Stock Market Commentary for Monday, April 25, 2005

[Some minor changes in the actual column since Saturday]

Nasdaq's very sharp 30.22-point decline on Friday was a perfect example of the degree to which market volatility is currently driven by strictly technical and momentum considerations rather than true economic or business fundamentals.  The economy and businesses continue to chug along just as they did one or two or three days or weeks ago.  Traders and short-term speculators certain chatter a lot and try to turn even the slightest molehills into insurmountable mountains, but their motivation is to profit from short-term trading rather than to try and truly the understand trends in economic and business fundamentals.

Chalk Friday up to simple profit-taking after the big rally on Thursday.  There were a lot of shorts that were forced to cover their positions on Thursday, so a modest degree of weakness at the open was all the excuse they needed to re-open their short positions.

The overall trend will probably be to drift up, but we're going to have a lot of this crazy up and down volatility for some time to come.

Nasdaq trading volume was moderate (1.85 billion shares), and breadth was strongly negative, with 2.18 losers for each gainer.  This was not a heavy sell-off.

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-- Jack Krupansky