Stock Market Commentary for Thursday, June 30, 2005

People were basically holding their breath on Wednesday, waiting for the Fed FOMC to speak on Thursday afternoon.  Q1 GDP was revised upwards, but it's such old history that nobody got very excited about it.  Actually, NASDAQ did open up modestly (4 points), but it lacked conviction, so traders and short-term speculators sold into that small rally, causing NASDAQ to close down a very modest 1.0 points.

NASDAQ trading volume was light (1.67 billion shares), and breadth was modestly positive, with 1.07 gainers for each loser.  This is a classic "treading water" market.

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-- Jack Krupansky

Stock Market Commentary for Wednesday, June 29, 2005

A pullback in the price of crude oil coupled with a rise in consumer confidence was the nominal cause of the sharp rally on Tuesday, with NASDAQ gaining a sharp 24.69 points, but it's not uncommon to see strong dead-cat recovery bounces within a day or two of a new short-term low, so we have to be very cautious about this bounce.  We need to wait until the Fed FOMC is out of the way on Thursday, then we have the July 4th weekend (plus a day on either end), and then give the market a couple of days to settle, and then we can see where we are.

NASDAQ trading volume was light (1.64 billion shares), and breadth was strongly positive, with 2.63 gainers for each loser.  This would have been a strong rally, but trading volume was far too weak.  This is typical of the volatility when trading volume is light, and it's also characteristic of a dead-cat recovery bounce.

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-- Jack Krupansky

Stock Market Commentary for Tuesday, June 28, 2005

The market returned to its "limbo" mode as people hesitate after the recent decline and in advance of the Fed FOMC announcement on Thursday.

Front-month crude oil futures did finally poke above $60, but didn't cause any dramatic sell-off, suggesting that high oil prices are definitely old news.

NASDAQ trading volume was very light (1.52 billion shares), and breadth was moderately negative, with 1.42 losers for each gainer.  The market is clearly "treading water."

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-- Jack Krupansky

Stock Market Commentary for Monday, June 27, 2005

[Some minor changes in the actual column since Saturday]

People blamed $60 oil for the sell-off, with NASDAQ falling a barely-sharp 21.37 points, but it was probably more of a technical correction rather than based on true economic and business fundamentals.  I wouldn't count the Spring advance out yet.  Speculators simply noticed that NASDAQ lacked conviction as it poked through 2,100, coupled with a fair amount of "sell into any rally sentiment", and that inspired a reversal, which drew in the momentum traders and speculators for a nice ride down.  It never pays to get too excited by this type of technical move.  Still, closeting 35 points off a new intra-day high deserves at least a moderate yellow flag.

The economic data remains mixed;  no new news there.

Money does continue to flow into domestic stock mutual funds, albeit at a fairly moderate pace.

NASDAQ trading volume was heavy (2.06 billion shares), and breadth was strongly negative, with 2.34 gainers for each loser.  This was a good solid sell-off, although the point decline was not overly dramatic.

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-- Jack Krupansky

Stock Market Commentary for Saturday, June 25, 2005

People once again blamed $60 oil for the sell-off on Friday, with NASDAQ falling a moderately sharp 17.39 points, but it was probably once again more of a technical correction rather than based on true economic and business fundamentals.  Traders and short-term speculators quickly lose patience when upward momentum peters out or once a "target" price (such as the NASDAQ 2,100 level) is reached, especially when stock mutual fund money flows are rather mediocre.  Still, I wouldn't count the Spring advance out yet.  It never pays to get too excited by this type of technical move.

The economic data was reasonably decent, although it remains somewhat mixed.  No new news there.  The economy continues to "flutter", undecided about whether to weaken or reaccelerate

NASDAQ trading volume was extremely heavy (3.04 billion shares), and breadth was moderately negative, with 1.47 losers for each gainer.  This was not a typical sell-off.  The trading volume was huge, but the point-decline and breadth weren't so bad.  This suggests a lot of day trading and rotation between stocks rather than a strict sell-off.

