The Standard and Poors 500 index (SPX) closed today at 6827, down 74 points for a loss of 1.1%. SPX opened the week at 6875, losing 0.7% for the week. Trading volume has been running below average this week.

VIX, the volatility index for the S&P 500 options, closed today at 15.7% after spiking to 17.9% this morning. VIX opened the week at 16.2% and closed yesterday at 14.9%, setting us up for a surprise this morning.

I monitor the movement of high beta stocks by tracking the ETF containing the top 100 S&P 500 stocks ranked by beta, SPHB. SPHB closed at 118.2 today, down almost three points or -2.3%. SPHB opened the week at 118.4, setting up a weekly decline of 0.2%. 

The NASDAQ Composite index closed today at 23,195, down 399 points or 
-1.7%. NASDAQ opened the week at 23,638, setting up a weekly loss of 1.8%. NASDAQ’s trading volume ran at or below the 50 dma all week. Nasdaq’s trading volume has run below the 50 dma since 11/24.



Today was an ugly day in the market with all of the broad market indices posting losses. Apparently, the market reacted badly to AVGO’s earnings announcement last evening with AVGO losing 46 points or 11% today. Market analysts point to that event as the trigger for today’s sell-off. However, it is worth noting that AVGO’s sales grew 28% and yet earnings grew 37%. Today's market reaction to AVGO seems excessive but may provide hope of recovery next week.

The S&P 500, NASDAQ and the high beta stocks of the S&P 500 (SPHB) all posted losses today, ranging from 1.1% to 2.3%. Many analysts consider SPX to be the broadest measure of the market. Yesterday’s close at 6901 was just below the recent high of 6920 on October 29. The S&P 500 closed down at 6827 after bouncing off support at 6800. The fact that the S&P 500 found support at 6800 is encouraging. Another positive sign was the recovery of the volatility index (VIX) for the S&P 500 today, closing at 15.7% after spiking to 17.9% this morning. The NASDAQ Composite is trading weaker than SPX, closing just above its 50 dma today.

I felt bullish about the market yesterday and thought the bullish run was accelerating. Today’s sell-off surprised me. Two of my trades were set to post their maximum gains yesterday but ended up taking large losses today. Hopefully we can put AVGO’s earnings and the market’s response behind us on Monday.