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

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