Wednesday, December 31, 2014

NASDAQ wobbling into the end of the year

NASDAQ is struggling to figure out whether it is simply consolidating and basing for the next leg up or in the process of rolling over and reversing before heading back down in the current trading range. My bet is on some minor consolidation, but all bets are off during a slow-trading holiday week.

NASDAQ futures are up modestly, indicating a small pop at the open, but whether people build on that or sell into it any rallies is a coin flip.

Oil (OIL) is testing whether a run down to $50 might pan out, but this is during a slow trading holiday week, so any trend won't be apparent until we get to the end of next week.

I'm working on my asset allocation and trading plan for 2015 - how to bet on long-term growth but capitalize on market volatility as well.

Rising interest rates in 2015? CME futures now indicate a 24% chance of liftoff in June and a 51% chance in July and a 67% chance in September. IOW, easily more than a full six months of low fed rates.

-- Jack Krupansky

Tuesday, December 30, 2014

NASDAQ still seeking short-term direction as the year winds down

Yesterday could have been a day for NASDAQ to do a little consolidation after its run-up to to a new yearly peak on Friday, but their was just enough lingering enthusiasm or window-dressing buying to manage to close flat for the day. Although my personal, momentum-focused portfolio took a 0.86% hit, so there is clearly some rotation between stock groups and individual issues going on as well, which I also saw within my personal portfolio.

NASDAQ remains only modestly above the upper edge of its trading range, which is not quite a clean and solid breakout, which makes it vulnerable to a reversal. The slow trading of the holiday week make the situation all the more confusing.

Today is really the last full trading day of the week, with Wednesday being a half-day due to New Year's Eve, and although Friday is technically a full day of trading, it's sandwiched between a holiday and the weekend, so plenty of people will bug out early or even skip the entire day for an extended weekend and holiday week. Net-net, what happens during these holiday trading sessions is subject to revision and even reversal once all of the big dogs and heavy hitters return to their desks next week.

Although Friday is technically part of the new year, it could well trade as if it were part of the end of the year due to slow holiday trading. Besides, I wouldn't treat the first couple of trading days of a new year as an indicator. At least wait for the results of the first full week, to see how the heavy hitters follow-through after letting the first one or two trading sessions of that first week slide by as an easy setup for their more serious trading.

NASDAQ futures are down moderately, indicating a moderate dip at the open, but whether that dip leads to a significant sell-off or whether people buy the dip as they did yesterday is a coin flip.

Oil (OIL) remains locked in its tug of war in a trading range around $55 with $50 and $60 equally out of rich, at least for the moment. I came close to buying more on the dip yesterday, but the dip wasn't quite enough to trigger my 5% threshold, and then oil recovered a fair amount of its intra-day dip into the close.

I'll also continue to look for opportunities to raise my cash reserves on rallies. I almost sold a little of my Wendy's (WEN) yesterday.

-- Jack Krupansky

Monday, December 29, 2014

NASDAQ poised to test whether breakout has legs or will consolidate and possibly reverse

It was certainly nice to see NASDAQ score another closing peak and intra-day high for the year on Friday as well as closing above the psychological 4800 level for the first time since the dot-com days, but merely "touching" a new high is a weak indicator of whether that new peak will hold and turn into a new leg up for the market. And all of this is happening during the slow trading of the holiday season, so it is all subject to revision if not outright reversal when all of the big dogs and heavy hitters get back to their desks after the holidays in the first full week of January.

NASDAQ futures are down modestly, suggesting that stocks could take a "little breather" with a modest dip at the open, but whether a significant sell-off materializes after that initial dip or whether we see people buying on the dip is a coin flip. A little consolidation here would be quite understandable, but a continuation of the Santa Claus rally and end of year window dressing are also understandable and equally likely.

I'll continue to be raising my cash reserves on advances, including sell on recent dip purchases on 5% gains.

I'm also making a list of fresh stocks to buy in 2015, preferably on dips, as well as reviewing my overall asset allocation strategy.

Oil (OIL) remains locked in a trading range (since December 16th), hovering around $55 with the $60 camp of speculators and the $50 (and $40!) camp of speculators virtually completely balanced in a classic tug of war. News can shift the balance somewhat, but this is now more of a battle of wills between opposing speculative views than anything about actual fundamentals. Sure, we could see $50 or even $40, but $60 is just as likely.

-- Jack Krupansky

Friday, December 26, 2014

NASDAQ looks to continue the Santa Claus rally, maybe set a new near-term high

Today will see more of the volatility common during a low-volume, slow-trading holiday week. The market is open all day, unlike the day after Thanksgiving, but a lot of people will just not have their hearts in it and are more likely to leave early for the holiday.

