Stock Market Commentary for Tuesday, May 10, 2005

Monday was an extremely slow trading session, marked more by day-trading volatility rather than any real investment flows.  Nasdaq managed a moderate 12.32-point gain, and actually rose 19 points off its intra-day low.  Yes, this was a nice gain, but the mediocre trading volume tells us to be very cautious here.  The bears may simply be waiting in the wings for Nasdaq to move up as high as possible before they step back in and clobber it with shorts.  A failed attempt to run up to the 2,000 level might give them an inviting opportunity.

Nasdaq trading volume was very light (1.48 billion shares), and breadth was moderately positive, with 1.72 gainers for each loser.  It would be a mistake to treat a moderate gain on such light volume as a true rally.

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-- Jack Krupansky