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-- Jack Krupansky

Stock Market Commentary for Friday, June 24, 2005

People blamed $60 oil for the sell-off, with NASDAQ falling a barely-sharp 21.37 points, but it was probably more of a technical correction rather than based on true economic and business fundamentals.  I wouldn't count the Spring advance out yet.  Speculators simply noticed that NASDAQ lacked conviction as it poked through 2,100, coupled with a fair amount of "sell into any rally sentiment", and that inspired a reversal, which drew in the momentum traders and speculators for a nice ride down.  It never pays to get too excited by this type of technical move.  Still, closing 35 points off a new intra-day high deserves at least a moderate yellow flag.

The economic data remains mixed;  no new news there.

Money does continue to flow into domestic stock mutual funds, albeit at a fairly moderate pace.

NASDAQ trading volume was heavy (2.06 billion shares), and breadth was strongly negative, with 2.34 gainers for each loser.  This was a good solid sell-off, although the point decline was not overly dramatic.

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-- Jack Krupansky

Stock Market Commentary for Friday, June 24, 2005

People blamed $60 oil for the sell-off, with NASDAQ falling a barely-sharp 21.37 points, but it was probably more of a technical correction rather than based on true economic and business fundamentals.  I wouldn't count the Spring advance out yet.  Speculators simply noticed that NASDAQ lacked conviction as it poked through 2,100, coupled with a fair amount of "sell into any rally sentiment", and that inspired a reversal, which drew in the momentum traders and speculators for a nice ride down.  It never pays to get too excited by this type of technical move.  Still, closeting 35 points off a new intra-day high deserves at least a moderate yellow flag.

The economic data remains mixed;  no new news there.

Money does continue to flow into domestic stock mutual funds, albeit at a fairly moderate pace.

NASDAQ trading volume was heavy (2.06 billion shares), and breadth was strongly negative, with 2.34 gainers for each loser.  This was a good solid sell-off, although the point decline was not overly dramatic.

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-- Jack Krupansky

Stock Market Commentary for Thursday, June 23, 2005

The market remained "locked in limbo" again on Wednesday, waiting for the Fed FOMC announcement and economic outlook a week from Thursday and any kind of signs of how the economy is likely to shape up six months from now.  NASDAQ eked out a slight +0.96-point gain as traders and short-term speculators remain reluctant to place any big bets until it becomes clear whether NASDAQ has the oomph to hurdle well clear of the psychological 2,100 level.

NASDAQ actually did poke above the magical 2,100 level for a few minutes in the morning, but trading volume is too light and there is a fair amount of "sell into any rally" sentiment in the market.  That led to a brief sell-off, but by 11:10 a.m. NASDAQ was on its way to recovering for the rest of the day.

NASDAQ did open up moderately (about 6 points) and closed well below that opening level, but it was too modest an opening strike to be a full-fledged market top.  Still, that behavior warrants at least a modest yellow flag.

There was very little economic data to speak of.  People want to hear what the Fed FOMC has to say next Thursday.

NASDAQ trading volume was light (1.71 billion shares), and breadth was modestly positive, with 1.12 gainers for each loser.

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-- Jack Krupansky

Stock Market Commentary for Wednesday, June 22, 2005

The market remained "locked in limbo" on Tuesday, waiting for the Fed FOMC announcement and economic outlook a week from Thursday and any kind of signs of how the economy is likely to shape up six months from now. NASDAQ eked out a modest 2.94-point gain as traders and short-term speculators remain reluctant to place any big bets until it becomes clear whether NASDAQ has the oomph to hurdle well clear of the psychological 2,100 level.

Weekly retail sales data is mixed and not giving a clear signal as to whether high oil prices are causing much of a retrenchment in consumer spending.

NASDAQ trading volume was very light (1.60 billion shares), and breadth was slightly positive, with 1.04 gainers for each loser.

