Tickers in this Article: SPY, QQQ, DIA, IWM
The markets in the United States ended the week on a lower note, amid uncertainty surrounding the so-called "fiscal cliff." U.S. House of Representatives Speaker John Boehner voiced frustration with the White House and indicated that he would not give ground to President Barack Obama on a new fiscal plan. If a new plan isn't negotiated, steep tax hikes and spending cuts will be triggered at the end of the year, almost certainly pushing the U.S. back into a recession.

International markets rallied early during the week, as the eurozone crisis appeared to be improving. But, concerns about the fiscal cliff ended the seven-day rally in most global markets, as a recession in the U.S. could lead to many problems around the world. The U.S. serves as a key export market and a source of capital for many countries around the world, ranging from China to members of the European Union.

The S&P 500 SPDR (ARCA:SPY) ETF ended the week marginally lower amid the U.S. fiscal cliff uncertainty. Currently, the index is trading right above its 50-day moving average at 141.80 and below an upper trendline at around 144. Traders should watch these two levels for a breakout, with an upside target of 147 and a downside target of 138.17 at the 200-day moving average. Looking at technical indicators, the relative strength index (RSI) remains relatively neutral at 54.92, while the moving average convergence divergence (MACD) remains in a bullish uptrend after its crossover in November 2012.

SEE: The Anatomy Of Trading Breakouts

SPY ETF ended the week marginally lower amid the U.S. fiscal cliff uncertainty.


The Dow Jones Industrial Average SPDR (ARCA:DIA) ETF ended the week roughly even due to the same ongoing concerns in the U.S. Currently, the index is trading above its 50-day moving average at 130.79 and below prior highs at around 135.80 at a key trendline level. Traders should watch for a break of these upper or lower levels, with an upside target of 135.80 and a downside target of 128.68 at the 200-day moving average. Looking at technical indicators, the RSI remains slightly overbought at 58.50, while the MACD remains in a bullish uptrend.

SEE: A Primer On The MACD

DIA ETF ended the week roughly even due to the same ongoing concerns in the U.S.


The PowerShares QQQ (Nasdaq:QQQ) ETF ended the week roughly even amid fiscal cliff concerns and ongoing weakness in technology shares. After breaking down from its 50-day and 200-day moving averages, the index now trades at a prior high trendline with strong downside pressure. Traders should watch for a break of this trendline towards the downside or a less likely break of the 50-day and 200-day moving averages on the upside at 65.50 and 65.40, respectively. Looking at technical indicators, the RSI is marginally oversold at 47.64, while the MACD appears on the verge of a bearish crossover, which could signal a prolonged move lower.

QQQ ETF ended the week roughly even amid fiscal cliff concerns and ongoing weakness in technology shares.


The iShares Russell 2000 Index (ARCA:IWM) ETF ended the week roughly even, faring better than most other U.S. indexes. Currently, the index trades an upper trendline at around 83.80 and above its 50-day moving average at 81.51. Traders should watch for a break of these levels to prior highs at 86 on the upside and the 200-day moving average of 80.10 on the downside. Looking at the technical indicators, the RSI is marginally overbought at 58.76 and the MACD remains in a bullish uptrend after its bullish crossover back in November.

SEE: An Introduction To The Relative Strength Index

IWM ETF ended the week roughly even, faring better than most other U.S. indexes.


The Bottom Line
The U.S. market ended the week largely even, after fiscal cliff concerns erased mid-week gains. Looking forward, traders will be closely watching the fiscal cliff talks, as well as a number of upcoming economic indicators. Housing starts are due out on December 19, Jobless Claims and GDP Data will be released on December 20 and Personal Income and Outlays will be released on December 21 with all providing key insights into the economy's health.

Charts courtesy of stockcharts.com.

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

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