The major U.S. indexes were mixed over the past week after large employment gains. According to the Bureau of Labor Statistics, U.S. job growth rebounded sharply in April with 211,000 jobs added following a measly 79,000 gain in March. The headline unemployment rate fell to a 1-year low of 4.4% with substantial gains in leisure and hospitality, healthcare, and social assistance, as well as business and professional services payrolls. The gains support the notion that the 0.7% first quarter GDP growth was merely a transitory issue.

International markets were mixed over the past week. Japan’s Nikkei 225 rose 4.43%; Germany’s DAX 30 rose 5.55%; and, Britain’s FTSE 100 rose 2.47%. In Europe, equity indexes moved largely higher as France wraps up its presidential election this weekend with the centrist Emmanuel Macron leading the polls. In Asia, the risk of conflict in North Korea appears to have decreased, and Japanese equities recovered a lot of lost ground, although some risk remains and investors remain cautious in the region.

The S&P 500 SPDR (ARCA: SPY) rose 0.68% over the past week. After trending below last month’s R1 resistance levels, the index moved marginally higher toward its new R1 resistance level at $240.90. Traders should watch for a breakout from these levels toward R2 resistance at $243.73 or a move lower to its pivot point at $236.71. Looking at technical indicators, the RSI is getting lofty at 65.70, while the MACD remains in a bullish uptrend.

The Dow Jones Industrial Average SPDR (ARCA: DIA) rose 0.33% over the past week. After breaking out from its descending triangle chart pattern, the stock has trended sideways over the past couple of weeks. Traders should watch for a breakout to re-test its prior highs near R1 resistance at $211.85 or a move lower to its pivot point and 50-day moving average near $207.39. Looking at technical indicators, the RSI appears lofty at 63.68, but the MACD remains in a bullish uptrend dating back to late-April.

The PowerShares QQQ Trust (NASDAQ: QQQ) rose 1.13% over the past week, making it the best performing major index. After breaking out from its price channel, the index continued to make gains toward R1 resistance at $138.09. Traders should watch for a breakout from these levels toward R2 resistance at $140.20 or a move lower to its trend line support at around $135.75. Looking at technical indicators, the RSI appears massively overbought at 77.31, but the MACD shows a continuation in the bullish reversal dating back to late-April.

The iShares Russell 2000 Index ETF (ARCA: IWM) fell 0.05% over the past week making it the worst performing major index. After briefly hitting R1 resistance at $142.70, the index moved lower to the middle of its price channel and the pivot point at $138.18. Traders should watch for a move higher to re-test R1 resistance or a move lower to the lower trend line and S1 support at around $134.54. Looking at technical indicators, the RSI appears neutral at 55.36, but the MACD could see a near-term bearish crossover.

The Bottom Line

The major U.S. indexes were mixed over the past week with small-caps underperforming and technology stocks outperforming. Next week, traders will be watching several key economic indicators including jobless claims on May 11 and retail sales and consumer sentiment data on May 12. Investors will also be closely watching the French elections for any upset where the nationalist Marine Le Pen might secure a victory and potentially destabilize the euro area.

Note: Charts courtesy of StockCharts.com. As of the time of writing, the author had no holdings in the securities mentioned.

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