Thursday, May 29, 2014

NASDAQ paused (poised?) and waiting for money flows

Okay, so NASDAQ did a little consolidation yesterday (Wednesday), probably not enough to satisfy any of the bearish short-term speculators, but did in fact manage to resist early attempts to consolidate more deeply, so that suggests that there are more than a few bullish speculators still not ready to throw in the towel.
 
NASDAQ futures are up very modestly, suggesting a modest positive bias, but with very little conviction. This is fine since the main question is how much money is waiting on the sidelines to make bets, positive or negative, as the trading day progresses. Even if there is a modest bounce at the open, it may get slammed with a bit of the "sell into any rally" mentality that pops up as a trendless market moves towards the upper portion of its trading range.
 
The "sell in May and go away" anxiety is still there, but just barely. Right now, it's more of a ghost, but market participants are so antsy that they could start selling at the slightest "Boo!" from that ghost. Ditto for a lackluster Q1.
 
The good news is that NASDAQ is actually up moderately for the month of May so far, about 2.7%. Seems like a classic example of "a bull market climbs a wall of worry." Still, in such a choppy market NASDAQ is quite susceptible to wild swings, like another 100+ point decline in a single day, not for any good reason, but just because traders and short-term bearish speculators can do it on a whim, with apparent impunity.
 
The stock market is supposed to be a "barometer" of the coming economy, anticipating six to nine months ahead, but on a very short-term basis (weeks) it can be rather frothy and choppy with day trading and very short-term speculating, as opposed to medium-term speculating (months) and real investing (years.)
 
I think the main catalyst a lot of people are waiting for is to start hearing more chatter about how companies are doing in Q2, which is now more than half over.
 
-- Jack Krupansky

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