The Standard and Poors 500 index (SPX) closed today at 5137, up 41 points or 0.8%. SPX opened the week at 5093, setting up a weekly gain of 0.8%. Today’s strong showing made up for earlier losses this week. Trading volume ran below the 50-day moving average (dma) all week with the exception of Thursday; I don’t know why it spiked then.

VIX, the volatility index for the S&P 500 options, closed today at 13.1%. VIX opened the week at 14.2% but steadily declined the rest of the week.

I track the Russell 2000 index with the IWM ETF, which closed today at 206, up two points on the day (+1.1%) and up three percent for the week. IWM broke the previous high for 2023 at 205 today, but it remains well below its all-time high of 237 from 2021.

The NASDAQ Composite index closed today at 16,275, up 183 points or 1.1%. NASDAQ opened the week at 16,014, for a weekly gain of 1.6%. NASDAQ remains shy of its all-time high from 2021, 16,212. NASDAQ’s trading volume ran at or slightly below the 50 dma all week with the exception of Thursday. What happened on Thursday?

I think the last two years in the market have conditioned me to expect the worst. Since this bull run began in November, I remained pessimistic, expecting a correction. But every time the market pulled back a bit, traders bought the dip and off we went. I tend to evaluate the market on the basis of the economic data, which have been mediocre at best. Every time I see a grocery bill or the cost of a meal at a familiar restaurant, the rate of inflation is impressive – and somehow is much higher than the 3% that is reported by the government.



With all of this bullish price action, one might expect implied volatility to be dropping, but the decline hasn’t been significant. VIX only lost one percentage point this week, closing today at 13.1%. Historically, that is higher than past bull markets. The large institutions may be a bit concerned, but the market steadily pulls ahead.



The Russell 2000 index, as measured by IWM, has been slow to jump on the bulls' wagon. IWM has also been much more volatile that the other broad market indices. IWM has gapped open either higher or lower nine times in February.

One bullish signal is missing in all of this bullish price action and that is higher trading volume. Both the S&P 500 index and NASDAQ have been trading with volume at or below the 50 dma this year with only a few exceptions.

The S&P 500 set a new all-time high today. I was watching the one-minute chart today, and SPX just motored higher all day. I kept expecting a last-minute sell-off as traders took profits, but it didn’t happen. That was a strong bullish signal, especially for a Friday afternoon.