Thursday, August 14, 2014

NASDAQ ponders its next move within trading range

NASDAQ had a nice gain on Wednesday, but it may have been in large part a short squeeze, so retaining all of those gains may be difficult. Speculators are likely split between those betting on a bullish move and those betting on a corrective move. How those two camps net out remains to be seen. It all depends on who has more available cash that they are ready and willing to bet on their bias right now. So the trading range continues, with NASDAQ stuck between the March and July peaks. A lot of that is due to the summer doldrums with their characteristically slow trading, but this kind of tentative, uncertain advance is not atypical in even the best of markets.
NASDAQ futures are up a little, suggesting a modest pop at the open, but the question remains whether people will pile on to the pop or sell into any rallying as the day progresses.
A little consolidation would be par for the course at this stage, but I also wouldn't be surprised if we see another round of short covering due to too many speculators taking a too skeptical position on the health of the market.
I sold extra positions on Amazon (AMZN) and Yelp (YELP) that I had taken recently on irrational dips since they achieved my goal of a 5% gain from the dip. I retain long-term buy and hold positions on these stocks though. The cash proceeds are now ready for the next round of irrational dips that Wall Street likes to hand me on a silver platter. Thank you, Wall Street! Really.
-- Jack Krupansky


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