The market continues its pattern from 2011 of bouncing back from weak opens. We have had early weakness on five of the first seven trading days this year, and closed strong on each of those days. The indices didn't do a lot, but improved nicely through the day.

Most notable was speculative action in low-priced, garbage stocks. Solar energy, homebuilders and China were the most active, with a smattering of biotechs and technology names.

I'm not sure what the catalyst was for this sudden burst of activity in low-priced stocks, but it makes me feel better about the market. Maybe it's a new variation on the January Effect. One thing we have lacked for some time is real excitement about price action. The fact that we had aggressive trading in junk stocks again makes me believe the good old days might not be completely gone.

We have a few more days before earnings next week, and there isn't much news that favors more of this type of trading. I'm concerned that we are going into earnings season with high expectations, which could cause trouble.