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-- Jack Krupansky

Stock Market Commentary for Tuesday, June 21, 2005

The market may now essentially be in a holding pattern, as we go into "Fed Watch" mode for the Fed FOMC meeting next Wednesday and Thursday.  People blamed early weakness on "skyrocketing" oil prices (no new news there), but the market actually bounced back from most of that trader-induced frenzy, with NASDAQ declining by only a very modest 1.98 points.

NASDAQ trading volume was very light (1.45 billion shares), and breadth was moderately negative, with 1.41 losers for each gainer.

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-- Jack Krupansky

Stock Market Commentary for Monday, June 20, 2005

[Some minor changes in the actual column since Saturday]

Trading was a bit odd on Friday.  Trading volume was much heavier than it has been in the past few weeks, but the market basically went nowhere, with Nasdaq gaining a mere 0.96 points.  There was clearly some positive sentiment at the open, but shortly followed by an intense amount of "sell into any rally" negative sentiment.  Clearly a lot of people decided to cash out as Nasdaq approached the psychological 2,100 level, but their exit was covered by slightly more than an equal number buying into the market.  There might have been some anxious day trading in there as well that netted out over the day.

The simple fact is that we're in a lackluster economic environment in which there is only a modest, gradual upward pressure on the market that easily gets whipsawed by traders and short-term speculators who have way to much money to burn on playing off market volatility.

From a technical trading perspective, Nasdaq popped  up above the intra-day peak from June 2nd a couple of times before 10:00 a.m., but with such weak conviction that traders and speculators reversed and did their best to push the market down.  They succeeded, but by noon the market was on a gradual recovery for the rest of the day.  It was good to see Nasdaq bounce back from what could have been a very bearish decline.

The fact that Nasdaq opened up moderately but gave back most of those gains is in fact a moderate yellow flag.

Nasdaq trading volume was heavy (2.11 billion shares), and breadth was modestly negative, with 1.08 losers for each gainer.

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-- Jack Krupansky

Stock Market Commentary for Saturday, June 18, 2005

Trading was a bit odd on Friday.  Trading volume was much heavier than it has been in the past few weeks, but the market basically went nowhere, with Nasdaq gaining a mere 0.96 points.  There was clearly some positive sentiment at the open, but shortly followed by an intense amount of "sell into any rally" negative sentiment.  Clearly a lot of people decided to cash out as Nasdaq approached the psychological 2,100 level, but their exit was covered by slightly more than an equal number buying into the market.  There might have been some anxious day trading in there as well that netted out over the day.

The simple fact is that we're in a lackluster economic environment in which there is only a modest, gradual upward pressure on the market that easily gets whipsawed by traders and short-term speculators who have way to much money to burn on playing off market volatility.

From a technical trading perspective, Nasdaq popped  up above the intra-day peak from June 2nd a couple of times before 10:00 a.m., but with such weak conviction that traders and speculators reversed and did their best to push the market down.  They succeeded, but by noon the market was on a gradual recovery for the rest of the day.  It was good to see Nasdaq bounce back from what could have been a very bearish decline.

The fact that Nasdaq opened up moderately but gave back most of those gains is in fact a moderate yellow flag.

Nasdaq trading volume was heavy (2.11 billion shares), and breadth was modestly negative, with 1.08 losers for each gainer.

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-- Jack Krupansky

Stock Market Commentary for Friday, June 17, 2005

The market stumbled a little at the open on Thursday and struggled a little with a weak manufacturing report at noon, but ultimately soldiered ahead, with Nasdaq rising a moderate 14.23 points.  There was clearly at least a little real buying interest to keep the market with a positive tone.

The economic data remains mixed, as usual.

Nasdaq trading volume was moderate (1.87 billion shares), and breadth was almost strongly positive, with 1.93 gainers for each loser.

