ChartAdvisor for May 2 2014

By Justin Kuepper | Updated September 02, 2014 AAA

Major U.S. indices moved largely higher over the past week, as of Thursday’s close, led by technology stocks and lagged by small-cap stocks. While the U.S. economy grew just 0.1% during the first quarter, the Federal Reserve attributed the lackluster performance to a harsh winter and cut its economic stimulus program, saying that the recovery was now sufficiently back on track. Household spending and other indicators were on the rise, although unemployment remains high.

International markets moved largely higher across the board. Japan’s Nikkei 225 rose 1.27%; Britain’s FTSE 100 rose 1.84%; and the Euro STOXX 50 rose 1.62% as of Thursday’s close. In Europe, traders remain concerned with the situation unfolding in Ukraine but business activity reached a 3-month high. In Asia, the IMF expects tightening financial conditions as U.S. growth improves, but the recoveries in advanced economies should continue to support growth throughout the region.

The SPDR S&P 500 (ARCA:SPY) ETF rose 1.07% higher, as of Thursday’s closing price. After moving above its pivot point at 186.44, the index trades between its R1 resistance at 191.57 and S1 support at 183.18. Traders should watch for a move above R1 resistance to R2 resistance at 194.83 or a move below S1 support to S2 support at 178.05. Looking at technical indicators, RSI appears slightly overbought at 57.71, while MACD remains bullish after a crossover on April 21st.

The SPDR S&P 500 (ARCA:SPY) ETF rose 1.07% higher, as of Thursday’s closing price.

The SPDR Dow Jones Industrial Average (ARCA:DIA) ETF rose 1.14% higher, as of Thursday’s closing price. After moving off of its 50-day moving average, the index reached towards its prior R1 resistance and upper trend line. Traders should watch for a breakout from the upper trend line towards R1 resistance at 167.67 or a move down below its 50-day moving average to S1 support at 161.49. Looking at technical indicators, the RSI appears a bit overbought at 58.05 and the MACD remains bullish.

The SPDR Dow Jones Industrial Average (ARCA:DIA) ETF rose 1.14% higher, as of Thursday’s closing price.

The PowerShares QQQ (Nasdaq:QQQ) ETF rose 1.69% higher, as of Thursday’s closing price. After rising above its pivot point at 86.78, the index moved towards its 50-day moving average at 88.23 where it faces resistance. Traders should watch for a breakout from these levels towards R1 resistance at 90.29 or a move lower to S1 support and lower trend line at 83.89. Looking at technical indicators, the RSI appears neutral at 52.79 and the MACD continues to trend positive.

The PowerShares QQQ (NASDAQ:QQQ) ETF rose 1.69% higher, as of Thursday’s closing price.

The iShares Russell 2000 (NYSE:IWM) ETF rose 0.30% higher, as of Thursday’s closing price. After bouncing along its lower trend line, the index moved marginally higher towards its pivot point at 113.04. Traders should watch for a move higher towards the 50-day moving average at 115.54 or a breakdown below the lower trend line towards S1 support at 107.60. Looking at technical indicators, the RSI appear a bit oversold at 43.45 but the MACD appears uncertain.

The iShares Russell 2000 (NYSE:IWM) ETF rose 0.30% higher, as of Thursday’s closing price.

Summary

The major U.S. indices moved largely higher today driven by the U.S. Federal Reserve’s confidence in the U.S. economic recovery. Next week, traders will be watching a number of key economic reports including International Trade data on May 6th and Jobless Claims on May 8th. Additional comments out of the Federal Reserve will also be closely watched for signs of any upcoming surprises.

Charts courtesy of StockCharts.com.

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