Friday, September 26, 2014

NASDAQ simply lurching within a trading range

Yeah, those bears really retaliated with vigor on Thursday after they got burned in the short squeeze on Wednesday. Nothing really new here while we're wandering in a trading range. Sure traders can react strongly to the smallest tidbits of news, or maybe I should say overreact. The U.S. economy is still on track to continue its recovery in the months ahead – ignoring fluctuations in volatile reports such as durable orders and unemployment insurance claims – and the Fed is still on track to act reasonably in a manner that remains supportive of improvement in the economy, so... what's to worry about? Sure, anxiety is a worry, but anxiety is the norm in an ever-changing world. In fact, the only time we should really worry is when nobody has any anxiety (true complacency), but we're clearly not there.
 
NASDAQ futures are up, suggesting a recovery bounce at the open, but whether that is a dead-cat bounce that people sell into to continue the sell-off or whether they pile on for a renewed short squeeze remains to be seen.
 
I bought a little NASDAQ-100 Powershares (QQQ) to play the dip. I also picked up a little Expedia (EXPE).
 
Some people have suggested that the resistance for QQQ at the $100 level is driving the market. Could be. Certainly contributes to NASDAQ volatility to at least some degree.
 
In any case, we will likely see plenty more volatility and trading range behavior until we get past the anxiety of the Fed finishing up QE in October.
 
-- Jack Krupansky

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