ChartAdvisor for March 21 2014

By Justin Kuepper | September 02, 2014 AAA

Major U.S. indices moved largely higher this week led by technology stocks and lagged by small-cap stocks. Despite the Federal Reserve’s somewhat unexpected comments that it would raise interest rates if the unemployment rate fell to 6.5%, the markets moved largely higher following a 0.5% increase in the Conference Board’s leading indicator index that suggested overall economic improvement. With the S&P 500 still trading at an above-average multiple, traders will continue to be cautious on signs of a recovery over the coming weeks.

International markets were somewhat mixed this week. Japan’s Nikkei 225 fell 0.45%; Britain’s FTSE 100 rose 0.22%; and Germany’s DAX 30 rose 2.65%. In Asia, Japan reported higher factory output but investors remain concerned about the impact of new taxes on consumer spending. In Europe, Eurozone inflation stabilized in the ECB’s “danger zone” which makes it less likely regulators will further loosen monetary policy at its monthly meeting next week.

The SPDR S&P 500 (ARCA:SPY) ETF rose 1.67% this week as of Thursday’s close. After moving off of its highs, the index rebounded towards its R1 resistance at 191.06 in a choppy week. Traders should watch for a move to these levels on the upside or a move down to the 50-day moving average at 183.28 on the downside. Looking at technical indicators, the RSI appears neutral at 59.45, but the MACD recently experienced a bearish crossover that suggests a downtrend.

The SPDR S&P 500 (ARCA:SPY) ETF rose 1.67% this week as of Thursday’s close.

The SPDR Dow Jones Industrial Average (ARCA:DIA) ETF rose 1.64% this week as of Thursday’s close. After moving lower earlier this month, the index rebounded from its 50-day moving average at 160.87 towards its upper trend line. Traders should watch for a move higher towards R1 resistance at 166.96 or a move lower towards its pivot point at 159.83. Looking at technical indicators, the RSI appears neutral at 55.95, but the MACD remains in a bearish downtrend.

The SPDR Dow Jones Industrial Average (ARCA:DIA) ETF rose 1.64% this week as of Thursday’s close.

The PowerShares QQQ (Nasdaq:QQQ) ETF rose 1.83% this week as of Thursday’s close. After moving lower earlier this month, the index rebounded towards the middle of its long-term price channel this week. Traders should watch for a move towards R1 resistance at 93.07 or a move lower towards its pivot point and 50-day moving average at 88.32. Looking at technical indicators, the RSI appears neutral at 55.63, but the MACD remains in a bearish downtrend.

The PowerShares QQQ (Nasdaq:QQQ) ETF rose 1.83% this week as of Thursday’s close.

The iShares Russell 2000 (NYSE:IWM) ETF rose 1.37% this week as of Thursday’s close. After moving off its highs this month, the index recovered towards the middle of its price channel this week. Traders should watch for a move towards R1 resistance at 121.73 or a move lower to its 50-day moving average at around 115.34. Looking at technical indicators, the RSI appears relatively neutral at 59.52, but the MACD has remained in a bearish downtrend over the past month.

The iShares Russell 2000 (NYSE:IWM) ETF rose 1.37% this week as of Thursday’s close.

Summary

The major U.S. indices moved higher this week in a relatively choppy session. With RSI levels sitting well within neutral territory, traders appear relatively undecided about the market’s future direction. Next week, traders will be watching a number of key economic indicators including new home sales on March 25th, durable goods on March 26th, jobless claims and GDP on March 27th, and personal income on March 28th. Of course, any additional comments out of the Federal Reserve will also be closely monitored given the developments over the past week.

Charts courtesy of StockCharts.com.

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

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