Weighing the Week Ahead: Should Investors Fear A Market Top?

The calendar is modest, with the big reports all hitting last week. Investors will never have more current information on the economy, the Fed, corporate earnings, and various risks than they do right now. It is difficult to guess what the punditry will do when given an open slate. We should be asking:

Should we fear a market top?

Last Week Recap

In last week’s installment of WTWA, I took note of the avalanche of relevant data, suggesting that it was time for some synthesis and analysis. I didn’t expect any help from the pundits, who analyzed piecemeal as expected. I hope that readers did better by using my suggested framework. More about that below.

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, who packs a lot of relevant information into the weekly chart without sacrificing clarity.

In another quiet week, the market was virtually unchanged. The trading range was only 1.8%. The volatility seemed higher to some, because of the two-day decline after the Fed meeting. As always, our indicator snapshot in the quant section below summarizes volatility and the VIX index in various time frames.


Mrs. OldProf wishes everyone a happy Star Wars Day (May 4th, for those who need a hint). RIP Peter Mayhew.

The News

Each week I break down events into good and bad. For our purposes, “good” has two components. The news must be market friendly and better than expectations. I avoid using my personal preferences in evaluating news – and you should, too!

When relevant, I include expectations (E) and the prior reading (P).

New Deal Democrat’s high frequency indicators are an important part of our regular research. In his post this week, Further Trend Toward Positive Numbers Could Signal A Renewed Boom, he reports that indicators in all time frames have become more positive. NDD remains skeptical and is watching indicators closely.