Major U.S. indices moved largely lower over the past week with the exception of technology and healthcare stocks on the Nasdaq, as of Thursday’s close. After the U.S. Labor Department reported a 2% jump in inflation last month, many investors have been more confident in the durability of the U.S. economic recovery. Stocks suffered late in the week, however, after many bellwethers reported worse than expected earnings due to the unusually cold winter in Q1 2014.

International markets moved largely higher over the past week, although many indices showed weakness after a rough close in the U.S. on Thursday. Japan’s Nikkei 225 rose 0.82%; Germany’s DAX 30 rose 0.78%; and Britain’s FTSE 100 rose 0.39%, as of Thursday’s close. In Europe, Germany reported a robust 0.8% expansion in the first quarter but Italy and France disappointed investors. In Asia, investors remain concerned over China’s growth but Japan managed to post solid growth.

The SPDR S&P 500 (ARCA:SPY) ETF fell 0.32%, as of Thursday’s close. After briefly reaching a new all-time high, the index moved lower towards its 50-day moving average and pivot point at 86.44 before rebounding. Traders should watch for a breakout from R1 resistance at 191.57 on the upside or a breakdown of trend line support at around 185.50 on the downside. Looking at technical indicators, the RSI appears neutral at 49.93 but the MACD remains in a weak uptrend.

The SPDR S&P 500 (ARCA:SPY) ETF fell 0.32%, as of Thursday’s close.

The SPDR Dow Jones Industrial Average (ARCA:DIA) ETF fell 0.69%, as of Thursday’s close. After briefly reaching new all-time highs, the index fell lower to test its pivot point and lower trend line at 163.71. Traders should watch for a breakout from R1 resistance at 167.67 on the upside or a breakdown from lower trend line support and 50-day moving average at 163.63 on the downside. Technical indicators remain relatively neutral look at RSI and MACD.

The SPDR Dow Jones Industrial Average (ARCA:DIA) ETF fell 0.69%, as of Thursday’s close.

The PowerShares QQQ (Nasdaq:QQQ) ETF rose 0.47%, as of Thursday’s close. After rebounding higher earlier this week, the index gave up some of its gains and moved back towards its pivot point at 86.78. Traders should watch for a breakout from the upper trend line at around 88.00 or a breakdown from the lower trend line around 84.75 over the coming weeks. Looking at technical indicators, the RSI and MACD both appear relatively neutral, providing few hints for traders.

The PowerShares QQQ (Nasdaq:QQQ) ETF rose 0.47%, as of Thursday’s close.

The iShares Russell 2000 (NYSE:IWM) ETF fell 0.95%, as of Thursday’s close. After a brief rebound to its pivot point at 113.04, the index moved below its 200-day moving average to retest its trend line support at 108.00. Traders should watch for a breakdown below S1 support at 107.60 or a breakout from its descending resistance at around 112.00 over the coming weeks. Looking at technical indicators, the RSI appears oversold at 38.52 while the MACD remains very depressed.

The iShares Russell 2000 (NYSE:IWM) ETF fell 0.95%, as of Thursday’s close.

The Bottom Line

The major U.S. indices moved largely lower over the past week, as of Thursday’s close. With many of the RSI readings near neutral levels, investors appear to be somewhat undecided about setting new highs with the economy as it is. The exception is the Russell 2000 that remains somewhat oversold. Next week, traders will be watching for a number of key economic readings, including FOMC minutes on May 21st, Jobless Claims and Home Sales on May 22nd, and New Home Sales on May 23rd.

Charts courtesy of StockCharts.com.

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