Stock Market Commentary for Thursday, March 31, 200

Bummer... Nasdaq rising 31.79 points (1.61%) certainly looks great, but trading volume was just barely moderate, suggesting that that this was not a rock-solid rally, and was more likely a classic "dead-cat bounce". I'm sure there was a modest amount of real buying to get the rally going and keep it going, but the bulk of the low-volume gain was most certainly short-covering, plus some momentum buying. I'll take the gain, but I'll want to see some serious follow-through before celebrating too wildly.

Some people say that the rally was based on falling oil prices, but the real reason was that the market was in fact heavily oversold on a short-term technical basis and a sharp short-covering bounce was due at any time. Besides, oil prices recovered late in the day anyway.

It does now appear that the sell-off on Tuesday may have been the "capitulation" of the correction off the March 7 peak.

Nasdaq trading volume was barely moderate (1.76 billion shares), and breadth was strongly positive, with 2.24 gainers for each loser. Despite the nice gain, volume was too light to consider this a strong rally.

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-- Jack Krupansky