The Standard and Poors 500 index (SPX) closed today at 7580, up 16 points for a gain of 0.2%. SPX opened this shortened week at 7511, setting up a weekly gain of 0.9%. Trading volume has run at the 50 dma nearly all month and spiked higher today. This may be based on Trump’s announcements concerning the negotiations with Iran but I am unsure. 

VIX, the volatility index for the S&P 500 options, opened the week at 16.9% and closed today at 15.3%, down 9.5%.  Given all of the news focused on the Middle East, this steady decline in implied volatility is telling. The markets are not concerned.

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 today at 150.0, up 2.1 points or +1.4%. SPHB opened the week at 144.7, setting up a weekly gain of 3.7%. Trading volume spiked higher on Wednesday, but that was an exception. SPHB’s trading volume declined significantly the rest of the week.

The NASDAQ Composite index closed today at 26,973, up 55 points or +0.2%. NASDAQ opened the week at 26,590, setting up a weekly gain of 1.4%. Trading volume spiked above average today but continues to run at or below the 50 dma. 

The broad stock market is in a very strong bullish trend. The S&P 500 stocks are up 18.5% since March 31st. This seems somewhat surprising when one watches the evening news with so much political unrest and widely contrasting views on the war in Iran. Note two items in recent economic data: Durable goods orders are up nearly 8% in April and the Chicago PMI jumped from 49.2 to 62.7. The Chicago PMI is a survey of the purchasing managers in large Fortune 500 corporations. That is the foundation of this strong stock market trend. Large domestic capital investments have ebnn announced and are breaking ground, ranging from AI to industrial goods. Oil prices will quickly decline after the Iran war is ended. Lower oil prices will turn economic metrics higher and reduce the inflation numbers.

The primary issue facing investors is the price volatility in the markets. It is easy to be whipsawed in and out of solid stocks. I have been stopped out of several positions and then found myself reentering those same stocks with a few days.

If you have any questions or concerns, please contact me. I will be happy to help in any way I can.