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