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The prospect of the markets making new highs seems to be elusive. SPX closed at $2099, up $2, after a trading day that was mostly underwater. RUT gained $8 to close at $1163. Volatility was flat with the VIX unchanged at 14.2%. The high for SPX from last November was just above $2110, and SPX touched that level intraday in mid-April, but fell back. This latest run higher now seems to have stalled. Trading volume remains below average at 2.0 billion shares of the S&P 500 stocks; the 50 dma is 2.2 billion shares. The markets hit their lows for the day right after the open this morning and then slowly improved throughout the day. Some analysts attributed the improvement to prospects of an oil production deal from tomorrow's OPEC meeting, but it is anyone's guess what will come out of that meeting.

Economic data remain mediocre at best, even though the President began a pep rally tour on the economy in Indiana today. Yesterday, the Chicago PMI dropped from 50.4 to 49.3 for May. Today's ISM manufacturing index continues to flirt with that 50 level - the dividing line between economic expansion and contraction, coming in at 51.3 for May, up from 50.8. Over the past ten months, we have had five reports over 50 and five under fifty. Construction spending declined 1.8% in May after a 1.5% gain in April. This is the largest decline in construction spending in five years. The minutes from the last FOMC meeting, the Beige book, gave the economy faint praise as "showing moderate economic growth". The decline in construction spending has prompted several analysts to reduce their second quarter GDP estimates.

If we turn to a review of historical price data from the Stock Traders Almanac, we see that we are entering the weakest three months of the year for the markets, July through September. From 1971 through 2016, the NASDAQ Composite declines in June and hits negative numbers in September, before beginning to recover in October. Based on historical data alone, we might be well served to limit our involvement in the markets for the next couple of months. I think the uncertainties of the presidential election will add even more price volatility for the next few months. It will be hard for the bulls or the bears to take control of this market.