NASDAQ only needs to rise about 11 points to set a new closing high for the year, and about 33 points to set a new intra-day peak for the year. Both are clearly in range, but speculators can get a little squeamish when markets are near new highs but hesitant, as we saw on Wednesday. I think there is a solid 50% chance that we will see those new highs sometime over the next four trading sessions.

The two main factors driving the market will be the traditional Santa Claus rally and so-called window dressing to assure that mutual fund portfolios have all the "good" stocks at the end of the year. The year ends with a half-day of trading next Wednesday.

NASDAQ futures are up moderately, indicating a moderate pop at the open, but whether people file on for a nice rally or sell into any rallies is not assured.

Personally, my focus right now is raising my cash reserves, so I'll be selling off small chunks for profitable positions. I'm also focusing on how I will want my portfolio positioned in 2015. Interest rates will be rising at midyear, but will still be rather low even at the end of the year in 2015 and through midyear in 2016, for that matter.

Oil (OIL) remains in a loose trading range around $55. One of these days it will pop, but speculators may test again (and again!) to see if they can push it down to $50.

In 2015 I expect to bet more heavily on Amazon (AMZN), LinkedIn (LNKD), Solar City (SCTY), Tesla (TSLA), Twitter (TWTR), and Workday (WDAY), among others.

-- Jack Krupansky

Wednesday, December 24, 2014

NASDAQ limps into the holidays

NASDAQ had a good surge last week, but now people are honestly wondering what's next. It had a nice pop at the open yesterday,, but immediately headed south and stayed there for the rest of the session. The bad news was that there was no enthusiasm for buying, but the good news was that there was no real selling after that initial decline. Superficially, this looks like traditional consolidation after an advance. There was also a bit of "sector rotation", with the Dow and S&P 500 rising even as NASDAQ fell.

It would be quite fair for NASDAQ to consolidate further after the surge last week, but the slow-trading of a holiday week make it difficult to sense the underlying trend that will continue in the first week of January once the holiday weeks are out of the way.

NASDAQ futures are up modestly, suggesting a modest recovery pop at the open, but whether that rise sticks and continues after the opening pop or reverses and people sell into the rally is a coin flip even in a normal week.

Oil (OIL) remains volatile, in a trading range around $55. It may test the lower edge of that trading range - or not - but all of this is inconsequential during a slow-trading holiday week.

I did sell some of my Twitter (TWTR) that I had bought on the dip for a 5% gain. That's just "side trading" separate from my long-term bet on the company.

I'm considering some biotech stocks for 2015, but haven't made any firm decisions yet. My current proposed list is: Amgen (AMGN), Celgene (CELG), GlaxoSmithKline (GSK), Isis Pharmaceuticals (ISIS), Johnson & Johnson (JNJ), and Pfizer (PFE). I'd appreciate any feedback for additions or removals from that list. Thanks!

-- Jack Krupansky

Tuesday, December 23, 2014

NASDAQ poised to take a shot at a new near-term peak

The Santa Claus rally or V-shaped recovery continues. NASDAQ is now just 10 points below its pre-Thanksgiving near-term peak and less than 20 points below the psychological 4800 level. We could easily hurdle those milestones, especially with the low volume of holiday-week trading. But... will it stick, especially when all the heavy hitters get back from their holiday breaks in he first week of January?

The big question is whether NASDAQ will simply top out in the trading range here and reverse to trade back down in that range, or whether it has enough gas to at least kick off a new leg above the pre-Thanksgiving near-term peak. I lean towards the latter, but whether any of that can stick through the first week of January is another matter.

The U.S. economy is still hanging in there, continuing to incrementally strengthen, albeit at too uneven and sluggish pace to appeal to the ADHD-afflicted short-term speculators of Wall Street. Ultimately it is this strengthening U.S. economy, which will lead most of the rest of the world, which will underpin the advance of the stock market.

NASDAQ futures are up moderately, due to a nice 5% handle on revised Q2 GDP, indicating another pop at the open. It's always possible that trading will reverse from the opening move as the day progresses, but its probably a little less likely on low-volume holiday slow-trading weeks such as the one we are in.

Note that durable goods orders are extremely volatile month to month, so a down report like we just received for November is not so likely to indicate a trend. That's why the wiser economists always remind people that the latest data point in a data series does not indicate a trend.

Trading could also be a bit atypical today since it is the last full trading day before Christmas since Wednesday is a half-day of trading, Friday is a full trading day (unlike the day after Thanksgiving), but it too will be quite atypical due to the holidays and vacations.