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-- Jack Krupansky

Stock Market Commentary for Thursday, June 16, 2005

People continued to struggle mightily on Wednesday over unclear expectations for the short-term market trend.  There was a little optimism on the open due to some decent economic data, but "sell into any rally" sentiment took over and sent the market back down.  Some disappointment over the weekly oil inventory report took some people by surprise (unnecessarily) and led to a mini-sell-off, which took Nasdaq down almost 16 points by around 12:30 p.m., but the market recovered nicely for the rest of the afternoon.

Nasdaq rose a modest 5.88 points, but closed 22 points above its intra-day low.  The bad news is that Nasdaq closed modestly below its opening level, which is normally a moderate yellow flag, but since the open was only up eight points, it's not too big a deal.  Given the mid-day sell-off, I'd say this was the big opportunity for technical speculators to break the back of the market, but the market was a bit too resilient for them.

The economic data was fairly decent, but people are still anxious about the price of crude oil.

Nasdaq trading volume was light, not quite moderate (1.73 billion shares), and breadth was moderately positive, with 1.30 gainers for each loser.

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-- Jack Krupansky

Stock Market Commentary for Wednesday, June 15, 2005

Yawn, Tuesday was yet another excruciatingly slow trading session, as people await divine guidance as to which direction the market heads next.  Nasdaq rose a mere 8 cents.  The good news is that there is no serious selling pressure.

As usual, the economic data was mixed.

Nasdaq trading volume was extremely light (1.46 billion shares), and breadth was moderately positive, with 1.40 gainers for each loser. Such positive breadth on a negligible point-gain suggest a rotation from larger-cap stocks to smaller-cap stocks.  The Nasdaq-100 Index Tracking Stock (QQQ) in fact fell by 0.40%.

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-- Jack Krupansky

Stock Market Commentary for Tuesday, June 14, 2005

People are virtually standing around waiting for something, anything to happen.  We'll certainly have a raft of economic data this week, but the only "something" that really matters is the incremental flow of money into stock mutual funds.

Nasdaq managed a modest 5.96-point gain on Monday, but closed 9 points off its intra-day peak.  A lot of that could have been classic day trading, but there is a moderate amount of "sell into any rally" sentiment that will be with us until enough real buying can take us well about the 2,100 level.  In any case, Nasdaq is remaining remarkably resilient in the face of weak momentum.

Nasdaq trading volume was extremely light (1.48 billion shares), and breadth was modestly positive, with 1.15 gainers for each loser.  The market continues to "tread water".

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-- Jack Krupansky

Stock Market Commentary for Monday, June 13, 2005

[Some minor changes in the actual column since Saturday]

Intel (INTC) had a great mid-quarter-update, but it appears that some set of people had expected an even better report.  Another explanation is the traditional "buy the rumor and sell the news" trading strategy and the fact that Intel already had a decent run-up.  The big problem was that trading volume was very light, which can cause extremes of volatility out of all proportion to economic and business realities.  Also, people were coming off Greenspan's economic testimony from Thursday, so sometimes it takes a day or two for people to get back in the saddle.

Nasdaq lost a moderate 13.91 points on Friday, but the good news is that there was no sign of any significant interest in a true sell-off, even after the run-up over the past month.

Nasdaq trading volume was extremely light (1.46 billion shares), and breadth was modestly negative, with 1.12 losers for each gainer.  Volatility can be quite extreme when trading volume is so light.

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-- Jack Krupansky

Stock Market Commentary for Saturday, June 11, 2005

Intel (INTC) had a great mid-quarter-update, but it appears that some set of people had expected an even better report.  Another explanation is the traditional "buy the rumor and sell the news" trading strategy and the fact that Intel already had a decent run-up.  The big problem was that trading volume was very light, which can cause extremes of volatility out of all proportion to economic and business realities.  Also, people were coming off Greenspan's economic testimony from Thursday, so sometimes it takes a day or two for people to get back in the saddle.

Nasdaq lost a moderate 13.91 points on Friday, but the good news is that there was no sign of any significant interest in a true sell-off, even after the run-up over the past month.

