On Wednesday the popular averages rose steadily throughout the session to close to the upside. The minutes of the early May FOMC meeting indicate that hikes in their interest rate targets will be gradual but some are likely next month. Trump indicated concern about car imports and is considering stiff tariffs. New home sales slowed a bit in April. The Markit manufacturing and services outlooks both remain optimistic. Meanwhile, the price of crude oil rose while that for gold fell on Wednesday.
Above is my 3-month chart of the S&P 500 exchange traded fund (SPY). Its 200-day moving average essentially provided support in early February, late March-early April, late April and early May. During the intermediate periods the SPY’s 50-day moving average was overcome several times before the price was thrust back below.
The successful testing of the SPY’s 200-day MA in February, March, April and May indicated it was going through more of a grinding correction than a collapse. The strong upthrust from it on May 4 was encouraging enough to turn my weekly outlook arrow green. The jump above its 50-day MA on May 9 repainted the other arrows. The continuation kept them that way. The bobbing around in recent days has not been enough to cause me concern.
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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.