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The Standard and Poors 500 index (SPX) closed Friday at 4109, down 68 points on the day or -1.6%. SPX opened the week at 4151, resulting in a loss of one percent for this shortened holiday week. 
Trading volume spiked higher to open the week on Tuesday but sank far below the 50-day moving average (dma) for the rest of the week.

VIX, the volatility index for the S&P 500 options, opened Tuesday at 27% and closed Friday at 25%. This is the lowest level for VIX since the last week of April.

The NASDAQ Composite index closed at 12,013 Friday, down 304 points or 
2.5% and down one percent for the week. Trading volume spiked Tuesday but declined below 50 dma for the balance of the week.

The overall market has been very volatile this year, and the overall trend has been lower. After hitting a low of 21% on May 20th, SPX strengthened somewhat over the past two weeks to cut the loss to -14%. The principal worries for the market are record levels of inflation, rising energy prices and increasing interest rates. The last GDP estimate was negative, causing concerns about stagflation to mount. Can the Feds raise rates enough to counter inflation without cratering the economy?

Overall market trading was flat this week. Are we about to tip over into an even more severe correction? Or have we stabilized at this level? That is anyone’s guess. Last week’s trading was very bullish, but we have seen many short-lived rallies this year abruptly and painfully ended. Remain on guard. Trade small and leave a substantial amount of your investment capital in cash or in relatively safe utility and REIT stocks.