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The Standard and Poor’s 500 Index (SPX) bounced off of its 50-day moving average (dma) on Tuesday, recovered and then tested that support level again today, closing at 3811, right at the 50 dma at 3808. Trading volume in the S&P 500 companies increased steadily all week. I believe this shows some selective selling in anticipation of additional pullbacks next week.

VIX, the volatility index for the S&P 500 options, closed today at 28%. Both yesterday and today, VIX spiked as high as 31%. Volatility ranged quite a bit today, from as low as 25% to a high of 31%. Traders are nervous.

IWM, the ETF based on the Russell 2000 group of companies, closed at 218.31 today, down 2.3% for the week. IWM continues to show support at 215, bouncing from that level Tuesday and again today. That makes 215 a good “line in the sand” to watch.

The NASDAQ Composite index closed today at 13,192, down 72 points on the day but down 3.8% for the week, exceeding the losses of both the Russell 2000 index (-2.3%) and the S&P 500 index (-1.9%). NASDAQ’s trading volume declined steadily this week, remaining below the 50 dma.

We close another bearish week for the markets with all of the broad market indices losing 2% or more of their value. The markets are holding at key levels of support this week, but a pullback or correction appears more and more likely. Perhaps we will retest those early February lows.

I am continuing to sell these elevated levels of volatility, but I am also closing positions aggressively when they move against me. Several stocks continue to post strong gains. Deere (DE) is a good example, posting gains this week after its earnings announcement on Monday. I sold the Feb(2/26) 345 put on Wednesday for a 1.2% yield in two days. It will expire worthless tomorrow. But I chose not to roll it out to next week. A weekend can be a long time in this market.

Watch your positions very closely. It is a nervous market.