The S&P 500 started the week with a record high but couldn't hold on after hot inflation reports, closing at 4682 on Friday. On Monday the S&P 500 crossed the 4700 mark for the first time after the House passed a $1 trillion infrastructure bill over the weekend. This gives us 64 S&P 500 record closes for the year and could be on pace to beat 1995's record of 77 closing highs. Tuesday snapped the S&P 500s winning streak as Producer Price Index (PPI) numbers showed wholesale prices jumping 8.6% since last October, which was the greatest annual increase in almost 11 years. On Wednesday the market continued to pull back after the Consumer Price Index (CPI) jumped 6.2% annually, which was well above the estimate and the largest annual increase since 1990. Citing inflation concerns, Fridays consumer sentiment in early November dropped to its lowest level in a decade. From a technical perspective, we follow the Bollinger Band Index (BBI) which measures the intensity of overbought and oversold market conditions. For instance, at the March 2020 pandemic lows the S&P 500 BBI increased to 433, i.e. oversold. This week the S&P 500 BBI stood at a tame reading of 56, down from last Fridays 90. The reason we mention this is that even though we have hit new record highs in each of the last four weeks, the market has been steadily consistent as it has marched higher. During those same four weeks, the S&P 500 has not had a daily move of more than 1%, i.e. tame and steadily consistent. While no one can predict the future, the lack of a BBI spike might bode well for the markets as we head into years end. Looking forward to next week, we have the retail sales and housing starts numbers at mid-week. For TSP TIPS, both the C and S funds hit new record highs on Monday and have almost equal Performance Rankings. As such, we will continue with our current allocation and Let the Trend be our Friend.
The S&P 500 started the week with a record high but couldn't hold on after hot inflation reports, closing at 4682 on Friday. On Monday the S&P 500 crossed the 4700 mark for the first time after the House passed a $1 trillion infrastructure bill over the weekend. This gives us 64 S&P 500 record closes for the year and could be on pace to beat 1995's record of 77 closing highs. Tuesday snapped the S&P 500s winning streak as Producer Price Index (PPI) numbers showed wholesale prices jumping 8.6% since last October, which was the greatest annual increase in almost 11 years. On Wednesday the market continued to pull back after the Consumer Price Index (CPI) jumped 6.2% annually, which was well above the estimate and the largest annual increase since 1990. Citing inflation concerns, Fridays consumer sentiment in early November dropped to its lowest level in a decade. From a technical perspective, we follow the Bollinger Band Index (BBI) which measures the intensity of overbought and oversold market conditions. For instance, at the March 2020 pandemic lows the S&P 500 BBI increased to 433, i.e. oversold. This week the S&P 500 BBI stood at a tame reading of 56, down from last Fridays 90. The reason we mention this is that even though we have hit new record highs in each of the last four weeks, the market has been steadily consistent as it has marched higher. During those same four weeks, the S&P 500 has not had a daily move of more than 1%, i.e. tame and steadily consistent. While no one can predict the future, the lack of a BBI spike might bode well for the markets as we head into years end. Looking forward to next week, we have the retail sales and housing starts numbers at mid-week. For TSP TIPS, both the C and S funds hit new record highs on Monday and have almost equal Performance Rankings. As such, we will continue with our current allocation and Let the Trend be our Friend.