Key Points
- The S&P 500 Remains Between Support and Resistance after a Volatile Week
- Small Caps Hold Support, Looking for a Relative Breakout
- The NASDAQ Composite Continues Lag
- Ten-Year Note Does Not See a Haven Bid
- Global Dow Gives Up Some Relative Gains
U.S. Equities
The S&P 500 turned in a volatile week only to end up close to where it started. Bears tried to push the index through key support at the 4,200 level but were not able to hold onto the ball. The bulls took advantage of the fumble and stormed back to about midfield as the week ended. For all the drama on the world stage, the index remains below the 10 and 40-week moving averages and stuck between support and resistance near 4,550.
The 14-week RSI is doing all it can to hold the lower bound of a bullish regime. However, the series of lower highs indicates that upside momentum has waned.
The S&P Small Cap 600 closed higher on the week after rebounding from support. The index remains below the declining 10 and 40-week moving average, contained in the consolidation that has been in place for a year. The 14-week RSI is holding in a bullish regime and has been moving higher over the past week.
We have highlighted improvements in the relative trend for Small Caps over the past few weeks. The ratio is pushing on resistance, and a break would set the stage for outperformance.
The NASDAQ Composite Index completes the trifecta of major U.S. averages that tested and held an important support level last week. As with the other two, however, it remains in the same consolidation zone that has been in place for many months. The index is also below the 10 and 40-week moving averages. Unlike its counterparts, the NASDAQ Composite has a weak momentum structure with the 14-week RSI below 40.
The relative trend also remains weak, trading below resistance.
U.S. Fixed Income
The 10-Year Note closed lower on the week despite the major geopolitical concerns that have gripped the narrative for the time being. The Note remains below the declining 10 and 40-week moving averages and broken support.
At the same time, the yield continues to hold above the 1.75% breakout level.
Global Equities
The Global Dow, which has been holding up better than its U.S. peers, fell last week and is now in the process of testing support. The index is trapped between the 10 and 40-week moving averages while the 14-week RSI trades in the middle of the range.
The relative trend has run into resistance and is being turned away for the time being. More time is needed for a breakout to take hold.
Take-Aways
While there has been no lack of geopolitical events with the potential to move markets, the major U.S. averages all managed to hold key support levels as they closed the week in the same ranges that have marked trading for the past several months. Treasuries in the U.S. also remained under pressure and did not see much in the way of haven buying. Outside the U.S., the Global Dow also held support but did weaken on a relative basis.
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