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