Investors felt uneasy on Friday the 13th. New data shows inflation is still high, the U.S. economy is slowing, oil prices are rising, and global tensions remain. All of this made the stock market end the week with caution.
Stocks, bonds and gold all dropped. The S&P 500, Nasdaq Composite and Dow Jones Industrial Average closed near their daily lows. The S&P 500 is close to its 200‑day simple moving average, the Nasdaq is below it, and the Dow sits just a little above.
Fewer stocks are participating. Less than half of the stocks are trading above key moving averages, showing a narrowing market breadth.
The Bullish Percent Index for the major indexes also fell below 50%. The transportation sector’s index is around 30%, down from its recent strength. Supply‑chain problems and higher costs are hurting these stocks.
The pullback has been orderly. There was no panic selling, but also no surge of new buying. Many investors are staying in cash, waiting for clearer signals.
Keep an eye on sentiment gauges. The CBOE Volatility Index (VIX) is trading between 20 and 30 – higher than calm periods but not at extreme stress levels. The CBOE Options Equity Put/Call Ratio sits above 0.75, which is still below its most extreme points.
The National Association of Active Investment Managers (NAAIM) Exposure Index shows professional managers are cutting their exposure to U.S. equities.
This is not a good moment to chase new long positions. Instead, focus on protecting your portfolio.
Spend a few minutes reviewing the short‑, medium‑ and long‑term charts of your holdings. Check where they sit relative to moving averages or support zones. Are your position sizes comfortable? Would trimming or rebalancing help?
Adjust your asset allocation based on market trends. Reduce exposure when trends are weak, and consider adding back when they start to strengthen.
Use the weekend to update your charts and outline a plan for the upcoming week. Unexpected headlines can make the market volatile at the start of trading. Being prepared lets you act calmly rather than react emotionally.
Have a peaceful weekend.
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