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The Standard and Poors 500 index (SPX) closed today at 6297, virtually unchanged from yesterday. SPX opened the week at 6255, for a weekly increase of 0.7%. Trading volume ran along the 50-day moving average (50 dma) all week.
VIX, the volatility index for the S&P 500 options, opened the week at 17.7% and declined, closing today at 16.4%. This VIX chart is almost identical to last week’s chart.
I track the movement of the top 100 S&P 500 stocks ranked by beta, SPHB, to monitor the movement of high beta stocks. SPHB closed at 102.5 today, up 0.5% today and up 1.6% for the week. This steady rise in the high beta stocks relative to a flat week with the S&P 500 stocks is a bullish signal.
The NASDAQ Composite index closed today at 20,896, up 11 points or
0.05%. NASDAQ opened the week at 20,593, setting up a weekly gain of 1.5%. NASDAQ’s trading volume ran at or below the 50 dma with the exception of Thursday.
One of the larger uncertainties worrying analysts about the US economy was tariff negotiations and the effect on inflation. That concern appears to be softening with the latest PPI reading coming in unchanged for June and up 2.3% year over year. CPI reported an increase of 0.3% for June but is only up 2.7% year over year. Those reports seemed to be calming markets this week.
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The Standard and Poors 500 index (SPX) closed today at 6260, down 21 points or -0.3%. SPX opened the week at 6259, essentially where it closed today. Trading volume was below the 50-day moving average (50 dma) and declining this week.
VIX, the volatility index for the S&P 500 options, opened the week at 17.8% and declined all week, closing today at 16.34. The markets are nervous, but we are seeing the beginning of “risk on” behavior.
I track the movement of the top 100 S&P 500 stocks ranked by beta, SPHB, to monitor the movement of high beta stocks. SPHB closed at 101.3 today, up 0.7% today and up 1.6% for the week. As you may see on the price chart, the high beta stocks have been steadily moving higher since early June, a strong bullish signal.
The NASDAQ Composite index closed today at 20,510, down 45 points or
-0.2%. However, NASDAQ opened the week at 20,491, setting up a small weekly gain of +0.09%. NASDAQ’s trading volume tracked roughly sideways this week, above average two days and below average three days.
News and rumors from the Israel/Iran conflict, the Ukraine/Russia war, and the back-and-forth news about tariff negotiations kept price volatility rather high. Market prices have been choppy, but generally flat to bullish this week.
The S&P 500 and NASDAQ were essentially flat this week with losses of 0.3% and 0.2%, respectively. The bullish news can be found in the high beta stocks of the S&P 500. That index, SPHB, has been steadily higher since early June.
We start the earnings announcement cycle next week and that may cause additional market volatility. Although most news on corporate earnings has been bullish so far, headlines and rumors could cause some ups and downs on a daily basis. I think the bulls are largely in charge, but uncertainty abounds and that results in nervous trigger fingers.
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The Standard and Poors 500 index (SPX) closed today at 5968, down 13 points or -0.2%. This week’s trading was choppy and slightly lower, primarily due to uncertainty over the Israeli and Iran war. SPX opened the week at 6004 for a weekly loss
of -0.6%. Note the support level of 5967 operative today. Trading volume for the S&P 500 stocks continues its trend of running below the 50-day moving average (dma) with today’s volume spike due to quadruple witching (expiration of the stock index futures, single stock options, options on the stock index futures, and expiration of the quarterly stock index options).
VIX, the volatility index for the S&P 500 options, opened the week at 19.8% and closed today at 20.6%, up 0.5 points or +2.4%. The large institutions and hedge funds are carefully protecting their gains, concerned about expansion of the military action in the middle east.
I track the Russell 2000 index with the IWM ETF, which closed today at 209.2, down 0.4 points or -0.2%. IWM opened the week at 210.5 for a loss of -0.6%. Trading volume rose above the 50 dma yesterday and today. Note the support level at 208. I will be watching that level next week.
The NASDAQ Composite index closed today at 19,447, down 99 points or
-0.5%. NASDAQ opened the week at 19,551, setting up a weekly loss of -0.5%. Note the support level at 19,440 as the market opens next week. NASDAQ’s trading volume declined this week but was pushed above the 50 dma today by quadruple witching.
Market trading action this week was largely sideways with a slight decline back to the mid-May highs. For the S&P 500 stocks, that level is 5967. For the NASDAQ Composite and the Russell 2000 indices, those support levels are 19,440 and 208, respectively. I will be watching those levels closely as the market opens next week.
