Weekly Market Summary
U.S. stocks limped across the finish line as the first quarter of 2017 ended. Growing uncertainty over whether the Trump administration will be able to implement the pro-business economic agenda it promised during the campaign sapped the momentum of the market. However, volatility remained low. The CBOE Volatility Index, known as Wall Street’s “fear gauge,” posted its second-lowest quarterly average on record, according to the WSJ Market Data Group.
The Dow Jones Industrial Average (DJIA) ticked upward 0.3% this week to close at 20,663.22. Monday’s decline marked the blue-chip index’s eighth losing session in a row, its longest losing streak in nearly six years. For March, the index shed 0.7%, its first monthly decline since October. However, for the first quarter, the index added 4.6%. This was the sixth consecutive quarterly gain for the index, its longest quarterly winning streak since 2006. On Monday, the index tested its 50-day moving average, which held. Moving forward, we look to the moving average, currently at 20,532.55, as near-term support.
The S&P 500 Index (SPX) ended the week at 2,362.72 after gaining 0.8%. The large-cap index ticked downward 0.04% for March but posted its best quarterly gain since 2015 after climbing 5.5%. The index also tested its 50-day moving average on Monday but managed to bounce off it. We look to the average, currently at 2,339.43, for downside support. Below it is round-number support at 2,300.
This week, eight of the 10 S&P Sector SPDRs posted gains. Utilities (XLU) reversed their gains from last week, losing 1.1%. Consumer staples (XLP) also slipped 0.2% for the week. Energy (XLE) posted a 2.0% weekly gain as oil prices rebounded. For the month, however, only three of the 10 Sector SPDRs were up. Financials (XLF) fell 3.3% to lag all sectors, as uncertainty grows about tax reform and deregulation, while Technology (XLK) and Consumer Discretionary (XLY) both gained 1.8% for the month. And for the first quarter, Energy was the only Sector SPDR to fall, sliding 7.2%. The Technology sector was the quarterly leader, jumping 10.2%.
The broad market Wilshire 5000 (W5000) gained 1% this week to close at 24,624.72. For March, the index eked out a 0.1% gain and for the quarter it climbed 5.1%. The index fell below its 50-day moving average and closed below it on Monday but rebounded on Tuesday and rose strongly off it. We still view the moving average, currently at 24,399.90 as near-term support, followed by round-number support at 24,000.
The tech-heavy Nasdaq Composite (COMP) ended the week up 0.8% to 5,911.74. The index added 1.5% in March while its 9.8% first-quarter gain was its best since 2013. On Monday, the index tested its 50-day moving average but moved away from it to the upside. We view the average, currently at 5,786.67, as initial downside support, followed by round-number support at 5,700.
The Russell 2000 (RUT) index of smaller stocks outperformed the other major U.S. indexes this week, climbing 2.3% to 1,385.92. For the quarter, the index ticked downward 0.1% while gaining 2.1% in the first quarter. The index tested its 1,340-support level on Monday before rebounding strongly to close above its 50-day moving average on Friday. We are skeptical of the moving average, which is currently at 1,376.96, to provide near-term support. We must wait and see whether it holds in the coming days. However, we are gaining confidence in the support level around 1,340, which has been tested and held on multiple occasions in the last couple of weeks.
The CBOE Volatility Index (VIX) slipped 4.6% this week to 12.27. For the month it lost 4.3% while dropping 11.9% in the first quarter.
Computerized Investing Market Dashboard Indicators
This week, one of the CI Market Dashboard Indicators triggered a new bullish signal, shifting from bearish. However, none of the Dashboard indicators triggered confirming bearish or bullish signals this week.
To see the current signals of all the dashboard indicators, visit the CI Market Dashboard.
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