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