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The Standard and Poor’s 500 Index (SPX) closed trading Friday at 3714, down 73 points on Friday and down 3.6% for the week. The close occurred at the fifty-day moving average (dma), often a key inflection point for the market. Trading volume spiked up above the 50 dma for the last three days of the week, underscoring the losses.

VIX, the volatility index for the S&P 500 options, closed Friday at 33.1% after spiking as high as 37.5% on Wednesday and earlier Friday morning. These are dangerous levels of volatility.

IWM, the ETF based on the Russell 2000 group of companies, closed down 3.16 points to 205.56 on Friday, down 4.4% for the week. As expected, IWM’s high beta stocks are outperforming the S&P 500 stocks to the downside as the market declined this week. However, IWM remains well above its 50 dma at 196.36.

The NASDAQ Composite index closed Friday at 13,071, down 266 for the day, and down 4.5% for the week. The recent market leaders are leading the market lower this week. NASDAQ’s trading volume remained well above the 50 dma all week but declined in the latter part of the week.

The concerns I have written about in the last several newsletters continue and the “sky is falling” cries are becoming more shrill. So far, I have simply been closing positions that hit their stops, so the majority of my trades remain open. I have not panicked as yet. One positive sign was the slight recovery of the S&P 500 on Friday. Go back and look at the S&P price chart in late February and early March last year and you will see several closes at the lows of the day. Those are serious bearish signals.

Be cautious about entering new trades until we see some evidence of the markets finding support.