Stock Market Commentary for Monday, March 14, 2005

[The main column has been updated since Saturday.]

The market decline on Friday was once again due primarily to technical considerations (weak momentum and technical support levels), and not due to "renewed inflation fears", the price of oil, higher interest rates, or any of the other chattering that traders and speculators use to try to artificially incite extra volatility in the market. Nasdaq's moderately sharp 18.12-point decline was not a negative response to any news, but a simply a technical reaction to the fact that there was no significant momentum even with good news from Intel (INTC).

Mutual fund inflows continue at a weak level, so the market will have a modest drift higher, but with these moderate downward spasms along the way. They can certainly be disquieting, but can safely be ignored by true investors.

The economy is in fairly decent shape, despite the chattering.

Nasdaq trading volume was moderate (1.80 billion shares), and breadth was moderately negative, with 1.21 losers for each gainer. Sure, this was a disappointing sell-off, but it wasn't very heavy at all.

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