Markets registered a tough week with the Nasdaq “outperforming” the S&P 500, as it fell 1.6%, compared with the S&P 500’s 2.1% decline. The Nasdaq still maintains a better than 3 percentage point lead on a YTD basis over the S&P 500, with a 19.3% advance. The Nasdaq has had rougher weeks this year, with 2% or more declines the weeks ending 4/5, 4/19/ 6/21. Technically it still looks the best as well, as it still is well above its 50 day SMA. It seems for the moment to be finding bids at the round 3600 handle, although Fridays response to Thursday 63 handle loss was anything but inspiring. The S&P 500 did find support at its 50 day SMA Friday (the D0w lost its 50 day with Thursdays 225 point slide), although it looks rather tenuous. With the lack of leading stocks breaking out, or even setting up bullish looking bases, we took money off the table Friday. A look on the S&P 500’s weekly chart shows a long time since its last trip to the 200 day SMA. It did so as recently as June through August of 2012, and again from late November to the first trading day of this year. Could it be headed for another trip in the near term, that lies 100 handles below at 1550? I would say the odds are 50/50. With the S&P 500 3% off its recent high, a 100 point decline over the next few months would put it roughly at the 10% correction threshold.
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