ChartAdvisor for June 6 2014

By Justin Kuepper | June 06, 2014 AAA

Major U.S. indices moved higher over the past week, as of mid-day trading on Friday afternoon. A Federal Reserve survey showed \the U.S. economy strengthened over the past two months when looking at areas like manufacturing, construction, retail sales and bank lending. Perhaps more importantly, employers added 217,000 jobs in May, yielding a 6.3% unemployment rate according to the Labor Department, replacing all of the 8.7 million jobs lost during the recession.

In International markets, Japan’s Nikkei 225 jumped 3.04%; Germany’s DAX 30 jumped 0.44%; and Britain’s FTSE 100 jumped 0.20% over the past week, as of mid-day trading on Friday afternoon. In Europe, regulators moved into uncharted territory with a negative interest rate designed to stimulate the economy. In Asia, Japan’s economy grew at its fastest rate in three years as China’s economy has shown more signs of stability in May after a period of turbulence in the first half of the year.

The SPDR S&P 500 (ARCA:SPY) ETF rose 1.33% higher, as of mid-day trading on Friday afternoon. After reaching its R1 resistance and upper trend line at 194.98, the index appears to have broken through to new highs. Traders should watch for a move to R2 resistance at 197.29 or a retracement back to its pivot point at 190.50 before a move higher. Looking at technical indicators, the RSI appears overbought at 74.03, but the MACD remains firmly in a bullish uptrend.

The SPDR S&P 500 (ARCA:SPY) ETF rose 1.33% higher, as of mid-day trading on Friday afternoon.

The SPDR Dow Jones Industrial Average (ARCA:DIA) ETF rose 1.17% higher, as of mid-day trading on Friday afternoon. After spending time near its upper trend line, the index broke out higher past its R1 resistance. Traders should watch for a breakout from the R2 resistance at 169.69 or a move lower to retest its trend line support at around 167.50. Looking at technical indicators, the RSI appears overbought at 68.73 while the MACD remains relatively neutral.

The SPDR Dow Jones Industrial Average (ARCA:DIA) ETF rose 1.17% higher, as of mid-day trading on Friday afternoon.

The PowerShares QQQ (Nasdaq:QQQ) ETF rose 1.46% higher, as of mid-day trading on Friday afternoon. After struggling a bit earlier this month, the index broke out from its upper trend line resistance. Traders should watch for a move past its R1 resistance at 93.33 or a move back down to retest trend line support at around 91.00. Looking at technical indicators, the RSI appears overbought at 73.48, but the MACD remains in a very bullish long-term trend.

The PowerShares QQQ (Nasdaq:QQQ) ETF rose 1.46% higher, as of mid-day trading on Friday afternoon.

The iShares Russell 2000 (NYSE:IWM) ETF rose 2.60% higher, as of mid-day trading on Friday afternoon. After a choppy month of May, the index broke out from its 50-day moving average and upper trend line resistance. Traders should watch for a move to R2 resistance at 117.78 or a move back to retest its trend line support at around 114.50. Looking at technical indicators, the RSI is slightly overbought at 64.05 while the MACD remains in a bullish uptrend.

The iShares Russell 2000 (NYSE:IWM) ETF rose 2.60% higher, as of mid-day trading on Friday afternoon.

Summary

The major U.S. indices moved significantly higher over the past week, as of mid-day trading on Friday afternoon. While some indexes have reached their all-time highs, traders should be wary of the high RSI readings that could suggest some consolidation ahead. Next week, traders will be watching a number of events including retail sales and jobless claims on June 12th and producer price index data on June 13th, as well as any insights from the U.S. Federal Reserve.

Charts courtesy of StockCharts.com.

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