This first week of the new year opened with SPX trading near all-time highs, but after the FOMC’s minutes were released on Wednesday, we gave it all up and spent the last two days threatening to break the 50-day moving average (dma). SPX closed today at 4677, down 19 points for the day, and down 101 points or over 2% for the first week of the year. The fact that SPX did not break the 50 dma was the only bright spot this week. SPX trading volume resumed its normal levels around the 50 dma after the typical lows of the holidays as nearly everyone takes some time off.

VIX, the volatility index for the S&P 500 options, closed at 18.8% today, down almost a single point. VIX peaked during Wednesday’s downturn at 20.2%. However, we have seen much worse levels as the market pulled back over the last few weeks. In early December, we witnessed spikes over 35%.

I track the Russell 2000 index with the IWM ETF. The owners of Russell have priced everyone out of the Russell 2000 index and option data. That is why I plot the IWM prices. The Russell 2000 index has been signaling a bearish market for several weeks. On November 26th, IWM broke below both its 50 dma and its 200 dma in one trading session. And it remains well below its 200 dma today.

The NASDAQ Composite index closed today at 14,936, down 145 points or 1%. But it gets worse. NASDAQ opened the week at 15,733, losing 5.1% for the first week of trading in the new year. Trading volume generally ran below the 50 dma this week.

Santa brought us coal for our stockings this year, and the new year just piled on. All of the positions in the Conservative Income trading service are closed and I only have two trades open in my trading group. It is a weak start to the new year.