Wednesday, June 18, 2014

NASDAQ remains poised for a new peak or consolidation

NASDAQ once again is poised either to breakout with a new near-term peak above the March peak (now over 3 months old) or... some consolidation or even to begin trading back down in its range. NASDAQ is only 21 points or 0.5% below that near-term peak (on a closing basis.) Of course, even if we do touch or exceed that peak, the open question is whether this will be a sustainable breakout rather than the end of a nice rally.
NASDAQ futures are up modestly this morning, suggesting a modestly positive bias for traders, but once again the question is whether speculators and investors build on a modest pop or sell into any rally.
NASDAQ has fully erased the dip from last Thursday, but remains vulnerable to even bigger dips, like 50 or even 100 points, as the recent rally "grows long in tooth" without staging the kind of breakout needed to establish a new short-term peak.
I had some Adobe (ABDE) call options, but... they expired last month, and now the stock is poised for an 8% pop this morning. Sigh. I violated my own rule about only buying options with at least 4 to 6 months duration. But, my Yelp (YELP) and Solar City (SCTY) call options have done quite well, so I can't cry too much.
-- Jack Krupansky


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