The Standard and Poors 500 index (SPX) closed today at 4282, up 61 points on the day or +1.5%. SPX opened the short week at 4227, closing the week at a gain of 1.3%. For a significant change, trading volume managed to stay above the 50-day moving average (dma) all week. Is this the turn higher?

VIX, the volatility index for the S&P 500 options, opened the week at 17.6%, and closed today at 14.6%, down 17% for the week. We haven’t seen volatility this low since July of 2021.

I track the Russell 2000 index with the IWM ETF, which closed today at 182.02, up 6.4 points or 3.6% on the day. IWM opened the week at 176.7 for a 3% gain for the holiday shortened week. Normally the small cap stocks of the Russell 2000 lead bullish runs, but this index has a long way to go. IWM broke its 50 dma yesterday and broke out above the 200 dma today, but it must tack on a full 9% to return to its February highs.

The NASDAQ Composite index closed at 13,241 today, up 140 points or +1.1%. NASDAQ opened the week at 13,109, resulting in a nearly identical weekly gain of +1.0%. NASDAQ and the S&P 500 have broken their February highs, although NASDAQ is well ahead of SPX. Unlike SPX, NASDAQ’s trading volume was relatively low again this week, managing to break above its 50 dma only on Wednesday.

Price action in the markets has been choppy for the past several weeks and the broad market indices have been trapped in a sideways trading channel. The market’s attention was focused on the debt limit negotiations. The market celebrated the bipartisan deal, although the debt problem is just being kicked down the road.

I will be watching next week’s market action very carefully for any cracks in the new enthusiasm. Concerns about inflation, higher interest rates and the next bank failure may raise their ugly heads next week.

I am unsure that all is well in our economy, so I am going to be cautious about jumping on this bandwagon.