Stock Market Commentary for Friday, April 22, 2005

We finally had a decent rally on Thursday, with Nasdaq rising a very sharp 48.65 points.  This rally acts as confirmation of a new up-leg for the October 2002 advance that started with the intra-day low on Monday.  That's no guarantee that the advance will continue, but it's a solid starting point.

That said, the rally was probably mostly short covering combined with a modest degree of real buying and a lot of pile-on momentum buying.  I'm still suspicious that that the market continues to trade mostly based on technical considerations rather than true economic and business fundamentals.

The economic data was actually mixed, with a solid Philly Fed manufacturing report and low jobless claims, but a moderately negative reading for the leading indicators.

Mutual fund money flows have been quite erratic of late, adding to market volatility.

Nasdaq trading volume was (barely) heavy (2.02 billion shares), and breadth was strongly positive, with 2.68 gainers for each loser.  This was finally a strong rally.  The point gain was great, but trading volume still isn't quite all it could be.

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-- Jack Krupansky