Oil (OIL) is hanging in there with a trading range, hovering around $55, with market participants struggling to decide whether $50 or $60 is the next stop. I'm prepared to buy $50 oil, but to me it feels that $60 is a more likely next stop, although the timing is... inscrutable.

-- Jack Krupansky

Monday, December 22, 2014

NASDAQ poised for a pre-holiday bounce

NASDAQ certainly had a nice sharp V-shaped mini correction and recovery last week, but that doesn't tell us anything about the shape of the trend for the future. We are now embarking on the biggest holiday week of the year, in fact two of them back to back. A lot of the biggest and boldest market participants will be mostly AWOL for the next two weeks, enjoying the fruits of their labors. The remaining market participants will compete with in other to jerk the market around in all directions but with low volume, so we will likely see plenty of volatility until we get well into the first full week of January of the new year. IOW, whatever apparent trend that emerges in the coming days won't necessarily become real until after the full roster of market participants has an opportunity to vet and revise it in that first week of January.

There is a slightly higher probability that the market will rise over the next two weeks. Call it a Santa Claus rally or window dressing. It's a seasonal effect and has next to nothing to do with the longer-term trend for the market.

NASDAQ futures are up modestly, indicating a modest pop at the open. Low trading volume will give the opening move a somewhat higher probability of sticking through the close, subject to any news that might upset the apple cart.

Oil (OIL)  is still struggling to find its new short-term trend and is now locked into a wide, loose trading range, with $50 and $60 both equally likely and equally just out of reach. It may sit here jumping around wildly in that range for the rest of the holiday season, subject of course to any news, until the first full week of full-volume trading in January.

I'll be looking to raise more cash reserves as stocks continue to recover from the recent mini correction.

My main focus is on reviewing and revamping my overall asset allocation for the coming year. Whatever 2014 was, 2015 will be its own year with its own trend and its own winners and losers. We can always learn from the past, but presuming that the future will be a carbon copy of the past is always risky business.

-- Jack Krupansky

Friday, December 19, 2014

NASDAQ due for a breather of sorts

The massive two-day rally for NASDAQ was quite impressive, but I wouldn't get your hopes up for a nice, tidy linear extrapolation of that trend. IOW, NASDAQ is due for a breather and a little consolidation before it decides where to go next. That is not to say we couldn't see a modest or even moderate follow-through rally, just that we should be aware of the possibilities.

NASDAQ is now in the upper portion of its loose, wide trading range, not quite a full 1% below it's recent pre-holiday peak slightly below the psychological 4800 level.

It is unknown how much of the two-day rally was simply a traditional short squeeze with forced buying for people who were too short the market vs. hedge funds who deliberately switched their trading bias from "risk off" to "risk on". It was probably a combination of both. We'll see soon enough, but maybe not until after the holidays.

Futures are up moderately, indicating a modest to moderate pop at the open, but it's not so certain whether people will really pile on to extend the rally or whether they will start taking a "risk off" bias and begin selling into rallies. It could be either a very volatile day or maybe a slumber fest as people focus on the weekend and holidays.

Today is a Friday, so some fraction of short-term speculators will tend to close positions ahead of the weekend when anything can happen. Worse, next week is arguably the biggest holiday week of the year. Christmas is on Thursday, but that means Wednesday is kind of a wasted trading day with the markets closing at 1 PM. The markets are open Friday, but... how many people will be focused on anything other than their new toys? And a fair fraction of market participants will just go ahead and take off Monday and Tuesday to have a whole week, and maybe the whole following New Years week as well. So, I wouldn't expect a ton of heavy, serious trading from now until the first full week of January, which would be the week of Monday, January 5, 2015.

Meanwhile, we could well see a little bit of a "Santa Claus Rally", and maybe that's partially what we saw the past two days, as well as traditional "window dressing" buying before the end of the quarter and year, although I do think that the hedge funds with their highly variable and quirky investment strategies and allocation models are a much more dominant factor in the markets these days than the traditional retail mutual funds.

I did sell a little of my Tesla (TSLA) dip purchases on a nice 7% gain, to lock in profits and start raising my reserves for future dip purchases.

Oil is still struggling to find its "groove". It had a two-day rally and then a breather yesterday, but is up solidly this morning. It's still possible that it could re-test its low to try for a $50 handle, but there's a fair chance that short-term speculators have spent their wad and will gradually begin taking profits, pushing prices back up, at least a little. I am still long the Oil ETF (OIL). I'll buy more on any 5% dip, and sell incrementally on 5% gains.

