Friday, July 25, 2014

NASDAQ poised to trade back down in its trading range

NASDAQ came within a point of touching its recent short-term peak, but close is not good enough, so enthusiasm for a breakout evaporated. Today, disappointment with Amazon is the excuse du jour to reverse and trade back down in the recent trading range. Futures indicate a moderately sharp pullback for the market at the open, but... it remains to be seen if people really do pile on on the short side, or whether they buy on the dip, and then to see if they in turn sell into any recovery rallies during the day. NASDAQ actually could rally to a breakout today as the day wears on, but then again it is a Friday, so short-term speculators will tend to close out positions ahead of the weekend when anything can happen.
 
I'm happy with Amazon, and glad to see them doing very heavy investment to remain a true industry leader. Sure, I do wish they "communicated" better with Wall Street analysts, but that's a rather hopeless task anyway. I'm actually thrilled when companies thumb their noses at Wall Street – it may cause short-term pain, but Wall Street always gets over the pain, and long-term money managers, as opposed to traders and short-term speculators, always manage to sniff out great businesses.
 
I'll be buying the dips for Amazon (AMZN), Pandora (P), and Starbux (SBUX).
 
I took some profits on Facebook (FB) and Under Amour (UA), and picked up some Qualcomm (QCOM) and TripAdvisor (TRIP) on their dips. And some cheap McDonalds (MCD) call options as well.
 
-- Jack Krupansky

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