Nasdaq’s Balancing Act:

The Nasdaq put up a very fine showing the first 3 days of this week rising almost 5%. After Thursday it is now trading back into the middle of the range between the very round 15000 and 16000 figures. Over the weekend longs were very nervous, but with sentiment washed out the move now makes sense from a Monday morning quarterback stance. Of course, PRICE does not care what any market participants think and from a simple volatility standpoint, the weakness today could have been predicted as the VIX not only filled in a gap from the 11/24 session but found a floor, at least for now, at the very round 20 number (the 20 figure had been resistance since falling below the number on 10/7). I am still in the camp that a year-end rally is in the cards, but perhaps the Nasdaq has to fill in the gap (not common for indexes to gap) from the 12/6 session, down 2% from here, before it resumes its uptrend.

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