NASDAQ poised for another test of trading range
(Oops, a phantom send!)
NASDAQ went through another test yesterday and escaped without too much damage. There was no additional flood of selling, and there was a moderate amount of attempted dip buying during the day, suggesting that the sell-off may have run its short-term course. Now, traders are ready to test in the opposite direction, by trying to kick off a short squeeze to force opportunistic bears to buy in order to close out short positions to protect their meager gains from the past couple of days. That short covering could kick off a nice rally – or peter out and quickly reverse and incite much more intensive selling. Either way, for now NASDAQ remains in a trading range, neither bullish nor bearish per se.
NASDAQ futures are up moderately, on no particular change in the economic or business situation, suggested that traders are trying to force a pop at the open to test if bears are losing some of their appetite for risk and exactly how much dip-buying sentiment might be out there.
This kind of range trading will likely persist until the Fed officially ends its QE asset purchase program in October.
-- Jack Krupansky