Choppy trading!

Stock indexes closed mainly lower this week with the exception of the Russell 2000. For the week the Dow (chart), S&P 500 (chart), and the Nasdaq (chart) all finished modestly lower, the one bright spot however was the Russell 2000 (chart), which managed to eke out a slight gain on the week. We also experienced some pretty wild intraday swings this week and saw the VIX spike almost 10%. When market volatility increases, a spike in the VIX is to be expected. However, this kind of move in the VIX could potentially be a indication of a bottoming out process.

What’s more important to me is that the key indexes remained above their significant support zones, mainly their 200-day moving averages. As we approach second quarter earnings reporting season, and if the markets can hold true to its current form, we just may be putting in a bottom here. Earnings reporting season is expected to provide the next significant market catalyst and hopefully will put an end to the two month market sell-off we have been in.

Now a lot can change in a short period of time and should the key indexes breakdown through their 200-day and stay below it, then an entirely new discussion would need to take place. Next week is the last trading week of the second quarter and I am expecting yet another volatile week. Good luck to all.

Have a great weekend 🙂