Wednesday, May 13, 2015

NASDAQ resists selling pressure

Trading for NASDAQ was quite impressive on Tuesday, with the market bouncing back nicely from an early-morning sell-off based loosely on a purported global bond sell-off. We may still not quite be ready to lunge upwards out of the wide trading range, but at least there is no sense of urgency to plunge downwards either.

The next few days will be critical as to whether the whole "sell in May and go away" calendar trading pattern will hold sway this year or not. By this time next week we should have an answer. So far, the tentative answer is no, sort of - but with enough volatility to choke a horse. This is not a market for the faint of heart. Maybe the advice I would give people is not to sell but just to go away and enjoy the spring and summer and let your portfolio grow on auto-pilot.

NASDAQ futures are up moderately sharply, indicating a nice rally at the open, but as always we must caution that futures and the opening move are not reliable indicators of the trading trend for the rest of the day.

We could poke above the magical psychological 5000 level again today, but the open question is how many times we will have to do that same move again before it sticks.

In the coming weeks we will begin to get a trickle of news and rumors on how Q2 is shaping up. Companies seem to be doing their darnedest to set the bar really low for Q2, which is bad for the very short term, but probably good news for July and August.

People are continuing to babble about rising interest rates, but the Fed is still projected to be on hold until December, or maybe October if the economy picks up a bit more than people are currently expecting. Even a full year from now, fed funds futures are pointing to a federal funds rate of only 0.75%.

-- Jack Krupansky

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