The Standard and Poors 500 index (SPX) closed today at 5128, up 64 points or +1.3%. SPX opened the week at 5114, gaining 0.3% for the week. The FOMC meeting, announcement and press conference on Wednesday encouraged traders and the market spiked on Wednesday and continued higher yesterday and today. SPX gapped open by 59 points this morning and recovered the index’s 50-day moving average (dma). Trading volume moved higher this week, but barely made it to the 50 dma today.

VIX, the volatility index for the S&P 500 options, closed today at 13.5%, down over one point or -8%. VIX opened the week at 14.8% but spiked as high as 16% during the week.

I track the Russell 2000 index with the IWM ETF, which closed today at 201.9, up two points on the day or one percent. IWM opened the week at 198 and gained 2% this week.

The NASDAQ Composite index closed today at 16,156, up 315 points or +2%. NASDAQ gapped open higher this morning by 306 points, almost 2%.  NASDAQ opened the week at 16,007 for a weekly gain of one percent. Trading volume barely reached the 50 dma earlier this week, and steadily declined after Wednesday, closing 25% below the 50 dma today.

The markets have been very nervous for several weeks, fearing a hard landing for the economy if the Fed continued to raise the discount rate. Many analysts were hoping for a rate reduction but that didn’t happen. However, during the press conference, Powell suggested more rate hikes may not be necessary, although he also cast doubt on any reductions until inflation has clearly declined. That message seemed to resonate with the market, spiking on Wednesday afternoon, although it couldn’t hold those highs. But after sleeping on the news, traders turned in a solid gain on Thursday and then the markets gapped open strongly this morning.

The S&P 500, NASDAQ and the Russell 2000 indices all recovered their 50 day moving averages today.

I ventured out yesterday and today with some bullish trades, but I still have a lot of cash on the sidelines. Be careful out there. Election years are usually bullish, but the economy is fragile, and the federal debt is out of control. Traders are nervous.