Sunday, April 20, 2014

Mixed bag for NASDAQ this coming week

The factors for NASDAQ this coming week are quite a mixed bag. All bets are off. Expect... volatility.
 
On the negative side:
 
1. Lingering anxiety about Q1 results due to the weather-related slowdown.
2. Last week was quite volatile, with a new short-term NASDAQ low and wild swings between positive and negative territory.
3. Last week was a holiday-shortened week – a lot of key market participants were simply off for an extended holiday. They will tend to renew their downside push in the coming week.
4. Lingering geopolitical risk due to uncertainty about collateral damage and blowback from any enhanced economic sanctions.
5. The economy is still only so-so.
 
On the positive side:
 
1. NASDAQ did advance for the week. Always a positive sign.
2. The underlying economy remains reasonably solid and incrementally recovering, albeit at a sluggish pace.
3. Lackluster and weak Q1 results are already well backed into the cake.
4. Too many bearish short-term speculators leaning too heavily in the same direction will eventually lead to a dramatic short squeeze.
5. Plenty of relative bargains to attract bullish speculators.
 
I'm still betting on a continuation of the bull market advance, but we'll need a lot more than a 2% bounce to assure than the low for this correction is behind us.
 
I expect to open or add to several positions this coming week.
 
-- Jack Krupansky

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