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On Friday the popular averages slipped back to the downside. The March employment report indicated a great reduction in non-farm payrolls, and a large jump upward in the unemployment rate. This as the coroanvirus pandemic continues without a clear end in sight. Economic concerns due to the cornavirus are business shutdowns and job losses, along with the effects on consumer and business spending.

  Above is my three-month chart for the S&P 500 ETF (SPY). A Santa Claus rally kept going into the new year. It seemed encouraging that the late January dip was halted by the 50-day moving average. On February 19 the SPY attained all-time intraday and closing highs.

   Then came the coronavirus inspired collapse beneath the 50-day MA on February 24 with continuation leading to penetration of the 200-day MA. During the first week of March the SPY gyrated dramatically above and below that moving average, before resuming the steep plunge amid heavy trading volume and a soaring volatility index (VIX). Then came a sharp rebound rally during the middle three days of last week before a bumpy stall.

   The SPY’s 50-day MA continues to slip beneath its 200-day MA. Not a good sign. The SPY may have to eventually retest the low of March 23. Nevertheless, bounces can occur as was the case on Thursday.

 

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Market Outlook

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© Curt Renz

  Stock Market Update

Updated following  each market day

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DISCLAIMER: Our commentaries are provided as general information and not investment recommendations. You are responsible for your own investment decisions. Our opinions are based on historical research and data believed to be reliable. There is no guarantee that results will be profitable. We are not responsible for errors or omissions. We may hold positions in vehicles that are mentioned.

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