Nasdaq trading volume was extremely light (1.46 billion shares), and breadth was modestly negative, with 1.12 losers for each gainer.  Volatility can be quite extreme when trading volume is so light.

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-- Jack Krupansky

Stock Market Commentary for Friday, June 10, 2005

As expected, Greenspan said some soothing words about the economy on Thursday, which helped calm some jittery nerves.  I was impressed by the way he spoke directly about the unevenness of the economy over the past year, and shied away from the administration's candy-coated rhetoric.

Nasdaq rose a moderately sharp 16.73 points.  Some of the gain can be attributed to "Greenspan relief", and some to anticipation of a solid mid-quarter update from Intel (INTC) after the market closed.

We had some additional modest stock mutual fund inflows over the past week, which may help to restore the market's modest upwards bias, presuming that those flows continue.

Nasdaq trading volume was light (1.69 billion shares), and breadth was moderately positive, with 1.54 gainers for each loser.  This is the still epitome of a "treading water" market, with such light volume and mixed breadth.

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-- Jack Krupansky

Stock Market Commentary for Thursday, June 9, 2005

The market remained "locked in limbo" on Wednesday.  There's enough uncertainty about the economic outlook that many people (including myself) really do want to hear what Greenspan has to say about the economic outlook today (Thursday).  I imagine he'll be fairly exuberant.  Meanwhile the official White House forecast is a tad less exuberant.

Nasdaq's moderate 6.98-point decline was another disappointment, but this is what happens when short-term momentum speculators get tired of waiting around for the next up-leg to take off.

It was a bit disheartening to see Nasdaq open higher and then reverse.  This is called "sell into the rally" sentiment.  It can be associated with a market top, but is also seen whenever the market pauses before a continuation of an up-leg.

Nasdaq trading volume was light (1.63 billion shares), and breadth was moderately negative, with 1.37 losers for each gainer.  This is the epitome of a "treading water" market.

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-- Jack Krupansky

Stock Market Commentary for Wednesday, June 8, 2005

The market remains "locked in limbo", albeit with significant volatility, as people wait for a true trend to develop.  Nasdaq's moderate 8.60-point loss on Tuesday was a disappointment, but not really too big a deal and didn't establish a new intraday low below Monday's.

There was some buying enthusiasm in the middle of the morning, but there was also a lot of "sell into the rally" sentiment that inspired momentum traders and speculators to "head for the exits."  This didn't look like a true market-top sell-off, but I'd be a little concerned.

Nasdaq trading volume was moderate (1.90 billion shares), and breadth was modestly positive, with 1.10 losers for each gainer.  This is the epitome of a "treading water" market.

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-- Jack Krupansky

Stock Market Commentary for Tuesday, June 7, 2005

Despite the chatter on Monday that the market is waiting for Greenspan to speak, it remains in a limbo state awaiting an accumulation of money flows (in or out) that would cause it to move in a manner contrary to the expectations of traders and short-term speculators, who like to see stocks trade in a range or follow momentum.

Nasdaq continued Friday's sell-off in the morning, but hit an intra-day low very shortly after 11:00 a.m. and then recovered for the rest of the day, closing up a modest 4.33 points, and 9 points above the morning low.

The good news is that there was no continuation of the selling pressure that was seen on Friday.

Nasdaq trading volume was very light (1.52 billion shares), and breadth was modestly positive, with 1.17 losers for each gainer.  This is the epitome of a "treading water" market.

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-- Jack Krupansky

Mactel

The Apple/Intel news is great.  My only disappointment was that Apple didn't *insist* that Intel second-source the chip designs, either to AMD or IBM or some Far-East fab.  I'm disappointed that Jobs let such a golden opportunity pass.

