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