Weighing the Week Ahead: Is there a New Message from the Markets?

We have a light economic calendar and a short week. We’ll get earnings reports from another 10% of S&P 500 companies. With plenty of time and little fresh information, I expect plenty of pure speculation about the state of the market. This commentary will have a broad theme, with pundits asking:

Is there a new message from the markets?

Last Week Recap

In my last edition of WTWA I took note of the growing emphasis on technical indicators, even for long-term investors, asking whether the 200-day moving average should be considered. As often happens these days the stories focused on political developments and the surprise Amazon (AMZN) decision not to build a second headquarters in New York. The S&P climbed above the 200-day MA on Friday without much fanfare. Next problem, please?

The Story in One Chart

I always start my personal review of the week by looking at a great chart. This week I am featuring Jill Mislinski. She includes a lot of relevant information in a single picture – worth more than a thousand words. Read the full post for more great charts and background analysis.


Stocks gained 2.5% on the week and the trading range was only a touch wider, 2.66%. You can see volatility comparisons in our Quant Corner (below).

For some additional perspective, here is the chart of the economic expansion.

This chart makes it clear that the rally, while long and strong overall, include major pauses and a few drawdowns along the way.

Personal Note

I am off duty next weekend. I’ll try to post an indicator update, but no promises. I asked Mrs. OldProf if she wanted to pinch hit for me, but she noted that Warren Buffett’s annual letter would be released next Saturday. She didn’t want to compete with that. As always, this will be great reading for investors.