Tomorrow…The Rubber Meets the Road 12-28-05

Good Evening.

The market did a little panic shakeout this morning as a follow up to yesterday's rinse. However, fund managers looking to protect performance stepped in and managed to bring the averages back from the brink. Breadth was positive and volume was light at approximately the same levels from yesterday. In the last five minutes of the day an apparent sell program kicked in which dropped the NASDAQ approximately 5 points. We would not read too much into this sell off due to the pervasive light volume.

We have been yammering quite a bit that the Santa Rally would likely materialize late in the week. Well tomorrow if we don't see Santa's fat fanny…we're going to have to eat a little fruit cake. The makings are still in place for a nice Spike higher although new highs for 2005 seem out of the question. In a prior post last week we predicted that the 2254 NASDAQ resistance would be overcome this week. Fortunately, this past Tuesday the market indeed surpassed that level before rolling over.

The new likely scenario for any rally would be for the NASDAQ to reach for this week's highs between 2250 - 2260 (currently 2229). Certainly not new highs on the year but we'll take it should it come to pass.

If You Held a Taser to Our Head:
There is always the potential the Bear trap that has been set gets squandered by the Bulls in the next couple of days. However, individuals that only report performance to themselves should not be discouraged. There is a strong possibility for a delayed rally to ignite the first week of January if nothing happens by this Friday. Either way the market has done a nice job of clearing the decks for a little short-term upside action.

Hope you traded well.

___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
___________________________

Click Here To E-mail Comments