Stock Market Commentary for Monday, March 28, 2005

[The main column has been updated slightly since Friday.]

Thursday was another useless trading session, possibly due to the imminent long holiday weekend with the market closed on Friday. The nice pop in the morning and early afternoon was simply a combination of day trading and short-covering. The evaporation of the early gains late in the day was a combination of the day traders closing out their positions and the annoyed shorts who had covered their positions earlier but re-opened them when it became clear that the rally had run out of steam.

The bad news is that Nasdaq closed six points below its opening level, suggesting that some "sell into any rally" sentiment is still dogging us. That's a modest yellow flag. On the other hand, the early rally was due to traders playing around and causing a little short-squeeze, and volume was light, so we can probably ignore the whole day.

The good news is that there was no sign of a continuation of the recent sell-off.

The economic data was reasonably positive, although somewhat mixed.

There's a good chance that the recent sell-off is over, but we can't bet on it, yet.

Nasdaq trading volume was light (1.71 billion shares), and breadth was modestly positive, with 1.16 gainers for each loser. The Nasdaq-100 Tracking Stock (QQQQ) and S&P 500 Tech Sector "Spider" (XLK) were both up slightly as well.

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-- Jack Krupansky