The major U.S. indices had mixed performance this week, after a turbulent start ended largely on a positive note. After U.S. and Japanese central banks signaled an end to easing policies, global equities, emerging markets, risky bonds and commodities sold off. But U.S. markets recovered toward the end of the week, after U.S. retail sales came in stronger than expected in May, and applications for unemployment benefits fell last week.
International indices followed the U.S. market lower this week. Japan's Nikkei 225 was one of the most interesting stories, falling 1.48% on the week, after Prime Minister Shinzo Abe signaled a possible sooner-than-expected end to easing policies. Many other global indices fell lower as well, including Britain's FTSE 100, which fell 1.46%, Germany's DAX 30, which fell 1.25%, and even the Hong Kong's Hang Seng index, which fell 6.35%.
The SPDR S&P 500 (NYSE:SPY) ETF fell 0.42%, as of early trading on Friday morning. After rebounding from its 50-day moving average and lower trend line at 161.53, the index continues to trade around its pivot point of 163.54. Traders should watch for a rebound from this level to the R1 pivot point resistance at 168.98 or a drop below the key support level to S1 pivot point support at 158.01. Looking at technical indicators, the RSI remains neutral at 53.08, but the MACD remains in a bearish downtrend that dates back to late May 2013.
The PowerShares QQQ (Nasdaq:QQQ) ETF fell 0.9%, as of early trading on Friday morning. After rebounding from its 50-day moving average at 71.61, the index remains above a key trend line support, but seems to be struggling to hold these levels. Traders should watch for a rebound from these levels to R1 pivot point support at 75.38 or a potential breakdown to the lower trend line at around 69.50. Looking at technical indicators, the RSI remains neutral at 50.54, while the MACD remains in a bearish downtrend dating back to late May, 2013.
The SPDR Dow Jones Industrial Average (NYSE:DIA) ETF fell 0.45%, as of early trading on Friday morning. After rebounding from a lower trend line and pivot point at around 150.80, the index remains within a long-term channel. Traders should watch for a rebound from the lower trend line toward the upper trend line at 158.00 or a potential breakdown that could see a move to S1 pivot point support at 146.47. Looking at technical indicators, the RSI remains neutral at 53.09, while the MACD remains in a bearish downtrend dating back to late May, 2013.
The iShares Russell 2000 Index (NYSE:IWM) ETF rose 0.13%, as of early trading on Friday morning. Currently, the index trades between an upper trend line and R1 pivot point resistance at 101.53 and a lower trend line and S1 pivot point support 92.91. Traders should watch for a break of either of these levels to R2 pivot point resistance at 105.27 or S2 pivot point support and the 200-day moving average at 87.92. Looking at technical indicators, the RSI remains neutral at 55.50 and the MACD remains in a bearish crossover.
The Bottom Line
The major U.S. indices moved largely lower this week, but ended on a positive note amid favorable economic data. Next week, traders will be watching for a number of additional economic releases, including the U.S. Consumer Price Index and Housing Starts on June 18, FOMC Meeting Notes on June 19 and Jobless Claims, Existing Home Sales and the Philadelphia Fed Survey on June 20. Of course, traders will also be watching the U.S. Federal Reserve and Bank of Japan for further hints on future easing policies.
Charts courtesy of StockCharts.com
At the time of writing, Justin Kuepper did not own any shares in any of the companies mentioned in this article.