The market’s primary worry is the possible expansion of the Israeli/Iran conflict. The trade tariff negotiations continue as a secondary concern. Some of the early negotiation results appear to be calming some of the nerves. The Israeli/Iran conflict has added to the market’s uncertainty, as measured by VIX rising to 21% today.
Our TSLA condor booked an excellent return of 40% today, but this market remains volatile. Keep a close eye on your positions.
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The Standard and Poors 500 index (SPX) closed today at 6173, up 32 points or 0.5%. This week’s trading was strongly bullish with a gain of 3.4% for the week. Trading volume finally spiked higher today after remaining largely below the 50-day moving average (50 dma) for the past two months.
VIX, the volatility index for the S&P 500 options, opened the week at 21.2% and declined all week, closing today at 16.3%. We would have to go back to
mid-February to find a similar value for VIX. The bulls are in charge and the large institutions and hedge funds are going “risk on”.
In the past, I have tracked the Russell 2000 index with the IWM ETF in order to monitor the high beta stocks relative to the average S&P 500 stock. However, one of my clients called my attention to SPHB, the Invesco S&P High Beta ETF. SPHB is an ETF composed of the top 100 S&P 500 stocks ranked by beta. SPX gained 3.4% this week; IWM also gained 3.4% this week, so the Russell 2000 index must have an average beta across its stocks close to that of the S&P 500. By contrast, SPHB gained 5.2% this week. I will use SPHB to monitor the movement of high beta stocks in the future.
The NASDAQ Composite index closed today at 20,273, up 106 points or 0.5%. NASDAQ opened the week at 19,427, setting up a weekly gain of 4.4%. NASDAQ’s trading volume ran below the 50 dma this week but spiked higher today.
The bulls were running this week, gapping open higher three mornings this week. The S&P 500 stocks and the NASDAQ Composite closed at new all-time highs today. A cease fire in the Israeli/Iran conflict certainly played a role. Progress in several of the trade tariff negotiations helped improve the market’s mood. The NASDAQ Composite led the S&P 500 stocks this week. This appears to be a replay of NASDAQ’s high-tech stocks leading the bull runs last year. IBD’s recommendation for market exposure remains at 80-100%. We may be looking at a double-digit year for the markets. Predictions are always dangerous, but this market looks pretty solid at this point.
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The Standard and Poors 500 index (SPX) closed today at 5977, down 68 points or 1.1%. This week’s trading continued the bullish run of the past couple of weeks, but gapped lower today, spooked by the Israeli and Iran war. SPX opened the week at 5977 for a weekly loss of 0.5%. Trading volume for the S&P 500 stocks continues its trend of running below the 50-day moving average (dma).
VIX, the volatility index for the S&P 500 options, opened the week at 17.7% but started increasing on Wednesday and gapped open higher today, closing at 20.8%. The large institutional traders are hedging their gains in light of the military action in the middle east.
I track the Russell 2000 index with the IWM ETF, which closed today at 208.9, down 3.9 points or 2.3%. In addition, IWM gapped down at the opening Thursday and Friday mornings. IWM was down 2.3% this week and all of this negative price action resulted in a 100% spike in trading volume today (25.3M to 60.5M). The high beta stocks of the Russell 2000 index form the canary in the coal mine and may suggest a more challenging market ahead.
The NASDAQ Composite index closed today at 19,407, down 256 points or
1.3%. NASDAQ opened the week at 19,573, setting up a loss of 0.8% for the week. NASDAQ has now given up the past week’s gains. NASDAQ’s trading volume ran at or above the 50 dma all week.
The market gave us some encouragement over the past couple of weeks, but this week’s trading action threw some cold water on early enthusiasm. Consider the data for the broad market indices over the past week:
S&P 500: -0.5%
NASDAQ Composite -0.8%
IWM -2.8%
The losses in IWM (the Russell 2000 index) were the highest by far, reflecting the high beta values of these stocks. Don’t let that tempt you to ignore this warning sign. On both Thursday and Friday mornings, IWM gapped open lower and Friday’s trading volume doubled that of Thursday.
The market is on edge with all of the tariff hype and fear mongering. We see that not only in the wide price swings but also in the SPX volatility index, VIX. VIX had settled down to about 17% by Wednesday but spiked higher to nearly 22% by Friday.
The tariff negotiations, the speed at which the new administration is moving, and now war in the middle east have greatly increased uncertainty on Wall Street. Contrary to conventional wisdom, Wall Street detests uncertainty. The end result is a lot of itchy trigger fingers, both bullish and bearish. Most of my positions are handling these gyrations rather well, but traders would be well advised to keep a close watch.
