The US stock markets closed out a strong quarter on a slightlydown note. The S&P 500 is up 5% for the year, and remains above the primary moving averages. Very impressive; this market simply refuses to roll over, even though it sure looks like it’s running on fumes; today’s action saw selling into the close.
With the S&P 50 day moving average pretty much horizontal, and the three highest volume days in the last ten closing down, technical indicators still look weak. The bulls couldn’t even pull off a good window dressing rally, as the Dow 30 spent the entire day below yesterday’s close, while the broader indexes did manage a brief mid-day surge before bowing out. Small caps really slumped into the close, an ominous sign since they have been leading the herd.
Let’s see how the next few days set the tone for Q2. Treasury bonds, oil and gold were all up while the US Dollar pulled back a little more. It’s pretty well established that the risk on/risk off paradigm of the last two years no longer prevails, and new inter-market correlations have emerged.