Wait on NASDAQ — It May Come Back Yet

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You never saw a bunch of traders so grateful for a 66-point rally.

The NASDAQ has been in a serious funk, shedding nearly 400 points, more than 10 percent of its value, until suddenly a sliver of sun peeked out on Wednesday. Some credited Oracle, which lifted the index after some good news for the software maker. Others pointed to the day, the third day of the quarter, in which portfolio managers supposedly come out of their meetings and dump some investment money on the table. But for most, it seemed this cute little rally was like a flower pushing up through the tundra — not a full-blown spring yet, but hopefully a sign of things to come.

Traders like to talk about "levels," as in the 4300 level that the index flirted with in mid-July and late August before sagging each time to its current 3400-range lows. Statistically, an index tends to find parameters for each phase of its behavior, and the sunniest outlook emerging from Wednesday's mini-bounce was the idea that the trading herd won't take the index any lower than that "floor" of 3400. (Of course, some were claiming today that a further shakeout has to hit — 3200, 3000 — before the NASDAQ can rally back for real.)

So what the heck does all this mean for your portfolio? You got heavy into tech stocks 'cause that's where the easy money was — is it time to pull up stakes? Well, the best answer is probably the one you've heard before: Not just yet.

Sure, there's always Treasuries, which have thrived amid the interest-rate tension all summer. And the Dow is holding up rather well in a dour season. But the word on the Street is that NASDAQ will be back, one of these days. Maybe when this earnings season gets rolling in earnest later this month — what we're in now is called "pre-announcement purgatory," when the news is almost all bad — and some happier numbers come in.

Until that magical day, uncertainty is tying traders in knots, and the techs will keep bouncing unpredictable around their current semi-dismal levels. One proprietary trader (essentially, a day trader who works for someone) threw up his hands yesterday and took the rest of the week off to play golf.

For the buy-and-hold investor, that's a good idea.