The Standard and Poors 500 index (SPX) closed yesterday at 4169, up 34 points on the day or +0.8%. SPX opened the week at 4132 for a weekly gain of 0.9%. Early in the week, we were heading for the bunker, but then it reversed course. One surprise this week was an increase in trading volume; it ran at or above the 
50-day moving average (dma) for the last four trading sessions. That was encouraging.

VIX, the volatility index for the S&P 500 options, opened the week at 18.2%, rose to a peak of nearly 20% on Tuesday but then fell significantly on Thursday and Friday to close at 15.8%.  One has to look back to November of 2021 to see a lower level of volatility.

I track the Russell 2000 index with the IWM ETF, which closed yesterday at 175.2, up 1.5 points or +0.9% on the day. IWM opened the week at 177.8, so the Russell 2000 index lost 1.5% on the week. And it remains well below both its 50 dma and 200 dma.

The NASDAQ Composite index closed at 12,227 yesterday, up 84 points or +0.7%. NASDAQ opened the week at 12,053, resulting in a weekly gain of +1.4%. NASDAQ is nearing its February high of 12,270. NASDAQ’s trading volume was mixed this week and was above the 50 dma on Wednesday and Friday.

We have experienced quite a roller coaster ride this week. The market appeared locked in a sideways channel last Friday and it looked as though we might break support and head lower on Tuesday and Wednesday, but the balance of the trading this week left the S&P 500 much closer to the February high around 4200. The spike in trading volume with Friday’s strong run was encouraging. However, next week’s market will most likely slow as traders look forward to the FOMC meeting and announcement on Wednesday.

My assessment of this market and my recommendations remain unchanged from last week:

“I remain cautious in this market. A small number of stocks are weathering the storm, but prices are very volatile. Being whipsawed in and out of positions is commonplace.”