-- Jack Krupansky

Thursday, December 18, 2014

NASDAQ poised to test whether the bounce is real

The outsize bounce of NASDAQ on Wednesday was awesome, but was it real and will it stick, or was it just a traditional short squeeze rally fueled by "forced" short-covering when "stops" were breached and the shorts will return with a vengeance soon enough, or was it due to more hedge funds switching from "risk off" to "risk on"? Today, the market will take a shot at testing the assertion that the short-term downwards trend was really just trading within a wide, loose range or just the start of a more massive selloff or outright correction.

NASDAQ futures are up very sharply, indicating a sharp pop at the open, but as always, it is an open question whether people will pile on with more buying after that pop or retain or switch back to a "risk off" bias and sell into that massive rally at the open.

Short-sellers who had been forced to cover yesterday will be anxiously awaiting a new, higher reentry price to "put their shorts on" again. They will get that opportunity today, for sure, but if the rally turns out to "have legs", then they will be quickly forced to "take their shorts off" yet again. Rinse and repeat.

I'll be looking at the possibility of selling some of my recent dip purchases at 5% gains.

Overall, I remain heavily bullish, with heavy bets on all of the technology companies with bright futures, with cash reserves to take advantage of short-term dips.

I am seriously wondering if Fed Chairperson Janet Yellen may have put the final nail in the coffin of the psychological bear market in oil through her repeated use of the magic word "transitory." Oil (OIL) has a two-day rally going, looking to extend that for a third day, but brief rallies occur all the time within bear markets. Furthermore, it could well be that we are in a longer-term bear market for oil in that we may not head over $100 again. The medium-term market will be where all the interesting action will be - $40 vs. $80.

-- Jack Krupansky

Wednesday, December 17, 2014

NASDAQ poised for another attempt to bounce, but will it finally stick??

Superficially the NASDAQ selloff on Tuesday was quite disheartening, being more than a full percent and breaking down below the technical support at the level of the September peak in the vicinity of the psychological 4600 level. No good news there. But, it did have the feel of yet another "throw in the towel" session. And it did have dramatic intraday volatility with a strong foray into positive territory which suggested a significant divergence of sentiment as to whether the recent mini correction was finally reaching selling exhaustion. Clearly the answer yesterday was quite mixed. Today, we will see if on more careful overnight consideration market participants will maintain a rather "risk off" bias or indeed shift more to a more positive "risk on" bias. The latter shift would reverse the short-term downward trend back to a trading-range trend within the current wide and loose trading range between 4600 and 4800.

Breaking below technical support is usually a very bad thing, technically, but I have seen a number of occasions where a superficial break down is too tentative and appears to be more of a very short-term trading action as opposed to longer-term speculators and true buy-and-hold investors actually dumping long positions. Today we may see if that is the case. IOW, we could see a further breakdown, but if it too is more by short-term technical players, then we could see it quickly reverse in the coming days.

NASDAQ futures are up moderately sharply, indicating a moderately sharp bounce at the open, but whether it sticks remains to be seen. People may pile on and kick off a decent short-covering rally, or... they may sell into the rally and extend the recent selloff.

I'm hoping that today I will find out whether Fidelity is finally going to resolve my recent dispute to my satisfaction. I see some positive signs in my account, but have not yet gotten an official call from them. The local branch manager energetically volunteered to intercede on my behalf yesterday and his efforts may have turned around a very bad situation.

Oil? Damned if I can discern where it's headed next in the near term. I bought more Oil (OIL) when futures got near $55 and will buy more when they get near $50. Yesterday saw a nice bounce, but whether there will be positive follow-through is anybody's guess.

I bought more Twitter (TWTR) and Tesla (TSLA) on their dips.

-- Jack Krupansky

Tuesday, December 16, 2014

NASDAQ to test support for trading range

NASDAQ briefly tested its support at the September peak, but bounced. Today, traders will attempt to test that support more vigorously.
NASDAQ futures are down sharply, indicating a big dip at the open, but whether that dip expands to a deeper selloff or quickly leads to a recovery bounce is not preordained in any way. As always, it all depends on how the hedge funds are shifting their bias, either a more negative "risk off" or a more positive "risk on". Traders can and do express a lot of noisy sentiment, but frequently do not reflect the underlying sentiment shifts among those with deeper pockets.
All of the current market activity or angst and anxiety is mostly exaggeration for the purpose of boosting trading and profiting from short-term market swings. Nothing for any serious long-term investor to worry about, and more of an opportunity to pick up stocks at a cheaper price.
Meanwhile, I'm busy opening new accounts at TradeKing and preparing to move all of my Fidelity business to TradeKing as a result of an unresolved dispute with Fidelity. I've played with a TradeKing account since February. It's not as fancy as Fidelity, but I don't need all of the stuff that Fidelity does anyway (and none of the headaches!) and would prefer cheaper trades and a simpler business model.
-- Jack Krupansky

Monday, December 15, 2014

NASDAQ poised for a bounce, but will it stick?

