The Standard and Poors 500 index (SPX) essentially wandered sideways this week, but it held up for a positive gain for May with a close at 5912, essentially unchanged for the day, but up 1.0% for the holiday shortened week. Trading volume has tracked below the 50 dma all month, but it spiked much higher today.

VIX, the volatility index for the S&P 500 options, steadily declined this week, opening at 20.6% and closing today at 18.6%. This level of volatility isn’t too extreme, but it isn’t perfectly calm either.

I track the Russell 2000 index with the IWM ETF, which has basically traded sideways this week, closing today at 205.1, down 0.5% for the day and down 0.2% for the week. IWM’s trading volume remained below average this week and barely touched its 50 dma today. IWM is still trading well below its 200 dma.

The NASDAQ Composite index closed today at 19,114, down 62 points or 
-0.3%. NASDAQ opened the week at 19,014, setting a weekly gain of 0.5%. NASDAQ’s trading volume ran at or below the 50 dma this week, except for popping higher yesterday.

The S&P 500 stocks gave back their previous gains last week and essentially traded sideways this week. Today’s trading was significant in that SPX hit a low intraday but quickly recovered and closed very close to Thursday’s close. That was a bullish sign for the market. Trading volume in the S&P 500 stocks spiked strongly higher today, another bullish sign.

The prices of the S&P 500 index, the NASDAQ Composite and the Russell 2000 index are now all trading above the 50 dma. That is confirmation of a bullish trend following the recent correction. But none of these broad market indices have returned to a bullish configuration of the 50 dma running above the 200 dma. This reflects the serious losses taken during the correction.

IBD raised its recommended stock market exposure to 80-100% on 5/13 and remains there today.

The candlestick patterns of the broad market indices today are interesting. IWM displayed the classic doji which may suggest a trend change in either direction. The traditional hanging man, seen in SPX and NASDAQ, often suggests a bearish reversal of an uptrend. But today’s trading action was interesting, opening lower this morning, hitting a significant low midday and then trading higher to close almost exactly at Thursday’s close. I believe this pattern suggests that traders saw the intraday low as a bargain and strong buying resulted in a much higher close.

I have continued to enter new trades, but I am cautious. Our AAPL diagonal call spread ended badly but our TSLA iron condor is proceeding profitably. All of my trades in the Conservative Income trading service are profitable and our Flying With The Condor™ positions are positive. Our SPX Zero DTE Trading positions have been profitable this week and that service is up 59% for 2025. Volatility declined steadily this week but it remains high enough to command respect. Use a high hurdle rate and tight stops for prospective trades. Large institutional traders are quick to hit the sell button and we have tariff news daily.