The Standard and Poors 500 index (SPX) closed today at 4136, up 75 points on the day or +1.9%. SPX opened the week at 4167, so today’s large gain wasn’t enough to save the week from a 0.7% loss. Trading volume was bouncing around the 50-day moving average (dma) this week and came in at 2.4 billion shares today, just below the 50 dma at 2.5 billion shares

VIX, the volatility index for the S&P 500 options, opened the week at 16.4%, rose to a peak of 21.3% on Thursday but then fell significantly today to close at 17.2%. Today’s close matches the low for 2022, but Monday’s intraday low for VIX at 15.5% marks the low for both 2022 and 2023.

I track the Russell 2000 index with the IWM ETF, which closed today at 174.45, up 4.1 points or +2.4% on the day. IWM opened the week at 175, so even today’s large gap opening and strong run could not push IWM into the positive column for the week. IWM remains well below both its 50 dma and 200 dma and is almost 14% below its February high. Keep in mind that we expect the small to mid-cap stocks to lead bull markets higher.

The NASDAQ Composite index closed at 12,235 today, up 269 points 
or +2.3%. NASDAQ opened the week at 12,210, resulting in a weekly gain of +0.2%. NASDAQ touched its February high of 12,270 today and pulled back a bit into the close. NASDAQ’s trading volume fell off dramatically over the last two days, closing at 3.7 billion shares today, well below the 50 dma at five billion shares.

The FOMC meeting was virtually all of the news that appeared to matter to traders this week. Wednesday’s announcement could be summed up as raising the discount rate another 25 basis points with only a hint at the Fed being prepared to end the rate hikes anytime soon. As the market waited on the fed meeting on Tuesday, the markets slid a bit and that slide continued after they read the announcement on Wednesday. After considering the news overnight, the market tumbled again yesterday, but woke up in a better mood today.

The death watch for the next banks to fail was somewhat surpassed by speculating about the FOMC this week, but the feds closed First Republic Bank on Monday and arranged its acquisition by J.P. Morgan Chase. This run on the banks is worrisome for the obvious reasons, but I am also concerned about the continuing trend of large banks becoming even larger.

The bulls do seem to be reasserting themselves, but it is hard to ignore the massive national debt while politicians in both parties refuse to make any serious attempts to get spending under control. It is difficult to imagine a bull market under these circumstances. In the meantime, the perennial "sky is falling" gurus are busy sounding the alarm.

I continue to leave a lot of capital on the sidelines and choose my trades very carefully. I close winners early just to avoid the next whipsaw in the markets.

Be patient and hedge yourself carefully.