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