Stock Market Commentary for Tuesday, March 22, 2005

Traders made a semi-serious attempt to artificially push Nasdaq down on Monday, and they in fact succeeded, briefly, but since they pushed too hard too quickly the market bounced back in their faces, with Nasdaq closing down a mere -0.28 points. We're not out of the woods yet, but the weakness of the sell-off is good news.

Nasdaq closed 14 points above it's intra-day low. That's a positive sign.

The bottom line here is that traders and short-term speculators are trying very hard to artificially depress the market. They can succeed at that game for short periods of time or for short market swings, but eventually net mutual fund money flows will force the market back to its true longer-term trend.

Nasdaq trading volume was light (1.65 billion shares), and breadth was moderately negative, with 1.17 losers for each gainer. The Nasdaq-100 Tracking Stock (QQQQ) was actually up modestly, suggesting that this was basically a sell-off of smaller-cap stocks. The S&P 500 Tech Sector "Spider" (XLK) was flat, further suggesting that the weakness was in smaller-cap stocks.

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-- Jack Krupansky