The Standard and Poors 500 index (SPX) closed today at 3917, down 44 points on the day or -1.1%. However, SPX opened the week at 3835 for a weekly gain  of 2.1%. Today was the only down day all week. But the extreme price volatility leaves us feeling as though it traded down all week. Trading volume really came to life this week, running above the 50 day moving average (dma) all week, and peaking at 5.6 billion shares today, double the 50 dma at 2.6 billion shares.

VIX, the volatility index for the S&P 500 options, closed today at 25.5%, up 2.5 points or +11%. VIX opened the week at 24.1%, spiked as high as 30% on Wednesday and then dropped to a low of 23% on Thursday before running up to 25.5% today. The banking scare has created a wild ride for volatility.

I track the Russell 2000 index with the IWM ETF, which closed today at 171.23, down 4.8 points or -2.7% on the day and down 0.75% for the week. IWM broke its 50 dma yesterday and then broke the 200 dma today. IWM is well below both its 50 dma and 200 dma.

The NASDAQ Composite index closed at 11,631 today with a loss of 87 points or -0.7%. However, NASDAQ opened the week at 11,041 leading to a 4.3% gain for the week. NASDAQ managed to regain both its 50 dma and 200 dma this week. NASDAQ’s trading volume ran above average all week and spiked higher today with 7.9 billion shares as compared to the 50 dma at 5.4 billion shares.

We have experienced an interesting couple of weeks. Last Friday we read about the failure of the Silicon Valley Bank. That was a shock. No sooner had Yellen assured us all was well, then Signature Bank closed its doors and now we are hearing dire news about Republic Bank.
 
The CPI and PPI reports early this week gave us hope that the Fed’s rate hikes were having a positive effect on inflation. Then we learned that the rising interest rates were at the heart of these bank failures. Of course, one has to wonder about bank management that didn’t see the writing on the wall as the Fed started this rate hike journey last year.
 
These events have led to speculation that the Fed meeting next week might announce a small discount rate hike or might even take a pause for a meeting or two. This administration has made some special concessions for these banks to keep their depositors whole. One has to wonder if Yellen is leaning on Powell to announce a pause in rate hikes at their meeting next week.
 
A small number of stocks appear to be handling this news well: AMD, AMAT, ANET and others. But this market remains extremely volatile.

Be careful. Stay largely in cash.