The Standard and Poors index (SPX) tried to recover from its dramatic low on May12th but the recovery stalled this week. SPX closed Friday at 4156, down three points on the day or -0.1%. Friday’s close left SPX with a small decline of 0.3% for the week. Trading volume reached the 50 dma on Wednesday but remained below average the balance of the week.

VIX, the volatility index for the S&P 500 options had another volatile week, opening Monday at 20%, spiking to 26% on Wednesday and closing yesterday back at 20%.  VIX is often called the fear index and this market is twitchy. It can’t decide whether it is bullish or bearish.

The Russell 2000 index, as measured by the IWM ETF, tried to recover from the low set on May 12th but couldn’t quite make it. IWM closed Friday at 219.97, just a touch higher than Monday’s open at 219.78. IWM tested the 50 dma on Tuesday and again yesterday but pulled back to close below the 50 dma both times.

The NASDAQ Composite index closed at 13471, down 65 points but the index managed a positive increase for the week of 0.8%.  NASDAQ tried to recover its 50 dma on Friday but pulled back before the market closed. NASDAQ’s trading volume remained below average and declined all week.
Last week’s report of the consumer and producer price indices resulted in talk of runaway inflation and spooked the market. The market attempted a recovery move this week, but feel short.

NASDAQ remains weak and Friday’s failed attempt at breaking out above the 50 dma was disappointing. This week’s trading with its retest of last week’s low was disconcerting. Likewise, the Russell 200 can’t recover its 50 dma. The S&P 500 and the Dow Jones Industrials are the only major market indices trading higher than the 50 dma. I found myself closing several trades on Friday rather than risking the weekend and Monday’s open.

The cash basis of my trading accounts moved higher this week, from 75% to 92%. I didn’t open many new trades this week and I was cautious when rolling out current income positions. I continue to focus on stocks that appear to be weathering these transient storms well. There is nothing wrong with cash.