This wasn’t a banner week in the market and the losses accelerated Friday. The Standard and Poors index (SPX) closed at 4460, down 35 points or 0.8%. The holiday shortened week posted a dismal 1.7% decline. Trading volume rose slightly, but never touched the 50-day moving average (dma) this week.

VIX, the volatility index for the S&P 500 options, opened Tuesday at 17% and closed Friday at 21%. The pattern of a mini-correction roughly every month continues.

I have plotted the prices of the IWM ETF below to track the Russell 2000 index. The owners of Russell have priced everyone out of Russell 2000 index and option data. That is why I plot the IWM prices. IWM has been extremely choppy for the past six months and declined once again this week, closing Friday at 221.62 for a 1% decline on Friday and a 2.7% decline for the week.

The NASDAQ Composite index set another high on Tuesday but declined the rest of the week, closing Friday at 15115, down 0.9% on the day and down 1.7% for the week. But NASDAQ’s trading volume surprised me, finally breaking its 50 dma on Friday (first above average break since July 20th).

I have previously noted the eight 
mini-corrections of 2-6% we have experienced this year. I guess we were overdue. Friday’s close on the S&P 500 marks a pullback of 1.7%. Previous downturns have ranged from 2% to 6%, only last a few days and then bounce back in a classic V pattern. Will traders come in to buy the dip one more time?

Fears of runaway inflation continue to haunt the market. However, Friday’s strong pullback appeared to be triggered by a court ruling that went against Apple and, by extension, may hurt Google as well. Will that be forgotten on Monday? This week just reinforces my nervous attitude toward the market this year. These mini-corrections of 2-3% plague conservative traders more than most because those stop losses are tighter. It is the basic nature of conservative trades – small potential returns with tight break-evens. I didn’t close as many positions in light of market weakness this week. I may regret that next week.