was most notable about the action today was the speculative action in "junk" names. Bulk shippers were simply insane. There isn't any major fundamental news to justify the moves of over 50% in many cases. Even a halt in DryShips (DRYS) didn't slow down the action.

As is the tendency when there is this sort of crazy momentum, traders started looking hard for other opportunities. A number of small-cap China names started popping up as the day proceeded, and I expect they will find more interest tomorrow. China Natural Resources (CHNR) and China Customer Relations Centers (CCRC) are good examples.

Overall technical conditions remain quite strong, but the rotations are reversing and it is important to be much more selective with your trades. With the iShares Russell 2000 Index ETF (IWM) in positive ground for nine straight days there simply aren't as many easy entry points.

We will keep digging and watch for shifts in the underlying trends.

Have a good evening. I'll see you tomorrow.

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