Stock Market Commentary for Monday, May 23, 2005

[Some minor changes in the actual column since Saturday]

Friday was yet another classic "treading water" trading session as market participants continue to "digest" the recent run-up. Traders and speculators did try to push Nasdaq down, and briefly succeeded, but by 10:00 a.m. Nasdaq had popped back up in their faces and began a gradual recovery for the rest of the day that led to a modest gain of 3.84 points.

The latest ECRI Weekly Leading Index suggests that the economy's momentum has once again petered out. The stock market may be rallying in anticipation of a pickup in the Fall, after the Fed has finished raising short-term interest rates.

The market continues to trade primarily on technical considerations rather than true economic or business fundamentals.

Nasdaq trading volume was very light (1.54 billion shares), and breadth was slightly negative, with 1.06 losers for each gainer.

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-- Jack Krupansky