NASDAQ may bounce but still struggling to find a direction

NASDAQ whipsawed dramatically last week as the big dogs and heavy hitters got back to their desks from the extended holiday beak and started to assert themselves and show the traders who's in charge. NASDAQ is now only a little above the midpoint of its recent trading range, so it could trade either way. It has plenty of room to trade towards the upper edge of the range and possibly even a new 1-year peak, or back down to test the firmness of support at the September peak.

NASDAQ futures are up moderately, indicating a decent pop at the open, but whether people pile on for a nice advance or once again start selling into all rallies is a coin flip. It could take an hour or two for the heavy hitters to let traders play around before they assert themselves again. The problem is that we don't have any transparency on how the hedge funds may be thinking about shifting their bias between "risk on" and "risk off", which they do on a moment's notice.

-- Jack Krupansky