Stock Market Commentary for Friday, April 8, 2005

Nasdaq's almost-sharp 19.65-point gain on Thursday was almost impressive, but trading was way too light for the gain to be considered meaningful. I would chalk it up to a combination of short covering (by people who had been betting heavy that Nasdaq was about to roll over and take a steep dive), more technical trading, and maybe a little real buying that gave the market a little positive impetus. Sure, people claim that a pullback in the price of oil was "the reason" for the rally, but the economics of oil certainly did not change enough to make a big difference to the economic fundamentals of stocks.

Domestic mutual funds reported modest inflows for the tenth consecutive week. These flows are enough to keep Nasdaq from falling like a rock, but clearly not enough to overwhelm deep-pocket hedge funds who keep trying to artificially induce a market decline though short-selling.

Nasdaq trading volume was light (1.73 billion shares), and breadth was moderately positive, with 1.59 gainers for each loser. The market remains effectively in limbo.

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-- Jack Krupansky