 

-- Jack Krupansky

Stock Market Commentary for Monday, June 5, 2005

[Some minor changes in the actual column since Saturday]

Finally, we had a decent profit-taking session on Friday, with Nasdaq suffering a sharp 26.37-point decline.  It had to happen eventually and it always does.  This does not signal the end of the current up-leg, but is simply a chance for the market to "digest" a little of the recent gains.  The nominal "catalyst" for the decline was the weak employment report, but anybody with any sense (and I'm sure there are at least one or two besides me) knows not to pay too much attention to volatility in these numbers.  Last month was a great month and this month was a mediocre month and they average out to a fairly decent number.  Enough said.

The market opened with some negative sentiment and there simply wasn't enough buying pressure to cause traders and short-term speculators to do anything other than to take a bearish stance, and in the face of such a stance, short-term momentum speculators "headed for the exits."  This happens sometimes, but doesn't give us a clue as to the future trend.

The economic data continues to be mixed and so-so.  There's been no significant change over the past week or month.

Nasdaq trading volume was light (1.68 billion shares), and breadth was moderately negative, with 1.73 losers for each gainer.  This was not a heavy sell-off, despite the sharp point decline.

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-- Jack Krupansky

Stock Market Commentary for Saturday, June 4, 2005

Finally, we had a decent profit-taking session on Friday, with Nasdaq suffering a sharp 26.37-point decline.  It had to happen eventually and it always does.  This does not signal the end of the current up-leg, but is simply a chance for the market to "digest" a little of the recent gains.  The nominal "catalyst" for the decline was the weak employment report, but anybody with any sense (and I'm sure there are at least one or two besides me) knows not to pay too much attention to volatility in these numbers.  Last month was a great month and this month was a mediocre month and they average out to a fairly decent number.  Enough said.

The market opened with some negative sentiment and there simply wasn't enough buying pressure to cause traders and short-term speculators to do anything other than to take a bearish stance, and in the face of such a stance, short-term momentum speculators "headed for the exits."  This happens sometimes, but doesn't give us a clue as to the future trend.

The economic data continues to be mixed and so-so.  There's been no significant change over the past week or month.

Nasdaq trading volume was light (1.68 billion shares), and breadth was moderately negative, with 1.73 losers for each gainer.  This was not a heavy sell-off, despite the sharp point decline.

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-- Jack Krupansky

Stock Market Commentary for Friday, June 3, 2005

The market remains in an incremental bull mode, scoring medium-size gains in the face of a lack of overwhelming news.  Nasdaq rose a moderate 9.94 points.

The good news was that Nasdaq opened with some negative sentiment and managed to turn it around and recover through the rest of the day.  The open was in fact the low for the day.  This is a good sign.

Nasdaq is now just a small hop short of the psychological 2,100 level.

The economic data continues to be mixed and so-so.

Stock mutual fund inflows continue, for a second week, but are still rather lean.

Nasdaq trading volume was moderate (1.82 billion shares), and breadth was modestly positive, with 1.13 gainers for each loser.  This was not a strong rally.

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-- Jack Krupansky

Stock Market Commentary for Thursday, June 2, 2005

There was probably at least a little real buying on Wednesday to keep the market moving higher, but I strongly suspect that a healthy slug of the buying was simply short-covering by speculators who had bet too heavily too soon that the market had run out of steam and was about to roll over in a steep correction.  The almost-sharp Nasdaq gain of 19.22 points was nice, but it just seemed a little too mushy and half-hearted to be labeled as a strong rally.

I was a little disappointed that Nasdaq closed 8 points off it's intra-day high and at the level it had reached by 10:20 a.m.  In other words much of the day was spent "digesting" the gain rather than truly rallying.  I'm not happy about seeing that kind of "sell into the rally" sentiment, but a little is to be expected.

The economic data continues to be mixed and so-so.

Nasdaq trading volume was moderate (1.81 billion shares), and breadth was moderately strongly positive, with 1.82 gainers for each loser.  Despite the nice point gain, this was not a very strong rally, with mediocre volume and so-so breadth.  I wouldn't get too excited about the rally on Wednesday.

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-- Jack Krupansky