The major U.S. indices moved higher during the holiday week, with the Russell 2000 leading the pack and the S&P 500 posting the slowest gains. Vehicle sales posted their strongest month in more than five years in June, home prices raised the most in seven years in May, and factories recorded their second straight month of gains in May, signaling that the U.S. economic growth continues to be on the rise, despite some concerns caused by the Fed and regulators.
International indices were largely mixed last week, with the Japanese Nikkei 225 rising 4.63% and the German DAX 30 falling 1.93% for the week. The biggest story of the week was Britain’s FTSE 100 that jumped 2.58% in its best week since January. Incoming governor Mark Carney made a strong impression during his first week after indicating that there would be no rise in interest rates during the foreseeable future, helping allay such concerns.
The SPDR S&P 500 (ARCA: SPY) ETF rose 1.63% last week, after rebounding from its 160.42 pivot point to reach the middle of a barely-in-tact price channel. Traders should watch for a move beyond the R1 pivot point resistance to test the upper trend line at 168.00 or a move down past the pivot point and lower trend line level at around 160.00 on the downside. Looking at technical indicators, the MACD may have crossed over on low volume and the RSI appears to be hovering around neutral levels with a reading of about 56.71.
The PowerShares QQQ (NASDAQ: QQQ) ETF rose 1.84% last week, extending its rise to test upper trend line resistance at about 73.00. Traders should watch for a breakout of this level to re-test near-term highs of just under 75.00 or a retracement back down to the 71.34 pivot point level or the lower trend line at around 70.00. Looking at technical indicators, the MACD appears to have crossed over – albeit on low volume – and the RSI remains in neutral territory with a reading of around 55.23 by the end of the week.
SEE: A Primer On The MACD
The SPDR Dow Jones Industrial Average (ARCA: DIA) ETF rose 1.65% last week, rebounding from a 148.92 pivot point and making a move towards key 155.00 resistance levels. Traders should watch for a re-testing of these levels or a drop back down to prior highs around 148.00 or even the lower S1 pivot point support at 144.80. Looking at technical indicators, the MACD appears to have crossed over in a bullish fashion – albeit on low volume – while the RSI remains at neutral levels with a reading of about 56.87 by the end of the week.
The iShares Russell 2000 Index (ARCA: IWM) ETF rose 2.75% last week, rebounding from a key lower trend line, 50-day moving average at 96.79, and pivot point level of 96.45. Traders should watch for a move higher towards the R2 pivot point resistance and upper trend line at 102.40 or a move back down to the 50-day moving average or lower trend line at 95.00. Looking at technical indicators, the MACD recently experienced a bullish crossover, while the RSI appears to be modestly overbought with a reading of 60.15 by week’s end.
The Bottom Line
The major U.S. indices moved higher last week, with many of them experiencing a bullish crossover in the MACD with only modest RSI readings. Looking ahead to next week, traders will be watching a number of key economic reports for an idea of future price direction, including FOMC minutes on July 10, jobless claims on July 11, and the producer price index figures on July 12, but especially Monday’s employment report that should provide key insights.
Charts courtesy of StockCharts.com