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Still Some Momentum Action

This article originally appeared on Aug. 30, 2013 on RealMoney. To read more content like this + see inside Jim Cramer's multi-million dollar portfolio for FREE Click Here NOW.

The market has been showing some signs of bounce for a couple of days now and there continues to be some pockets of strong momentum, but the bulls have not yet been able to put together another V-shaped bounce.

The V-shaped bounces tend to start slowly and then surprise most everyone when they keep on going, but I suspect that the bulls have become a bit too complacent about this pattern of action. I keep hearing optimistic comments from technicians who would normally be more bearish because they have been burned so often by a market that comes back from the brink of disaster.

Keep in mind that we are in the middle of the weakest time of the year seasonally and that many folks may use that as an excuse to forgo some immediate buying. The news flow has shifted also with the focus now on tapering and the debt ceiling rather than the endless support of Fed created liquidity.

What has been most notable about the market action lately is that despite the poor technical condition of the indices there still is some aggressive momentum action in select stocks like Facebook (FB - Get Report), Tesla (TSLA - Get Report), Green Mountain (GMCR), Chipotle (CMG) and so on.

Typically, in a struggling market the leaders are shot down one by one, but we aren't seeing that so far. In fact, the inverse seems to be true and money is flowing into high-momentum names because they are relatively safe.

Next week the action should pick up as vacations end and people go back to work. Don't look for anything meaningful to occur today.

At the time of publication, the author was long FB and GMCR.

James "Rev Shark" DePorre is the author of Invest Like a Shark: How a Deaf Guy with No Job and Limited Capital made a Fortune Investing in the Stock Market. He is founder and CEO of Shark Asset Management, an investment management firm, and he also operates, an interactive online community that serves and educates active investors. DePorre holds business and law degrees from the University of Michigan, is a member of the Michigan Bar Association and a former tax attorney and CPA. He lives in Anna Maria Island, Fla., with his wife and two children. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Rev Shark appreciates your feedback; click here.

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