The markets in the United States moved higher this week amid optimism that the "fiscal cliff" concerns would be resolved and some favorable economic indicators. The housing market showed signs of improving and jobless claims came in lower than expected, but consumer sentiment came in lower than the economists' estimates of 84 at 82.7 and U.S. leading indicators remain somewhat depressed at 0.2% compared to 0.6% during the previous period.

International markets also showed signs of improvement this week, after Japan's Nikkei hit a two-month high and Greece's creditors agreed to reconvene Monday in order to try and reach an agreement to release the next round of bailout funds. Germany also reported that its business confidence rose unexpectedly in November, providing a positive spin on the eurozone's most important economy driving growth.

The S&P 500's SPDR (ARCA:SPY) ETF moved sharply higher this week in a sharp reversal of its breakdown last week. The index rebounded off of a prior high at around $135 and broke out past the key 200-day moving average at $137.57, but all of this occurred on relatively low volume given the U.S. Thanksgiving holiday on Thursday and the early market close Friday. Currently, the index trades between the 200-day moving average and the 50-day moving average at $142.70, with a neutral relative strength index (RSI) reading and a bullish moving average convergence divergence (MACD) crossover. Looking ahead, traders should watch for a false breakout given the low volume and keep an eye on the 50-day moving average at $142.70 as the next major area of resistance and potential breakout.

SEE: Trading The MACD Divergence

SPY rebounded off of a prior high

The Dow Jones Industrial Average SPDR (ARCA:DIA) ETF moved sharply higher this week, reversing last week's downward trend. The index rebounded from just above prior lows at around $124 and barely gapped up through the 200-day moving average at $128.36 on very little volume. Currently, the index trades above the 200-day moving average and below the 50-day moving average at around $131.87, with a neutral RSI and a MACD that just showed a bullish crossover. Looking ahead, traders should keep an eye on the 50-day moving average as the next area of key resistance, as the 200-day moving average and prior highs provide support.

SEE: Support & Resistance Basics

DIA rebounded from just above prior lows

The PowerShares QQQ (Nasdaq:QQQ) ETF moved sharply higher this week, reversing the downward trends seen last week. The index rebounded from strong support at prior lows of around $62 on relatively low volume given the holiday, but remains below its 200-day moving average at $65.22 and prior highs at around the same level, with a neutral RSI indicator and a bullish crossover in the MACD indicator. Looking forward, traders should keep an eye on the $65 - $65.22 resistance level as a potential area of reversal or potentially a breakout.

QQQ rebounded from strong support

The iShares Russell 2000 Index (ARCA:IWM) ETF followed the other major indexes by moving sharply higher this week, reversing last week's downwards trend. The index rebounded from prior lows at around $76.50 to briefly surpass the 200-day moving average at around $80.03 on low volume due to the U.S. holiday. Currently, the index trades between the two moving averages with a neutral RSI indicator and the beginnings of a bullish breakout from the MACD indicator. Looking ahead, traders should watch for potential resistance or a breakout of the $81.90 level and the 50-day moving average of $82.25.

SEE: An Introduction To The Relative Strength Index

IWM reversed last weeks trends

The Bottom Line
The major U.S. indexes moved largely higher this week, but the low volume suggests that the moves could be reversed next week, particularly as many remain at key resistance levels. Looking ahead, traders will be keeping an eye on several key economic indicators due out next week, including new home sales data and the Beige Book on November 28, GDP and jobless claims on November 29 and personal income and outlays on November 30.

Charts courtesy of stockcharts.com.

At the time of writing, Justin Kuepper did not own any shares in any company mentioned in this article.

Related Articles
  1. Technical Indicators

    Understanding Trend Analysis

    Trend analysis is the use of past performance to predict future price movement of a security.
  2. Mutual Funds & ETFs

    ETF Analysis: ProShares UltraPro Nasdaq Biotech

    Obtain information about an ETF offerings that provides leveraged exposure to the biotechnology industry, the ProShares UltraPro Nasdaq Biotech Fund.
  3. Mutual Funds & ETFs

    ETF Analysis: iShares MSCI Europe Financials

    Learn about the iShares MSCI Europe Financials fund, which invests in numerous European financial industries, such as banks, insurance and real estate.
  4. Mutual Funds & ETFs

    ETF Analysis: SPDR S&P Insurance

    Learn about the SPDR S&P Insurance exchange-traded fund, which follows the S&P Insurance Select Industry Index by investing in equities of U.S. insurers.
  5. Mutual Funds & ETFs

    ETF Analysis: SPDR S&P Emerging Markets Small Cap

    Learn about the SPDR S&P Emerging Markets Small Cap exchange-traded fund, which invests in small-cap firms traded at the emerging equity markets.
  6. Mutual Funds & ETFs

    ETF Analysis: ETFS Physical Platinum

    Learn about the physical platinum ETF. Platinum embarked on a bull market from 2001 to 2011, climbing to record prices along with other precious metals.
  7. Mutual Funds & ETFs

    ETF Analysis: iShares MSCI Turkey

    Learn about the iShares MSCI Turkey exchange-traded fund, which invests in a wide variety of companies' equities traded on Turkish exchanges.
  8. Mutual Funds & ETFs

    ETF Analysis: PowerShares S&P 500 Downside Hedged

    Find out about the PowerShares S&P 500 Downside Hedged ETF, and learn detailed information about characteristics, suitability and recommendations of it.
  9. Mutual Funds & ETFs

    ETF Analysis: Guggenheim Enhanced Short Dur

    Find out about the Guggenheim Enhanced Short Duration ETF, and learn detailed information about this fund that focuses on fixed-income securities.
  10. Mutual Funds & ETFs

    ETF Analysis: iShares US Oil&Gas Explor&Prodtn

    Learn about the iShares U.S. Oil & Gas Exploration & Production ETF, which provides an efficient way to invest in the exploration and production sector.
RELATED TERMS
  1. Exchange-Traded Fund (ETF)

    A security that tracks an index, a commodity or a basket of assets ...
  2. Exchange-Traded Mutual Funds (ETMF)

    Investopedia explains the definition of exchange-traded mutual ...
  3. Fintech

    Fintech is a portmanteau of financial technology that describes ...
  4. Indicator

    Indicators are statistics used to measure current conditions ...
  5. Intraday Momentum Index (IMI)

    A technical indicator that combines aspects of candlestick analysis ...
  6. Lion economies

    A nickname given to Africa's growing economies.
RELATED FAQS
  1. What assumptions are made when conducting a t-test?

    The common assumptions made when doing a t-test include those regarding the scale of measurement, random sampling, normality ... Read Full Answer >>
  2. What does a high turnover ratio signify for an investment fund?

    If an investment fund has a high turnover ratio, it indicates it replaces most or all of its holdings over a one-year period. ... Read Full Answer >>
  3. Does index trading increase market vulnerability?

    The rise of index trading may increase the overall vulnerability of the stock market due to increased correlations between ... Read Full Answer >>
  4. What is the difference between passive and active asset management?

    Asset management utilizes two main investment strategies that can be used to generate returns: active asset management and ... Read Full Answer >>
  5. How are double exponential moving averages applied in technical analysis?

    Double exponential moving averages (DEMAS) are commonly used in technical analysis like any other moving average indicator ... Read Full Answer >>
  6. Is there a situation in which wash trading is legal?

    Wash trading, the intentional practice of manipulating a stock's activity level to deceive other investors, is not a legal ... Read Full Answer >>

You May Also Like

COMPANIES IN THIS ARTICLE
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!