NASDAQ firmly stuck in trading range

The retracement of much – but not all – of Monday's NASDAQ pop on Tuesday is further evidence that NASDAQ is still stuck in a trading range.

 

The good news is that traders were not able to set a new intraday low for the week yesterday, and that NASDAQ did recover well off its low for the day.

 

NASDAQ futures are up moderately, but on no significant news. Whether there is any true bullish sentiment behind the futures or just another head-fake will be seen shortly. This could well be another "sell into any rally" situation. Or... on a slow, pre-holiday week it could kick off a short-covering rally and push NASDAQ to a new short-term high, but still well within the current trading range.

 

In short, nothing that happens with NASDAQ today will in any way take NASDAQ out of this trading range.

 

That said, I still firmly believe that NASDAQ is simply working its way through the tail end of the mediocre winter and Q1 economic doldrums. Soon enough the market will shift to a focus on Q2 and beyond, where the economy is expected to return to its modest growth path.

 

Also, any thought that the Federal Reserve is going to "act soon" on raising interest rates is sorely misplaced. At most, they may accelerate the removal of quantitative easily, but it will be quite a few months before the Fed – and the economy – will be ready for even a modest raising of interest rates.

 

-- Jack Krupansky