Monday, October 27, 2014

NASDAQ poised to continue tug of war between speculative bulls and speculative bears

NASDAQ has had a nice run, so it would be no surprise to see a moderate amount of consolidation here, but the big show is the ongoing tug of war between the more bullish speculators and the more bearish speculators. The additional focus of this week will be positioning ahead of the Fed meeting as well as the post-meeting reaction and positioning. No significant news is expected from the meeting announcement on Wednesday, with it being more of a formality for the end of the QE buying program. In truth, the action before the meeting and after the meeting should all net out and reveal the actual medium-term trend. It may take a full week for the dust to settle.
 
NASDAQ futures are down moderately, indicating a dip at the open, but the question is whether the bias for the day will be to pile on to dips and sell into any recovery rallies, or to buy on dips and extend any gains. Flip a coin – the intraday volatility is likely to be greater than the actual gain or loss for the day.
 
Now that Alibaba (BABA) is finally in the black from the opening day price on the IPO, it will be interesting to see how people treat this interesting stock.
 
-- Jack Krupansky

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