First, see my previous post from Saturday for additional commentary.
NASDAQ futures are up sharply this morning, indicating a decent pop at the open, but the question is whether this bounce will stick and kick off further advances during the day or whether it will be yet another "dead-cat bounce" where hedge funds sell heavily into the rally and we see the gains from the open evaporate as the day goes by. It's 100% a question of whether any significant fraction of the hedge funds switch to a "risk on" bias or whether the majority continue to pursue a "risk off" negative bias. We can't know in advance what they will do, so we will have to see as the day progresses. We could also see a large gain due to the opening pop kicking off a short squeeze where hedge funds are forced to buy to cover short positions. Unfortunately, if that does happen, these guys will simply wait a day or so and then re-open their short positions  at a more attractive entry price, and then we could see any gain from today evaporate.
For now, NASDAQ is in a wide trading range. We are at the edge of a mini correction, but a decent rally today would send NASDAQ back towards the other, upper edge of the trading range.
Last night I was expecting to buy more Oil (OIL) and Tesla (TSLA) at the open, but I probably won't if the opening pop is more than minor.
-- Jack Krupansky

Saturday, December 13, 2014

NASDAQ on verge of a mini correction within loose trading range

NASDAQ on the edge of what I call a "mini" correction (a decline in the 3-5% range), closing at a 2.88% decline from its recent closing peak and 3.27% below its recent intraday peak. We do have to be careful about interpreting market action on a Friday, since short-term speculators have a tendency to close out positions ahead of a weekend when anything can happen. We'll have to see whether the selloff on Friday "has any legs" on Monday and Tuesday.
Friday's trading was actually quite interesting, with a deep dip at the open followed quickly by sharp recovery bounce that erased almost all of that dip, followed by volatile trading with only modest to moderate losses most of the day, and deep losses only in the last half-hour of trading. That's too much volatility to indicate a reliable trend. And too much lingering bullish sentiment to indicate an outright bearish bias.
The 4600 level will be a key psychological test. The September highs were just below that level. Whether traders try and succeed at pushing below that level remains to be seen.
It's probably just as likely that NASDAQ will bounce and reverse to trade upwards within the 4600 to 4800 trading range.
We have a week and a half of trading left before the holidays kick in. It's not so clear whether hedge funds will want to be heavily short heading into the holidays.
I continue to follow oil a bit, but there is way too much noise in the marketplace to discern any clear signal. I mean, sure, we could easily see $55 oil this week, but I wouldn't bet too strongly either way. I strongly suspect that most of the negative news is now priced and even greatly overpriced into the market. I'll consider buying a little more Oil (OIL) since it is close to a 5% decline from my last purchase.
I didn't get any IPO allocations on Friday, but I did open small positions of HortonWorks (HDP), New Relic (NEWR), and Workiva (WK) as soon as they started trading. I had opened positions in Lending Club (LC) and Momo (MOMO) on their IPOs on Thursday. I think I'm done with IPOs for now. These are long-term positions. I may also open additional positions to trade on dips.
-- Jack Krupansky

Friday, December 12, 2014

NASDAQ remains mired in volatile trading range

Correction? Hard to tell! Seriously, NASDAQ has such intense volatility with wild swings that no significant trend is emerging so far, other than a moderate trading range. Sure, there is clearly a lot of negative or "risk off" sentiment among the hedge funds, but just as clearly it is not quite enough to push NASDAQ into a serious correction, at least so far. At best (worst), we are seeing a decent amount of "consolidation". So, expect continued volatility until the balance between the "risk off" hedge funds and the "risk on" hedge funds becomes a bit more imbalanced, with one clearly more dominant. Don't hold your breath though – as the old adage (Keynes?) goes, "the market can remain irrational longer than you can remain solvent."
Anxiety and uncertainty over the price and trend of Oil is certainly adding to the volatility, but is just as certainly not the only factor. The main problem we have is that although the U.S. economy continues to recover and continues to outpace most of the rest of the world, it is still uneven enough that ADD-afflicted Wall Street traders and short-term speculators simply can't deal with it and start bouncing off the walls (maybe that's why they call it "Wall" Street?!!).
NASDAQ futures are down moderately, indicating a moderate dip at the open, but we have no clear indication whether after the dip we will see primarily piling on for a steeper selloff or a fair amount of buying on the dip. But volatility is certainly in the cards.
I did manage to get some IPO shares of Lending Club (LC) through their Directed Share Program (DSP) with Fidelity since I have been participating in Lending Club by investing in loans for over five years now. I also bought more shares on the open market. I picked up shares of Momo (MOMO) on the open market after its IPO started trading as well.
I did not get any allocations for the IPOs of HortonWorks (HDP), New Relic (NEWR), or Workiva (WK), but I will open small positions when they open for trading this morning.
I did buy more Oil (OIL) yesterday and will buy more if it dips another 5%. Exactly where the "bottom" is I can't know, but I do know good value when I see it.
-- Jack Krupansky

