NASDAQ poised to test support

The early rally for NASDAQ completely evaporated yesterday as too many people (including me!) sold into the early rally, indicating that there is still a strong "risk off" bias. My suspicion is that speculators are still intent on testing the lower edge of the trading range, down at the 4600 level and down to the early-December trough of 4547. We are already down to within less than 2% of that vicinity, so it's not out of the question. Whether or when the real test occurs is unknown, maybe today or tomorrow, or maybe next week. It's also possible to test it more than once, possibly with one or more dead-cat recovery bounces mixed in there as well. All of this is technical trading based on charts and trading volume, with nothing to do with actual economic or business fundamentals, although traders and speculators love to use any actual news as a cover for their otherwise purely technical moves.

NASDAQ futures are moderately negative, indicating a moderate dip at the open, but whether people pile on for a significant sell-off or buy the dip is a coin flip.

Early yesterday I sold some trading positions that I had bought on recent dips and then opened some new trading positions on the renewed dip in the afternoon. I expect to open additional dip positions today as well.

Oil (OIL) is hanging in there, still seeking a bottom. Plenty of people desperately want to try to run it down to $40, but isn't been a struggle for them so far. Again, most of the current trading is distinctly speculative rather than based purely on economic fundamentals.

-- Jack Krupansky