Stock Market Commentary for Wednesday, July 20, 2005

The sharp NASDAQ gain of 28.31 points on Tuesday was impressive, but the light trading volume tells us to be cautious about the durability of the gain.  There was probably a fair amount of short covering by people who were betting too heavily that NASDAQ had run out of steam and was due for a sharp correction.  I suspect that there was a modest amount of real buying to keep the market on a rising path.  NASDAQ set yet another closing high for the year (2,173.18).

The decent quarterly report from IBM (IBM) may have been one catalyst, and anticipation of the reports from Intel (INTC) and Yahoo (YHOO) may have been additional catalysts.

The economic data continues to be mixed.

NASDAQ trading volume was light (1.71 billion shares), and breadth was strongly positive, with 2.07 losers for each gainer.  Despite the sharp point gain, this was not a strong rally.

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-- Jack Krupansky