Four weeks market winning streak ended this week's session. The reason is simple: markets were overextended over a short-term basis and needed to pull back. However, there was more to the story than meets the eye.
For this week's market session, small-cap Russell 2000 index was down 2.9 percent, the Nasdaq Composite drifted lower by 2.6 percent, the S&P 500 was drawn down 1.2 percent, and The Dow Jones Industrial Average was down only 0.2 percent.
What is not mentioned in the mix of market losses is the realization it was the case that the S&P500 gained 1.1 percent for the week ending on Tuesday at 4325. This was just a fraction of the Inner Index Rally 4330, provided some serious resistance, and served as a barrier to follow-up buying strategies.
This week, the Russell 1000, 2000, and 3000 Growth Indexes declined 1.7, 3.1, and 1.8 percent, compared to losses of 1.2, 2.8%, and 1.3 percent on The Russell 1000, 2000, and 3000 Value Indexes, respectively. The Vanguard Mega-Cap Growth ETF (MGF) dropped 2.1 percent.
The market loss across the board in the Growth and Value Indexes underscores this week's wide-based pullback. But, the bulk of the loss occurred on Friday's expiration date for options. The S&P 500 was trading at just 0.1 percent for the week as of Friday.
In this week's performance, eight of eleven S&P 500 market sectors fell, with losses ranging between 0.6 percent in the health care sector and 3.3 percent in the communication services sector. The top performers included the consumer staples sector posting a +1.9 percent gain, and the utilities and the energy sector, with a +1.0 percent posting.
The fragility of meme stocks spilled into the entire stock market as a selling catalyst, with the yield on the Ten-year note measurement of 3 percent.
The gold and silver market sailed lower this week, consolidating the uprise from July's month's lows. The gold metal closed at $1747, down $55 on the week, and the silver metal traded at $19.02, down $1.76 for the same period.
The market over the past few weeks has captivated the attention of investors. Since the low on June 16, we've witnessed markets rise by gaining half of the losses since the start of the calendar year. We continue to see good numbers in the S&P 500 Index, and earnings reports have generally been positive overall.
The media has focused on increased food and energy costs as the cause of the rising inflation, but consumers are still spending. Profits from corporations are stable and surpass expectations by about 4 percent.
This week's most talked-about market news headlines were the delisting of several Chinese companies on the New York Stock Exchange (NYSE) and its impact on North American capital markets. The vital sectors comprised financials, industrials, energy, and telecommunications which Chinese authorities regard as national security interests.
INDEX: STARTED WEEK ENDED WEEK CHANGE %CHANGE YTD%
DJIA: 33761.05 33706.74 -54.31 -0.2 -7.2
Nasdaq: 13047.19 12705.22 -341.97 -2.6 -18.8
S&P 500: 4280.15 4228.48 -51.67 -1.2 -11.3
Russell 2000: 2016.62 1957.35 -59.27 -2.9 -12.8
This article was printed from TradingSig.com