Major U.S. indices were mixed over the past week with the Dow Jones Industrial Average outperforming Nasdaq and small-cap stocks as of Thursday’s close. After the U.S. Federal Reserve’s decision to continue tapering at a rate of $10 billion per month, investors are caught between optimism about the U.S. economic recovery and the bearish prospects of higher interest rates in the near term. The latter has been at least delayed, however, judging by the latest FOMC minutes.

International markets were somewhat mixed over the past week. Britain’s FTSE 100 jumped 0.25%; Japan’s Nikkei 225 fell 2.03%; and Germany’s DAX 30 rose 0.54% over the past week, as of Thursday’s close. In Europe, investors remain concerned over developments in Ukraine, but the European Commission expects 1.6% growth in 2014. In Asia, China’s growth remains a key concern for investors with many experts predicting performance similar to last year’s lackluster turnout.

The SPDR S&P 500 (ARCA:SPY) ETF rose 0.45% over the past week, as of Thursday’s close. After rebounding in mid-April, the index trades just above its 50-day moving average in a potential rising wedge reversal pattern. Traders should watch for a breakdown below the lower trend line at around 184.00 for a reversal or a rebound above R1 resistance at 191.57 to break the pattern. Looking at technical indicators, both RSI and MACD appear to be relatively neutral.

The SPDR S&P 500 (ARCA:SPY) ETF rose 0.45% over the past week, as of Thursday’s close.

The SPDR Dow Jones Industrial Average (ARCA:DIA) ETF rose 0.76% over the past week, as of Thursday’s close. After rebounding in mid-April, the index remains trapped under a 166.00 resistance level above its 50-day moving average. Traders should watch for a breakout above these levels towards R1 resistance at 167.67 given the ascending triangle pattern or a move below 163.71 pivot point levels. Technical indicators are relatively neutral for both the RSI and MACD.

The SPDR Dow Jones Industrial Average (ARCA:DIA) ETF rose 0.76% over the past week, as of Thursday’s close.

The PowerShares QQQ (Nasdaq:QQQ) ETF fell 0.05% over the past week, as of Thursday’s close. After moving higher towards its 50-day moving average and upper trend line at 87.97, the index retraced below its pivot point at 86.78. Traders should watch for a move down to retest its S1 support at 83.89 given the descending triangle pattern or a potential breakout above its upper trend line. Looking at technical indicators, the RSI and MACD both appear relatively neutral.

The PowerShares QQQ (Nasdaq:QQQ) ETF fell 0.05% over the past week, as of Thursday’s close.

The iShares Russell 2000 (NYSE:IWM) ETF fell 1.09% over the past week, as of Thursday’s close. After barely reaching its pivot point at 113.04, the index moved lower to re-test its supper at around 109.00. Traders should watch for a breakdown from these levels towards its S2 support at 103.22 given the descending triangle pattern or a breakout higher from its upper trend line and pivot point. RSI appears to be oversold at 33.67, but MACD remains in a very bearish down trend.

The iShares Russell 2000 (NYSE:IWM) ETF fell 1.09% over the past week, as of Thursday’s close.

Summary

The major U.S. indices have sent somewhat mixed signals over the past week, with bullish patterns for SPY and DIA and bearish patterns for IWM and QQQ. Traders will be watching a number of key economic events next week, including retail sales on May 13th, producer prices on May 14th, jobless claims, consumer prices, and industrial production on May 15th, and housing starts on May 16th. Further guidance from the U.S. Federal Reserve will also be closely watched over the coming weeks.

Charts courtesy of StockCharts.com.

Related Articles
  1. Chart Advisor

    ChartAdvisor for May 2 2014

    Weekly technical summary of the major U.S. indexes.
  2. Chart Advisor

    ChartAdvisor for April 25 2014

    Weekly technical summary of the major U.S. indices.
  3. Chart Advisor

    ChartAdvisor for April 18 2014

    Weekly technical summary of the major U.S. indices.
  4. Chart Advisor

    ChartAdvisor for April 11 2014

    Weekly technical summary of the major U.S. indices.
  5. Chart Advisor

    ChartAdvisor for April 4 2014

    A technical summary of the major U.S. indices.
  6. Chart Advisor

    ChartAdvisor for March 27 2014

    Technical summary of the major U.S. indices.
  7. Chart Advisor

    ChartAdvisor for March 21 2014

    A technical summary of the major U.S. indices.
  8. Chart Advisor

    ChartAdvisor for March 13 2014

    Summary of the major U.S. indices.
  9. Investing

    Redefining the Stop-Loss

    Using Stop-losses for trading doesn’t mean ‘losing money’, but instead think about the money you'll start saving once you learn how they work.
  10. Mutual Funds & ETFs

    ETF Analysis: PowerShares FTSE RAFI Emerging Mkts

    Learn more about the PowerShares FTSE RAFI Emerging Markets ETF, a fundamentally weighted fund that tracks emerging market equities.
RELATED TERMS
  1. Exchange-Traded Fund (ETF)

    A security that tracks an index, a commodity or a basket of assets ...
  2. Exchange-Traded Mutual Funds (ETMF)

    Investopedia explains the definition of exchange-traded mutual ...
  3. Fintech

    Fintech is a portmanteau of financial technology that describes ...
  4. Indicator

    Indicators are statistics used to measure current conditions ...
  5. Intraday Momentum Index (IMI)

    A technical indicator that combines aspects of candlestick analysis ...
  6. Lion economies

    A nickname given to Africa's growing economies.
RELATED FAQS
  1. Tame Panic Selling with the Exhausted Selling Model

    The exhausted selling model is a pricing strategy used to identify and trade based off of the price floor of a security. ... Read Full Answer >>
  2. Point and Figure Charting Using Count Analysis

    Count analysis is a means of interpreting point and figure charts to measure vertical price movements. Technical analysts ... Read Full Answer >>
  3. What assumptions are made when conducting a t-test?

    The common assumptions made when doing a t-test include those regarding the scale of measurement, random sampling, normality ... Read Full Answer >>
  4. What does a high turnover ratio signify for an investment fund?

    If an investment fund has a high turnover ratio, it indicates it replaces most or all of its holdings over a one-year period. ... Read Full Answer >>
  5. Does index trading increase market vulnerability?

    The rise of index trading may increase the overall vulnerability of the stock market due to increased correlations between ... Read Full Answer >>
  6. What is the difference between passive and active asset management?

    Asset management utilizes two main investment strategies that can be used to generate returns: active asset management and ... Read Full Answer >>

You May Also Like

COMPANIES IN THIS ARTICLE
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!