Weekly Market Update 5/11/2015
May 4 – May 8, 2015 – More of the Same
We seem to be continuing the pattern of the past several weeks with lackluster weekly movement with a couple of exciting days. After make a fake to the downside Tuesday due to a poor trade report, we bounced back with a 28 point move upward on the S&P 500 today, attributed to a strong jobs report. This was a strong move with volume increasing from around 300 million shares traded each day earlier in the week, to 524 million shares traded today.
The official unemployment report is now 5.5%. That is the bright side. The flip side is that we are now in the range of employment at which the Fed has hinted it may begin to tighten monetary policy. We will see.
Without any action from the Fed, the 30 year Treasury yield has increased from 2.25% at the end of January to 2.98% Wednesday. That is a bump of 32%, and holders of long bonds are taking a pretty good hit.
There are many moving parts to this market, and we are at levels that warrant caution, but not fear. I like to compare it to driving at night on an unfamiliar road. If it begins to rain it makes more sense to slow down and turn on the wipers than to speed up to get out of the weather.
We remain in the tight trading range that we have been in for the past few months with support holding at 1810, and resistance at the 2120 level.
We have no reason to sell any of our positions at this point, and our indicators are not showing any reason to be other than prudent now. We will continue to monitor our accounts, and make any changes necessary when appropriate.
I hope everyone had to opportunity to observe Mother’s Day with family and friends.
See you next week.
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