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The Standard and Poors 500 index (SPX) closed today at 4123, down 24 points or 0.6%. The initial response to the FOMC announcement on Wednesday was positive, but that wore off quickly with SPX trading off significantly the last two days. Trading volume was modestly above the 50-day moving average (dma) this week.

VIX, the volatility index for the S&P 500 options, opened Monday at 30%, traded as low as 25% on Wednesday before spiking higher and closing today at 30%. This level of volatility is not modest, even if we are becoming accustomed to it. Remain vigilant.

The NASDAQ Composite index closed at 12,145 today, down 173 points or 
1.4%, and down 1.5% for the week. Trading volume ran below the 50 dma all week. Monday’s intraday low is a 23% correction since the January highs for NASDAQ.

Last Friday’s low was the low for that week, and today’s close was this week’s low. The only good news is the appearance of the broad market finding a support level this week. Of course, I may be proven wrong next week. NASDAQ closed today just below the lows set on Monday and Thursday. SPX’s low on February 24th was around 4115 and trading this week appeared to be trading right along that line.

We have suffered through a lot of bad news: record levels of inflation, FOMC moving to raise interest rates and shrink the money supply and, to top it all off, a negative GDP growth number for the first quarter.

I remain largely in cash, although I did venture out with a couple of trades late in today’s trading session. Those trades were a result of my observations that the market appeared to be finding support this week.
The trades I entered today are just my “toe in the water”. My posture remains very cautious, largely in cash with close stops on the few positions in play.