Stock Market Commentary for Thursday, March 24, 2005

The volatility and very meager Nasdaq gain of only 0.88 points on Wednesday illustrate the unpredictability that occurs when the market is struggling to decide whether a sell-off is simply pausing or about to turn into a recovery. Much of the weakness stemmed from the fact that the market takes a couple of days to recover from any Fed FOMC announcement.

Nasdaq actually closed 5 points above its opening level, which is a positive sign.

Nasdaq trading volume was barely moderate (1.80 billion shares), and breadth was almost strongly negative, with 1.96 losers for each gainer. The Nasdaq-100 Tracking Stock (QQQQ) and S&P 500 Tech Sector "Spider" (XLK) were both up moderately, suggesting that the Nasdaq decline was primarily due to selling of smaller-cap stocks. The significantly negative market breadth confirms that focus on selling of smaller-cap stocks.

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-- Jack Krupansky