Stocks struggled last week as Covid cases in the U.S. spiked higher. So where does the market stand today?
The Covid-19 news that seemed to move the markets last week were the record daily cases and some reopening plans being reversed in Texas, Florida, and California. But as stocks struggled, high quality bonds and gold did buffer some of that downside. So, diversification continues to work in the second quarter.
Looking at the S&P 500 and this week is set up to be an interesting one. Outside of 4 days in the beginning of June, the S&P 500 has been in a 2965 to 3155 trading range since the middle of May. Not only that, but the S&P 500 closed on Friday right below its 200-day moving average which is a key technical indicator that gets followed closely. So, for the week ahead, does the S&P 500 bounce off of its 200-day moving average or does it test that 2965 support level.
If the S&P 500 does go back and test that support level with the VIX moving above 35, then things can certainty get a lot more interesting.
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