Thursday, December 11, 2014

NASDAQ continues to struggle to find a trend

The intraday decline of NASDAQ on Wednesday mirrored the intraday rise of Tuesday, which essentially means that market participants are completely confused as to the true short-term trend. Stay tuned. We're probably just going though a little "consolidation", or maybe a "mini" correction (3-5%.)
NASDAQ futures are up modestly, indicating a modest "recovery bounce" at the open, but whether hedge funds follow through with any significant buying or sell into the rally remains to be seen. Any bounce might kick off a short-squeeze rally, but any bounce could just as well be a classic "dead-cat bounce" which could be followed by renewed selling tomorrow.
Still waiting for word on my IPO allocations, but either way I will be long Lending Club (LC) and Momo (MOMO) by the end of the day. Probably just small positions since IPOs frequently have dips before they stabilize. Tomorrow I'll pick up some HortonWorks (HDP), New Relic (NEWR), and Workiva (WK) on their IPOs.
I may pick up some more Oil (OIL) on its recent dip.
-- Jack Krupansky

Wednesday, December 10, 2014

NASDAQ still confused about short-term trend

NASDAQ had a nice bounce on Tuesday, recovering more than half of the losses from Monday and bouncing sharply from a steep sell-off at the open, an intra-day swing of 82 points. Rather impressive. But... the moderate rise for the day may simply have been an overreaction to the overreaction of of the negative sentiment at the open. All of this points to a market that is still mightily confused about its short-term trend. It also has a name: volatility. And it all amounts to a traditional trading range. NASDAQ stayed above its closing level of November 12th, and is now sitting a fair bit above the middle of its range since then.
A correction? Well, sure, a correction is always possible, but the current activity is more of a "consolidation" in a trading range combined with short-term anxiety of traders caused by a perceived slowdown in China and uncertainty over where the price of oil is headed next. Traders can indeed give us lots of volatility, but ultimately they can't take us out of a trading range – it's up to the hedge funds and other short and medium-term speculators to do that.
NASDAQ futures are down modestly, indicating a modest dip at the open and that traders probably feel that the pop at the end of Tuesday may have been more due to short covering than enthusiasm for opening long positions. But where the rest of the market participants will take NASDAQ after that opening dip is unknown – and frequently not correlated well at all with pre-open futures.
Tonight is IPO pricing for Lending Club (LC) and Momo (MOMO). Whether I am allocated shares of the IPO though Fidelity or not, I will be owning those stocks shortly after they open for trading tomorrow morning.
And tomorrow evening will be pricing for HortonWorks (HDP), Workiva (WK), and New Relic (NEWR). I have indications for the first two, but Fidelity isn't participating in the IPO of the latter. Again, either way, I'll be an owner on Friday morning.
My IPO positions will be fairly modest and long-term holds, but I also have the expectation that I will be increasing those positions on any significant dips over the next year or so.
-- Jack Krupansky

Tuesday, December 09, 2014

NASDAQ contemplating a correction of some sort

Sentiment has suddenly turned very ugly for NASDAQ and the rest of the stock market. I'm not so sure that it is all about China and oil and other weaknesses outside of the U.S. so much as it is that traders and short-term speculators will frequently use any and every available excuse to justify whatever trend they want to pursue, as well as the penchant of traders and short-term speculators to exaggerate short-term news far beyond its true long-term significance. The market had been looking a bit "toppy", so some sort of correction was semi-reasonable. Whether it will turn out to be a 2-5% "mini" correction or a full 10% correction remains to be seen. And whether an actual correction really materializes is not a slam dunk even in the face of the fiercely negative (short-term) sentiment.
In truth, NASDAQ is still above it's level of just before the holiday week, so technically we are simply in a trading range, with the holiday week being an aberration. So, the "correction" may simply be an attempt to fully erase that aberration.
Confusion over the trend for the price of oil certainly adds to stock market anxiety even though it is probably a net-net neutral since consumers are such a major factor in the economy. I did buy some more Oil (OIL) yesterday. I'll buy more if it falls another 5%, but for now it is is a loose trading range.
NASDAQ futures are down sharply, indicating a big dip at the open, but exactly what bias the hedge funds are and will be taking remains to be seen. They could sell in a very big way, or... they may have already sold and may be looking to buy on the dip.
Oil futures are actually up modestly, but we'll have to see whether trading follows or reverses that trend as the day progresses. I gather that there is a rather fierce divergence of opinion as to whether oil is undervalued or overvalued.
-- Jack Krupansky

