Stock Market Commentary for Monday, March 7, 2005

[The main column has been updated since Saturday.]

The market responded reasonably well to a reasonable employment report on Friday. Nasdaq scored only a moderate 12.21-point gain, but the employment report wasn't that exciting anyway.

Nasdaq actually closed a half-point below it's opening level, and almost 8 points off it's intra-day peak, suggesting that there is still quite a bit of "sell into any rally" sentiment out there. That's a moderate yellow flag. In fact, Nasdaq may have gained for the day solely due to short-term speculators closing short positions ahead of the weekend, or possibly because they had misguidedly bet on a weaker employment report.

Nasdaq trading volume was moderate (1.84 billion shares), and breadth was moderately positive, with 1.36 gainers for each loser. This was a rather weak rally, not something that we should draw much comfort from.

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