Major U.S. indices moved lower last week, as of Thursday’s close, amid concerns about Iraq’s stability and the implications for energy prices. Apart from geopolitical concerns, the U.S. economy may have contracted even more than initially thought during Q1 2014 with some analysts projecting an alarming 2% contraction. Traders were also concerned with retail sales that rose less-than-expected in May and first-time applications for unemployment benefits that rose two weeks ago.

International markets followed U.S. markets lower last week. Japan’s Nikkei 225 fell 1.49% lower; Britain’s FTSE 100 fell 0.22% lower; and Germany’s DAX 30 fell 0.49% lower, as of Thursday’s close. In Europe, the ECB’s historic interest rate cuts took effect with regulators hoping that a negative rate will spur growth. In Asia, China announced new plans to jumpstart its growth through infrastructure spending, while Japan’s economy unexpectedly picked up steam in Q1 2014.

The SPDR S&P 500 (ARCA:SPY) ETF fell 0.96% lower as of Thursday’s close. After moving lower off its R1 resistance at 194.98, the index continued to trend downward towards its pivot point at 190.50. Traders should watch for an extended move down toward those levels or a rebound to retest its upper trend line and R1 resistance at between 194.98 and 196.00. Looking at technical indicators, the RSI moved out of overbought territory, but the MACD could reverse its trend soon.

The SPDR S&P 500 (ARCA:SPY) ETF fell 0.96% lower, as of Thursday’s close.

The SPDR Dow Jones Industrial Average (ARCA:DIA) ETF fell 1.08% lower, as of Thursday’s close. After moving lower off its R2 resistance at 169.69, the index moved below its R1 resistance to test its trend line support. Traders should watch for a breakdown from this trend line toward its lower trend line and pivot point at 165.64 or a rebound higher to retest its R1 and R2 resistance. Looking at technical indicators, the RSI moved off its highs, but the MACD faces downward pressure.

The SPDR Dow Jones Industrial Average (ARCA:DIA) ETF fell 1.08% lower, as of Thursday’s close.

The PowerShares QQQ (NASDAQ:QQQ) ETF fell 0.63% lower, as of Thursday’s close. After moving lower from its R1 resistance at 93.33, the index approached its prior highs from back in early March of 2014. Traders should watch for a breakdown from these levels towards its pivot point at 89.43 or a rebound higher to retest its R1 resistance. Looking at technical indicators, the RSI remains overbought and the MACD looks as though it may experience a bearish crossover.

The PowerShares QQQ (NASDAQ:QQQ) ETF fell 0.63% lower, as of Thursday’s close.

The iShares Russell 2000 (NYSE: IWM) ETF fell 0.94% lower, as of Thursday’s close. After reaching its prior highs from back in late-January 2014, the index moved lower towards its R1 resistance at 115.32. Traders should watch for a breakdown from these levels toward its 50-day moving average at 112.54 or a rebound to retest the prior high trend line. Looking at technical indicators, the RSI appears relatively neutral and the MACD trend remains on the upswing.

The iShares Russell 2000 (NYSE: IWM) ETF fell 0.94% lower, as of Thursday’s close.

Summary

The major U.S. indices still remain a bit top-heavy from a technical standpoint, with the exception of the Russell 2000 small-cap index. Next week, traders will be watching for a number of economic events, including industrial production on June 16th, consumer prices and housing on June 17th, FOMC data on June 18th and jobless claims on June 19th, among other things. Traders will also be closely watching energy prices follow the geopolitical instability.

Charts courtesy of StockCharts.com.

Related Articles
  1. Chart Advisor

    ChartAdvisor for June 6 2014

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

    ChartAdvisor for May 30 2014

    Weekly Technical Summary of the Major U.S. Indexes.
  3. Chart Advisor

    ChartAdvisor for May 15 2014

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

    ChartAdvisor for May 9 2014

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

    ChartAdvisor for May 2 2014

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

    ChartAdvisor for April 25 2014

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

    ChartAdvisor for April 18 2014

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

    ChartAdvisor for April 11 2014

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

    ChartAdvisor for April 4 2014

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

    ChartAdvisor for March 27 2014

    Technical summary of the major U.S. indices.
RELATED FAQS
  1. What is Fibonacci retracement, and where do the ratios that are used come from?

    Fibonacci retracement is a very popular tool among technical traders and is based on the key numbers identified by mathematician ... Read Full Answer >>
  2. Should mutual funds be subject to more regulation?

    Mutual funds, when compared to other types of pooled investments such as hedge funds, have very strict regulations. In fact, ... Read Full Answer >>
  3. Do ETFs pay capital gains?

    Exchange-traded funds (ETFs) can generate capital gains that are transferred to shareholders, typically once a year, triggering ... Read Full Answer >>
  4. How do real estate hedge funds work?

    A hedge fund is a type of investment vehicle and business structure that aggregates capital from multiple investors and invests ... Read Full Answer >>
  5. Are Vanguard ETFs commission-free?

    While some Vanguard exchange-traded funds (ETFs) are available commission-free from third-party brokers, a large portion ... Read Full Answer >>
  6. Do Vanguard ETFs require a minimum investment?

    Vanguard completely waives any U.S. dollar minimum amounts to buy its exchange-traded funds (ETFs), and the minimum ETF investment ... Read Full Answer >>
COMPANIES IN THIS ARTICLE
Trading Center