Monday, December 08, 2014

NASDAQ poised for a test of its trend

NASDAQ did manage to recover a fair amount of it's big sell-off from last Monday as the week progressed, but now its time to see how durable those gains are. Futures are down moderately as traders bet that a fair chunk of those recovery gains will quickly evaporate, but we will have to see if that turns out to be the case. Bets by traders frequently fail to align with changes in the risk posture of the hedge funds. It is not unusual for hedge funds to wait for traders and other short-term speculators to bet too much on a particular market trend and then bet the opposite and force a reversal of the short-term trend. We still don't have a solid short-term trend in place after the holiday week.
Futures may be down based on perceived weakness in China or anxiety about weakness in the price of oil. I would simply note that the U.S. stock market is primarily based on the health of the U.S. economy, which is still cruising along and incrementally improving with every passing month, albeit at too slow and uneven a pace for ADD-afflicted Wall Street traders and short-term speculators to get excited about. Oil prices are a mixed bag, with lower prices helping consumers, but reducing investment as well, so the net-net is probably a wash.
I still have a modest position in Oil (OIL). I'll pick up some more if it declines by 5% from my purchase price. It's near-term trend is not terribly clear other than a lot of ugly, negative, cynical sentiment, which is clearly a negative, but sentiment doesn't always translate cleanly into actual market activity.
I'm still getting ready for the IPOs coming later this week. Whether I will be likely to get any shares in the actual IPOs is not so terribly certain, so I expect to be buying shares in the open market. I'll also hold back a fair amount of my cash in anticipation of buying on any inevitable dips that occur in the weeks and months following the IPOs.
-- Jack Krupansky

Friday, December 05, 2014

NASDAQ poised to take a shot at establishing its short-term trend

NASDAQ has certainly been volatile this week, really struggling to "find its groove", whether that be up, down, or sideways. A Friday is not a great day to set a trend, but given the nature of last week with the holiday and the selloff on Monday, it may be the best shot this week for NASDAQ  to set its new short-term trend for the month.
A decent jobs number this morning should help to underpin the market.
NASDAQ futures have been volatile, with traders not quite sure whether a good jobs number is a positive or negative (keeps Fed on track to raise rates sooner), so we could see a rather lackluster open. And, of course, the market will then take on a mind of its own and go where traders have no clue.
Today is a Friday, when a good fraction of short-term market participants may tend to close out positions ahead of the weekend when anything can happen, and since NASDAQ has been shaky lately I suspect a lot of people have been trying to play the "short" side of the market, so for them to close positions means they will have to buy, which would be a positive for the market.
I'm still working on my plan for the three IPOs I'm interested in next week. That, and always watchful for the irrational dips that Wall Street continues to offer me.
-- Jack Krupansky

Thursday, December 04, 2014

NASDAQ still struggling to find its new trend

NASDAQ has had enough time now to digest the Black Friday retail sales, the price of oil, and adjust for meaningless trading that occurred during the holiday week when most of the big dogs and heavy hitters were off partying, but no clear post-holiday trend has been established. Today will be the first clear day for the market to "find its groove." Unfortunately, tomorrow is a Friday, when a good fraction of market participants lighten up on positions ahead of the weekend when anything can happen, so it may be Wednesday before we see any significant progress on establishing a trend for December.
NASDAQ futures are up modestly, indicating a modest pop at the open, as traders are hopeful for an emerging "Santa Claus rally." Then, we'll see if traders have guessed the new trend correctly as the day proceeds. Their record of accurately predicting the trend is rather spotty to say the least.
I'll continue to look for any big dips of my favored stacks. I bought more Tesla (TSLA) and Amazon (AMZN) on dips yesterday.
Mostly I'm just getting ready for IPOs coming up next week.
-- Jack Krupansky

