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


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