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The Standard and Poors 500 index (SPX) closed today at 6729, up 8 points or 0.1%. SPX opened the week at 6882, losing 2.2% for the week. Trading volume ran just above the 50-day moving average (dma) all week.
VIX, the volatility index for the S&P 500 options, closed today at 19.1%, but that only tells part of the story. VIX spiked to 22.7% today before declining to 19.1% at the close. Recovery?
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 112.5 today, up less than one point or +0.4%. SPHB opened the week at 115.6, setting up a weekly decline of 2.7%. SPHB trading volume spiked up to 956,900 shares today, 157% over the 50 dma.
The NASDAQ Composite index closed today at 23,005, down 49 points or
0.2%. NASDAQ opened the week at 23,952, setting up a large weekly loss of 4.0%. NASDAQ’s trading volume ran along the 50 dma all week.
The federal government remains closed, eliminating significant economic and unemployment data, leaving traders in the dark. Perhaps that is one of the factors resulting in the current levels of market volatility.
The broad market indices hit all-time highs on 11/3, but began a slide lower the next day. This week’s declines were ugly with SPX at -2.2%, NASDAQ at
-4.0% and the high beta stocks of the S&P 500 declining 2.7%.
The S&P 500 and the NASDAQ Composite broke their 50 day moving averages on Friday. That is normally a significant bearish signal. However, that signal appeared to awaken the bull, as all of the indices perked up and recovered a large portion of this week’s losses. SPX is down 2.2% this week but managed to recover enough by the close today to post a small, but positive, daily gain.
A strong bullish signal came from the S&P’s high beta stocks. Their trading volume spiked today to 956,900 shares, up 157% over the 50 dma. That suggests that large institutional traders saw this a “risk on” event and began loading up on high beta stocks to magnify portfolio gains.
I am looking forward to Monday’s market opening to see if the bullish ending of today’s market continues next week. I am optimistic but cautious.
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The Standard and Poors 500 index (SPX) put on a show this week, hitting a new all-time high on Wednesday, falling out of bed on Thursday, and then recovering all of that loss today, closing at 6840. SPX opened the week at 6845 to end the week essentially unchanged. Trading volume spiked for the last three days of the week.
VIX, the volatility index for the S&P 500 options, opened the week at 15.7% and closed today at 17.4%. VIX increased all week as traders worried about the FOMC and then were spooked by Powell’s comments on Thursday.
I track the movement of the ETF containing the top 100 S&P 500 stocks ranked by beta, SPHB, to monitor the movement of high beta stocks. SPHB closed at 115.1 today, +0.7 points or 0.6%. SPHB opened the week at 116 for a weekly loss of 0.8%. SPHB trading volume spiked with the FOMC drop on Thursday but ran below the 50 dma the rest of the week.
The NASDAQ Composite index recovered much of Wednesday’s collapse, closing at 23,725, up 144 points or 0.6%. NASDAQ opened the week at 23,537, gaining 0.8% for the week. Trading volume ran at or above the 50 dma all week.
The federal government remains closed, eliminating significant economic and unemployment data, leaving traders in the dark in terms of economic and unemployment data. The market continues to be fundamentally bullish, but with significant price spikes and declines, based on the news and rumors each day.
The FOMC reduced the federal discount rate by 25 basis points on Thursday and the market spiked higher. But then Powell threw cold water on the market when asked about another rate cut in December. Normally he would have answered that the decision would depend on the data in December, but not this time. He opined that he doubted another rate cut would occur this year. The market tanked. But we recovered most of that loss on Friday. I take that as a sign of bullish confidence. But the volatility is spooky.
My advice for next week remains the same: Stay calm and look for opportunities, but don’t force the trade. It doesn’t hurt to take a pause.
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The Standard and Poors 500 index (SPX) plunged today, closing at 6553, down 183 points or 2.7%. SPX opened the week at 6734 for a loss of 2.7% for the week. Trading volume ran along the 50 dma all week but spiked higher today as the market sold off. The S&P 500 index has not traded off this badly since the correction in early April.
VIX, the volatility index for the S&P 500 options, opened the week at 16.7% and traded sideways most of the week, closing Thursday at 16.4%. However, today’s sell-off spiked volatility to a close of 21.7%.
I track the movement of the ETF containing the top 100 S&P 500 stocks ranked by beta, SPHB, to monitor the movement of high beta stocks. SPHB closed at 107.5 today, down 5.4 points or 4.8%. SPHB opened the week at 113.7 for a weekly decline of 5.5%. SPHB trading volume spiked up 274% today.
The NASDAQ Composite index collapsed today, closing at 22,204, down 820 points or 3.6%. NASDAQ opened the week at 22,894, losing 3.0% for the week. Trading volume ran steadily above the 50 dma all week and didn’t even spike higher with the market sell-off today.
