Friday, October 31, 2014

NASDAQ poised for a nice bounce as market seeks its post-Fed feet

Yesterday was a tough day for stocks as they struggled to figure out where they should be now that the Fed is out of the picture "for a considerable time." It will take another two or three days to finish with this-dust settling process.
 
NASDAQ futures are up sharply, nominally due to the Japanese stock buying program, but in truth that is really more of just a cover by traders who are always reaching for excuses to "shake things up." Sure, we'll see a nice pop at the open, but the question is whether lots of people will pile on for yet another short squeeze or start selling into the rally. It's a Friday, not to mention a lot of people distracted by Halloween, so trading could be somewhat atypical with the weekend in front of us, when anything can happen. The real action will be on Monday when all the serious speculators have had time to digest and more deeply ponder the Fed statement and really start to place their serious post-Fed bets.
 
The big question is whether short-term speculators (the hedge funds) are looking to start trading down in the broader trading range, or... stage a breakout to new yearly highs for NASDAQ.
 
I'll be starting to look for opportunities to at least partially exit from some of my recent dip purchases as they hit 5%, 10%, and 15% gains.
 
-- Jack Krupansky

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