ChartAdvisor for June 13 2014

By Justin Kuepper | June 13, 2014 AAA

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.

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