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