Since the market correction hit its low in early April, the market has steadily trended higher, in spite of multiple uncertainties: tariffs, political tension, deportation of illegal immigrants, etc. After the cease fire announcement in the middle east yesterday, I assumed a strong market would make its showing today. That prediction lasted until just before 11 am ET, when news of increased tariff tensions with China hit the markets. From that moment until the close of trading the S&P 500 lost over 2.7%. Ugly!
The federal government remains closed, eliminating significant economic and unemployment data. Shortly before the shutdown, the third and final estimate of second quarter GDP growth came in at +3.8%. That was impressive, but now it seems we are trading largely in the dark in terms of economic and unemployment data.
I have often cautioned my clients about event risk. It is always a surprise and it can really hurt, just as it did today. When these market sell-offs occur on Fridays, analysts always speculate:
• Will calmer minds dominate trading on Monday morning?
• Will the lower prices be seen as buying opportunities?
• Could the market slide continue lower?
Stay calm and look for opportunities, but don’t force the trade. It doesn’t hurt to take a pause.
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The Standard and Poors 500 index (SPX) closed up 35 points today, closing at 6664. SPX opened the week at 6623, setting up a weekly gain of 0.6%. Trading volume ran along the 50 dma all week. SPX is trading within the channel from 6561 to 6705.
VIX, the volatility index for the S&P 500 options, opened the week at 19.5% and climbed as high as 28% this morning but closed today at 20.8%, down 18%. The market has calmed significantly.
I track the movement of the ETF containing the top 100 S&P 500 stocks ranked by beta, SPHB, to monitor the movement of high beta stocks. SPHB closed at 111.1 today, down less than one point or 0.1%. SPHB opened the week at 110 for a weekly gain of one percent. SPHB trading volume ran above average all week with the exception of Thursday.
The NASDAQ Composite index recovered much of last Friday’s collapse, closing at 22,680, up 117 points or 0.5%. NASDAQ opened the week at 22,579, gaining 0.4% for the week. Trading volume ran above the 50 dma most of the week but settled down to the 50 dma today.
Traders opened this week carefully after last Friday’s ugly decline of 2.7%.
The federal government remains closed, eliminating significant economic and unemployment data, leaving traders in the dark in terms of economic and unemployment data.
Last Friday, I suggested three possibilities for this week:
• Will calmer minds dominate trading on Monday morning?
• Will the lower prices be seen as buying opportunities?
• Could the market slide continue lower?
The S&P 500 stocks gave up 187 points last Friday, but they recovered 41% of that loss this week. I take that as a sign of bullish confidence. We aren’t going over the cliff. It just remains a very volatile market.
My advice for next week remains the same: Stay calm and look for opportunities, but don’t force the trade. It doesn’t hurt to take a pause.
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The Standard and Poors 500 index (SPX) set another all-time high today, closing at 6664, up 32 points or +0.5%. SPX opened the week at 6603 for a 0.9% gain for the week. Trading volume ran along the 50 dma all week, with the exception of today’s spike, due to quadruple witching.
VIX, the volatility index for the S&P 500 options, opened the week at 15.1%, and closed today at 15.5%. VIX spiked up a bit to 16.8% on Wednesday with the FOMC announcement.
I track the movement of the ETF containing the top 100 S&P 500 stocks ranked by beta, SPHB, to monitor the movement of high beta stocks. SPHB closed at 110.6 today, down less than one point or -0.1%. SPHB opened the week at 108.0 and posted a gain of 2.4% for the week. Trading volume spiked higher yesterday after the FOMC announcement.
The NASDAQ Composite index set a new all-time high today, closing at 22,631, up 161 points or 0.7%. NASDAQ opened the week at 22,343, gaining 1.3% for the week. Trading volume remained at or below the 50 dma this week except for a move higher yesterday and a large spike today with the quadruple witching today.
This market has lived with the uncertainties of the tariffs, political tension, deportation of illegal immigrants, and the continuous noise of the protesters as background. Apparently, it is becoming old hat, and the market just motors higher, setting several all-time highs over the past two weeks.
The FOMC meeting was the event on traders’ minds for the past several weeks. It was interesting to follow the one-minute chart on SPX through the day on Wednesday. It was choppy and wandering sideways until the announcement at 2 pm ET. Then it spiked higher on the 25-basis point reduction in the federal discount rate. Then it started to weaken, and it plunged during the press conference as Powell struggled to explain the reasoning behind their decision for a 25-point reduction rather than a 50-point reduction, considered more appropriate by many economists.
I often trade the SPX Zero DTE options and Wednesday was no exception. One consequence of the discount rate battle was higher than normal implied volatility at the start of the day for the SPX options. And implied volatility did not decrease much even after the announcement. On the other hand, I gained 37% on my zero dte trade in the midst of the chaos.
The basic economic data remain positive, and the bullish nature of the market seems solid. I was most impressed with the 2.4% rise of the high beta S&P 500 stocks this week. Event risk is our main concern at this point. It won’t take much news or even rumors to cause traders to sell to lock in these gains. Stay calm and stick to your trading rules.
