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.