Market Notebook

PRICE ACTION:
Equity prices, as measured by ticker SPY, closed lower on the week, while bond prices, as measured by ticker BND, closed higher on the week. 

TECHNICAL ANALYSIS:
SPY price failed to break above weekly resistance despite a valiant effort on Friday. Until resistance is broken, one should likely be skeptical of the ability of SPY to establish a new upward trend.

BND moved higher again last week and appears established in an upward trend.

SENTIMENT:
Market participants appeared optimistic again during the last week; however, participants seemed to be lacking conviction that the low price in SPY has been printed for this cycle. In other words, investors want this market to go higher, but they are unsure it will. Such sentiment could lead to price consolidation.

ECONOMY AND FUNDAMENTALS:
Economic indicators within the Market Notebook remain mixed. Real economic activity will likely slow over the next few months as the Federal Reserve continues to act to contain inflationary pressures.

The continued weakening of The Conference Board’s Leading Economic Index in December suggests recessionary pressures are building in the U.S. economy.

NEXT WEEK:
Continued cautious optimism with a keen eye toward equity price weekly resistance levels is the theme for the coming week.

It seems prudent to reiterate that the October lows in BND could be the cycle lows, and it may be prudent to adjust portfolio bond holdings.

All the best during the week ahead!

Disclaimer: Nothing in this discussion should be considered investment advice. The content of this discussion is strictly my personal opinion and subject to change at a moment’s notice. Investment advice can only be provided to you by your investment professional and not by a general market discussion such as this one. If you wish to speak with an investment advisor, contact us. We can probably help.