The Week That Was April 25th-29th

by Geoff Garbacz | 05/02/2016 12:14 AM
The Week That Was April 25th-29th

The week that was saw very choppy action and close lower for the week. Monday was lower then stocks were higher on Tuesday and Wednesday. Thursday and Friday saw stocks close lower. Friday was lower but reversed 13 points from the low on the S&P 500. That said, the month was mixed.

The S&P 500 rose 0.27%. Meanwhile the Russell 2000 rose 1.51%. High yield bonds took the top spot in fixed income rising 2.64%.

Winners for the week were utilities, energy and materials. Healthcare and technology were lower for the week.

For the week stock indexes were lower across the board. The S&P 500 fell -1.26%. The Russell 2000 fell -1.38%.

Each week I track the spread between stocks with a strong technical rank and those with a poor technical rank. Stocks with strong relative strength rose on average fell -1.23% and those with a weak relative strength fell -1.00%. The conclusion is that investors are selling recent winners. Long short funds took it on the chin a week ago but this past week was a better week for them.

Intraday action was all over the place this past week. Our confidence score on the intraday action was 52% after a strong week last week at 59%. The range is typically between 10% and 90%.

Most sectors struggled for the week. The worst sectors were healthcare and technology as noted. For the month several sectors were in the red including consumer services and technology. For the past three months, no sectors are in the red.

The big worry for this week is whether profit taking will continue as we head into the first week of May.

We get zero fedspeak this week. Economic releases are modest this week. Earnings continue to be heavy. Though for the week things remain modest.

Since the FOMC announcement in March, the dollar moved to a new low this past week.

Treasuries led by TLT rose 0.79%. Corporates led by LQD rose 0.56% while high yield led by HYG rose 0.54%.

Emerging markets (EEM) fell by -0.43% last week. Meanwhile Europe (EFA) fell by -1.86%. China (FXI) also struggled dropping -2.39% letting it capture the top spot in the biggest drop for the week.

Conclusion: Investors took some profits this week and prevented a strong april. Failure to get back above 2100 could bring 2050 into play on the S&P 500. The market may just need a time correction for a few weeks.

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