NASDAQ poised to consolidate
As expected, NASDAQ was somewhat weak on Monday after the big gains last week. Some consolidation is certainly in order after such a strong advance. The big question now is if the new high is a precursor to a true breakout or merely a modest overshoot at the top edge of the broader trading range. We could see a little volatility as traders and speculators dance around and struggle with answering that question.
NASDAQ futures are down moderately, indicating a dip at the open, but the question is always whether people will pile on to any dip to produce a significant selloff, or whether people will buy on dips and actually kick off a new leg up. Sentiment seems to prefer the former, but the real question is what bias short-term speculators (hedge funds) will take – either to take profits and bet on a downtrend or whether they have more bullish money yet to be deployed for the upside.
-- Jack Krupansky