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

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