Protecting Our Profits 3/24/06

The NASDAQ is starting to climb the wall of worry as traders that were shaken out earlier in the week start to sweat that the upside move they were originally hoping for may happen while they are underinvested. In fact, your friendly neighborhood Kcap team can sympathize rather well.

The NASDAQ did indeed look somewhat impressive today with nice leadership in the semiconductors and another closing high in the small caps. Volume was ok at 1.89 bl and breadth came in at 2:1 positive. Google held its gains on the long awaited news of being added to the S&P 500, although we can't help feeling disappointed that the Google news should have been delivered at a time when the NASDAQ was closer to breaking out. This may have stemmed the Bears from doing their THANG earlier in the week....such is life....sigh.

Despite the attractiveness of today's action there were some concerns. Key large cap technology names such as AAPL, BRCM, CSCO, FFIV, INTC, NDAQ, and YHOO showed weakness. Without these names the snap back rally in the NASDAQ is destined to fail. Our concern is that the Bears will hit the market just as the Fed raises rates next week and does not provide a dovish enough statement. The Market is very over bought at this juncture and the internal technical conditions are not looking pretty. We believe that another shake out is looming that will take the NASDAQ down to the lower end of the range(2240-2250).

We are long but not aggressively so. We are holding cash for better prices below. Hey that rhymed! Should the NASDAQ prove us wrong and break above 2335 on a closing basis we will have no problem using our cash to buy higher.....Ok, maybe we will have a little problem doing it but we will execute regardless.

If You Held a Taser to Our Head:

There are plenty of profits to protect by the end of the quarter. We have decided to be early!

Have a nice weekend.

___________________________________________________
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