Wednesday, December 03, 2014

NASDAQ continues to stumble through post-holiday indigestion

I'd give NASDAQ another day or two, if not the whole week, to finish digesting the post-holiday economic data and to get over it's holiday "financial coma." Sure, a disappointing Black Friday is now ancient history, but online retail sales have yet to be fully digested. The price of oil seems to be stabilizing, but that remains to be seen as well. Overall, the U.S. economy remains in semi-decent shape and continues its lackluster incremental improvement, which is good for the long term, but leaves an ADD-afflicted Wall Street anxiously grasping for straws with every news report.
Monday's selloff erased the gains of the holiday week, and Tuesday's recovery bounce earned back half of that, but could have been a dead-cat bounce, so we need a couple more days  for the market to sort it out. NASDAQ futures are fluctuating very close to the flat line, indicating a relatively flat open and that traders have no clue as to where the market is headed next. We'll see soon enough.
The Lending Club (LC) IPO is coming next week, currently expecting pricing next Wednesday evening (December 10, 2014) in the $10 to $12 range. I registered my "indication of interest" with Fidelity last night through the DSP (Directed Share Program) that they have arranged with Fidelity for those of us who have been participating in their loans. I've been funding Lending Club loans for five and a half years now, and my effective rate of return is 9.50%. It will be interesting to see if the stock can deliver a comparable rate of return over the years! The DSP is limited to 350 shares, so I have already registered a separate indication of interest with Fidelity outside of the DSP. And, there is certainly no guarantee that I will be allocated all or even any shares at all, so I am ready to buy in the open market as well.
I continue to buy more Twitter (TWTR) as the hedge funds seem quite determined to push it down despite its continued dominance in its market niche and long-term potential.
My foray into Oil (OIL) is still positive, with the appearance that the price of oil may be stabilizing after it's sharp plunge during the holiday week. I'm sure it will be volatile and I plan on buying more if it dips another 5%. Ditto for Tesla (TSLA) and Solar City (SCTY).
-- Jack Krupansky

Tuesday, December 02, 2014

NASDAQ struggles to find a new balance

Most of Monday's sharp decline for NASDAQ occurred within the first 22 minutes of trading, with the market meandering on the plus and minus side of that level until the last half hour of trading. There was nothing really definitive there, other than a one-shot adjustment after the fake rally of the holiday week. Monday's decline erased all of the holiday week gains. So, now we are back to square one, waiting for any near-term trend to emerge now that all market participants are all back at their desks.
People will be digesting the online retail sales results of Cyber Monday, and trying to square good news on that front with the lackluster traditional retail sales results from last week, and trying to figure out what that implies for the rest of the holiday retail sales season.
NASDAQ futures are up moderately, indicating a decent recovery bounce after Monday's rout, but that could simply be a dead-cat bounce that could quickly run out of steam – or not. It will still take another couple of days for the market to rediscover its short-term trend.
I registered "indication of interest" for three IPO's with Fidelity, Lending Club (LC), HortonWorks (HDP), and Momo (MOMO).
I may make some additional dip purchases today.
-- Jack Krupansky

Monday, December 01, 2014

NASDAQ poised for a little consolidation after the holiday week

The big dogs and heavy hitters will be back at their desks this week after a break for an extended holiday week. NASDAQ had a nice rise last week, but it didn't mean a lot without the main market participants in play. So, over the next couple of days we will get to see what these holiday revelers actually think about what happened while they were partying. As the old saying goes, when the tiger is away the monkeys rule the jungle. Preliminary digestion of the preliminary holiday retail sales data will be a key factor as well. It is unclear whether the big drop in the price of oil will be a significant factor, but it will be a factor.
Retail sales numbers will be tricky because sales continue to shift to online purchases, with today being Cyber Monday, and even in-store sales have been shifting in both directions, earlier and after Black Friday itself, so that in-store numbers from Friday and the weekend don't tell the whole story. The preliminary chatter about online sales was as positive as the in-store sales were negative, so... go figure.
I sold a fair amount of stock on Friday to lock in profits and raise my cash reserves so that I can capitalize on any big dips in individual stocks.
I'm still toying with whether and when to take a flyer on oil via an ETF such as (OIL) or (USO), possibly with call and put options. Or I may pick up some more Solar City (SCTY) and Tesla (TSLA), which seem to be hit a bit on the presumption that cheaper oil makes alternative energy less attractive, but I think we're past that stage, although traders will still play that angle.
The bottom line is that the significant advance of NASDAQ in recent weeks leaves it poised for at least a little consolidation, even as the U.S. economy continues to improve incrementally, which is the ultimate metric by which to judge the stock market.
-- Jack Krupansky