The U.S. economy provided investors with mixed signals this week. PMI Manufacturing rose more than expected to 54.3, October retail sales grew a better than expected 0.4%, and jobless claims fell to 323,000 versus a 335,000 estimate. But, the Housing Market Index came in weaker than expected with a reading of 54 and Existing Home Sales fell more than expected to 5.12 million, casting a shadow on the primary driver of the economic recovery. U.S. Federal Reserve policies also remain uncertain, with the economic recovery boosting the odds of higher rates.

International markets moved largely higher this week. Japan’s Nikkei 225 rose 1.42%; Britain’s FTSE 100 fell 0.3%; and, Germany’s DAX 30 rose 0.47%. Japan’s economy was boosted by better than expected growth in exports. Meanwhile, the eurozone’s disappointing PMI statistics point to an ongoing slowdown in the economy. Germany remains the exception to the rule and recently reported a surprising rebound in business confidence.

The SPDR S&P 500 (ARCA:SPY) ETF rose 0.09% this week, as of early trading on Friday morning. After breaking above its upper trend line resistance earlier this month, the index trades just below its R1 resistance at 180.69. Traders should watch for a possible move downward given the chart’s short-term rising wedge or a breakout to R2 resistance at 185.59. Looking at technical indicators, the RSI appears overbought at 66.38 and the MACD continues to trade sideways, supporting a bearish thesis over the near-term.

The SPDR Dow Jones Industrial Average (ARCA:DIA) ETF rose 0.36% this week, as of early trading on Friday morning. After breaking above its upper trend line resistance earlier this month, the index trades just above its R1 resistance at 158.88. Traders should watch for a move up to the R2 resistance at 162.75 or a retracement to its 158.00 trend line support. Looking at technical indicators, the RSI appears overbought at 69.88 and the MACD looks to be peaking at its current levels, supporting a bearish thesis over the near-term.

The PowerShares QQQ (Nasdaq:QQQ) ETF fell 0.14% this week, as of early trading on Friday morning. After moving off of its upper trend line in late-October, the index now trades in the middle of a price channel bounded at 86.00 on the upside and 80.88 on the downside. Traders should watch for a move to either of these channel boundaries over the coming week. Looking at technical indicators, the RSI is slightly overbought at 63.23 while the MACD remains in a bearish downtrend, although that looks as though it could crossover.

The iShares Russell 2000 (ARCA:IWM) ETF rose 0.54% this week, as of early trading on Friday morning. After rebounding from its lower trend line earlier this month, the index trades in the middle of a price channel bounded at 114.00 on the upside and 108.00 on the downside. Traders should watch for a move to either of these levels over the coming week. Looking at technical indicators, the RSI is modestly overbought at 60.69 and the MACD appears to be ending its bearish downtrend with a possible bullish crossover.

Summary

The major U.S. indices moved largely higher this week, although many of them appear to be oversold based on readings from the RSI indicator. Next week, traders will be watching a number of economic indicators for future insight, including Housing Starts on November 26th and Jobless Claims and Durable Goods Orders on November 27th. The market will also be listening closely to any comments from the Federal Reserve for insights on interest rates.

Charts courtesy of StockCharts.com.

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