Thursday, November 20, 2014

NASDAQ traders poised to test durability of the advance

NASDAQ has had a nice run recently, so it is only natural that traders will eventually "test" the durability of that advance. Today may finally be that day – or not. Futures are down moderately sharply, indicating a moderate dip at the open, but whether people really do pile on after that dip and kick off a significant selloff or whether they buy the dip remains to be seen. A moderate degree of "consolidation" is completely reasonably at this stage, but that doesn't mean that it will in fact happen or even that it will in fact be "moderate" if it does happen.
 
Despite chatter about the rest of the world or even the price of oil or other commodities, the U.S. economy continues to incrementally recover and run at a pace not driven by the rest of the world, albeit in a semi-chaotic manner, which confuses traders and short-term speculators, but is good new for longer-term speculators and true investors.
 
I'll continue to simultaneously look for opportunities to cash out small portions of outsize gains to raise rainy-day cash reserves as well as add to positions on outsize dips. Twitter (TWTR) is still one of my prime targets for dip buying. I cashed out of some Staples (SPLS) on its big gain yesterday. I may sell some extra Cypress Semiconductor (CY) that I bought on its dip and that has recovered nicely.
 
-- Jack Krupansky

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