Stock Market Commentary for Monday, April 4, 2005

[The main column has been updated slightly since Friday.]

 

People are always blaming every market decline on oil or interest rates or inflation or some other concocted excuse.  In reality, the Nasdaq's moderately sharp 14.42-point decline on Friday was a combination of disappointment in the mediocre employment report and simply some more profit-taking after Wednesday's ridiculous rally.  Whenever upwards momentum peters out, traders and speculators reverse and try to push the market down as far as they can.

It's worth noting that Nasdaq closed less than a point below the level it had fallen to at 11:00 a.m.  That's not a sign of a heavy sell-off, but more a sign of a knee-jerk reaction by traders and speculators.

The economic data was reasonably good, despite the market chatter.  The economy continues to gradually improve, but at a lackluster pace that tries the patience of the average hyperactive Wall Street "professional".  True investors should stay the course.

Nasdaq trading volume was moderate (1.91 billion shares), and breadth was moderately negative, with 1.79 losers for each gainer.  This was a disappointment, but not a heavy sell-off.

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-- Jack Krupansky