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The Standard and Poors 500 index (SPX) corrected 12% on January 24th and then the market moved to retest that correction on February 24th and broke through to a new low of -14% (It makes you wonder what will happen on March 24th). SPX closed today at 4329, down 35 points. SPX opened the week at 4354 and ended the week down by about half of one percent. Trading volume of the S&P 500 companies ran above the 50-day moving average (dma) all week.

VIX, the volatility index for the S&P 500 options, was very choppy this week but largely unchanged, closing today at 32.0% after beginning the week at 32.4%. Volatility remains elevated; don’t let your guard down.

The NASDAQ Composite index gapped open lower today and closed at 13,313, down 225 points on the day and down 1.9% for the week. NASDAQ trading volume ran above the 50 dma all week but fell below the average today.

The broad market indices traded sideways this week, with the Russell 2000 and NASDAQ trading lower. SPX pulled back this morning but recovered much of that loss going into the early afternoon. The intraday low for SPX bounced off the support level formed by trading last Friday and on Tuesday this week. That shows the bullish sentiment that is holding this market up after these bearish twitches.

News and rumors from Ukraine may spook this market at any time. Relaxing the Covid restrictions here in the states will strengthen the economic recovery but concerns about inflation will intensify as cost data increase, fueled in part by higher oil prices. Uncertainties over the Fed’s expected increase of the discount rate as the March FOMC meeting approaches (March 15-16) will likely result in a choppy, sideways market.

Considerable damage has been done to our markets since late January. SPX remains below its 200 dma. The 50 dma of the Russell 2000 and NASDAQ have crossed the 200 dma, heading lower. All of these markets have a long ways to go for a full recovery. All in all, remaining largely in cash and being very conservative with your investments remain sound advice.