The S&P 500 was down for a second straight turbulent week marked by two days of greater than one percent losses, before closing at 4117 on Friday. We started out with two days of gains, but that turned around on Wednesday. While we did get a new House Speaker, Mega Cap earnings were not meeting expectations and the uncertainty of expanding wars in the Mid-East turned the S&P 500 south with a daily loss of greater than one percent. However, right after the close Microsoft earnings beat expectations and MSFT jumped over 4% in after-hours trading, giving us a glimmer of hope for Thursday. Well that glimmer faded throughout Thursday and the S&P 500 made it back-to-back days of greater than one percent losses with Microsoft giving back Wednesday's after-hour gains plus more. Thursday evening also brought us news of the U.S. hitting targets in Syria, bumping up the uncertainty meter. Friday looked optimistic until noon but it then reversed to the downside closing near session lows and off more than two percent for the week. From a technical perspective, in last weeks update we mentioned that on Friday, 20 October, the S&P 500 closed below its 200 day Moving Average (MA) for the first time since 17 March, with that gap between the two being only 9 points. This Friday, 27 October, that gap has now expanded to a whopping 133 points. Another S&P 500 sell signal this week was that its 20 day Exponential MA crossed below its 20 day Simple MA. When you add it all together, it now has a weak composite score of 15 of 100, and the next support level (as mentioned last week) stands at the 4 May intraday low of 4048. Next week the big news will be the mid-week Fed interest rate decision, which will probably drive the markets the second half of the week. For TSP TIPS the C fund has the same 15 composite score as the S&P 500, and both the S and I funds have scores of 0. As such, we are recommending no changes to our current investment mix.
The S&P 500 was down for a second straight turbulent week marked by two days of greater than one percent losses, before closing at 4117 on Friday. We started out with two days of gains, but that turned around on Wednesday. While we did get a new House Speaker, Mega Cap earnings were not meeting expectations and the uncertainty of expanding wars in the Mid-East turned the S&P 500 south with a daily loss of greater than one percent. However, right after the close Microsoft earnings beat expectations and MSFT jumped over 4% in after-hours trading, giving us a glimmer of hope for Thursday. Well that glimmer faded throughout Thursday and the S&P 500 made it back-to-back days of greater than one percent losses with Microsoft giving back Wednesday's after-hour gains plus more. Thursday evening also brought us news of the U.S. hitting targets in Syria, bumping up the uncertainty meter. Friday looked optimistic until noon but it then reversed to the downside closing near session lows and off more than two percent for the week. From a technical perspective, in last weeks update we mentioned that on Friday, 20 October, the S&P 500 closed below its 200 day Moving Average (MA) for the first time since 17 March, with that gap between the two being only 9 points. This Friday, 27 October, that gap has now expanded to a whopping 133 points. Another S&P 500 sell signal this week was that its 20 day Exponential MA crossed below its 20 day Simple MA. When you add it all together, it now has a weak composite score of 15 of 100, and the next support level (as mentioned last week) stands at the 4 May intraday low of 4048. Next week the big news will be the mid-week Fed interest rate decision, which will probably drive the markets the second half of the week. For TSP TIPS the C fund has the same 15 composite score as the S&P 500, and both the S and I funds have scores of 0. As such, we are recommending no changes to our current investment mix.