Monday, June 02, 2014

NASDAQ poised for... something

After two positive weeks, NASDAQ is looking a little healthier. But... is it poised for a continued breakout, possibly to a new high for the year, or poised for a reversal to swing back down in a trading range? Or maybe poised for some volatility with little net change by the end of the week? It all depends on whether your average hedge fund decides to bias their trades with "risk on" or "risk off", and if there is disagreement, then we get choppy volatility. Of course, for the long run, the question is mutual fund money flows – are retail investors enticed into the market, or do they hold back or even withdraw from the market out of fear? Lots of variables in the market equation this week.
 
The good news is that the overall U.S. economy is still poking along at a quasi-decent pace, much improved since the cold winter, and poised for more incremental improvement though the rest of the year and beyond.
 
There was a lot of selling of popular technology momentum stocks on Friday, but that may simply have been due to a lack of upwards momentum that day rather than true "time to bail" sentiment. We'll have to see if there is any follow-through on that lack of momentum in the coming days.
 
NASDAQ futures have a slight positive bias, but even with a positive open, the question is whether there are a bunch of hedge funds out there with a renewed "sell into any rally" bias.
 
I continue to have a positive bias, but that's me and shouldn't be confused with the overall market! I also am poised to take advantage of any big dips for solid stocks.
 
-- Jack Krupansky

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