Market Review For February 28, 2014

By Justin Kuepper | Updated September 02, 2014 AAA

Major U.S. indices moved higher this week led by small-caps in the Russell 2000 and lagged by technology stocks in the NASDAQ 100. After a relatively sideways week, stocks edged higher on Friday after February consumer confidence edge higher and Federal Reserve Chair Janet Yellen indicated the bank's strategy for tapering may change if the economy should weaken. Slowing growth in the fourth quarter also left many analysts guessing as to whether the slowdown is weather-related or systemic.

International markets moved largely lower during the week as eurozone joblessness remained high and China's economy showed more cracks in its foundation. Japan's Nikkei 225 fell 0.17%; Germany's DAX 30 was even; and Britain's FTSE 100 fell 0.32%. Conflict in Syria and Ukraine also has the markets on edge, particularly with Russia's recent actions.

The SPDR S&P 500 (ARCA:SPY) ETF rose 1.59% this week as of midday trading on Friday. After rising past its R1 resistance at 183.12 to reach new highs, the index moved towards its R2 resistance at 188.06. Traders should watch for a breakout above this level towards its upper trend line or a move back down to consolidate at R1 resistance and prior highs. Looking at technical indicators, the RSI appears overbought at 66.63 but the MACD remains in a bullish uptrend.

The SPDR Dow Jones Industrial Average (ARCA:DIA) ETF rose 1.60% this week as of midday trading on Friday. After breaking above its R1 resistance at 162.22, the index moved towards its prior highs of about 165.00. Traders should watch for a breakout past its prior highs to R2 resistance at 168.10 or a move back down towards its 50-day moving average at 160.81. Looking at technical indicators, the RSI appears overbought at 64.63 but the MACD remains in a bullish uptrend.

The PowerShares QQQ (NASDAQ:QQQ) ETF rose 0.86% this week as of midday trading on Friday. After breaking out to new highs past its R2 resistance at 90.54, the index is trading in the upper-middle portion of its price channel. Traders should watch for a move higher to the upper trend line or a move back down to consolidate near R1 resistance at 88.23. Looking at technical indicators, the RSI appears overbought at 67.61 but the MACD remains in a bullish uptrend that's slightly losing steam.

The iShares Russell 2000 (NYSE:IWM) ETF rose 2.27% this week as of midday trading on Friday. After moving past its R1 resistance at 116.01, the index is approaching its upper trend line and R2 resistance at 119.87. Traders should watch for a move towards the R2 resistance and upper trend line or a move back down to the R1 resistance to consolidate. Looking at technical indicators, the RSI appears overbought with a 67.23 reading but the MACD remains in a strong bullish uptrend.

Summary

The major U.S. indices moved higher during the week thanks in large part of the Federal Reserve's comments, although traders should be wary of the high RSI readings that could indicate they are overextended. Next week, traders will be watching for a number of economic indicators including personal income data on March 3, jobless claims on March 6, and employment data on March 7. Of course, eyes will also remain on the Federal Reserve for additional signals regarding its tapering efforts.

Charts courtesy of StockCharts.com.

DiscloureAt the time of writing, the author did not own shares of any company mentioned in this article.

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