The markets in the United States ended the week on a mixed note after a flurry of mergers and acquisitions (M&A) helped offset weakness spurred by a lower than expected fourth quarter GDP reading, with the Russell 2000 jumping 1.11% and the Dow Jones Industrial Average falling 0.26%. Over the past week, economic indicators saw consumer confidence jumping more than what was expected to 76.3, but business inventories coming in less than expected, signaling a potential disconnect.

Foreign markets were also largely mixed this week. Britain's FTSE 100 jumped more than 1%, Japan's Nikkei 225 fell 0.16% and China's Xinhua China 25 jumped about 1%. Traders in these markets remain focused on the future monetary policy action in Japan, the central bank policy changes in the Bank of England and the potential improvements in China's market following an economic pick-up after reaching a 13-year low in recent quarters.

The SPDR S&P 500 (ARCA:SPY) ETF jumped 0.28% this week amid some economic news that somewhat bullish and a flurry of M&A activity. Currently, the index trades roughly at its R1 pivot point resistance at 152.18, with upper resistance at the R2 pivot point of 154.67 and lower support at the pivot point of 148.46. Technical indicators suggest that the index may still be overdue for a retracement, with a relative strength index (RSI) reading of 69.01 and a moving average convergence divergence (MACD) that appears ready for a bearish crossover, although both of these signals have signaled the same over the past weeks.

SEE: Momentum And The Relative Strength Index

SPY bearish crossover

The PowerShares QQQ (Nasdaq:QQQ) ETF moved down 0.13% this week, as technology companies still struggle to find a balance amid Apple's extended slump. Currently, the index trades between its R1 pivot point support level at 67.72 and its R2 pivot point resistance level at 68.56, in choppy and indecisive trading action that could continue moving into next week. Technical indicators suggest that the index is marginally overbought, with an RSI reading of 57.97, while the MACD remains even and uneventful for the time being.

QQQ overbought

The SPDR Dow Jones Industrial Average (ARCA:DIA) ETF lagged the other major indexes this week, falling around 0.26% in mid-day trading on Friday. Currently, the index trades between its pivot point support level at 137.08 and R1 pivot point resistance level at 141.55. Technical indicators pointed to an overbought climate, with the RSI reading a high 63.17 and the MACD already in a bearish crossover that suggests a potential downside or at least an even price action ahead for traders in the market's most watched index.

SEE: Trading The MACD Divergence

DIA overbought

The iShares Russell 2000 Index (ARCA:IWM) ETF continued to outperform the other major indexes this week, jumping more than 1% as of mid-day trading on Friday. Recently, the index broke out from its R1 pivot point resistance at 91.19 and trades just below its R2 pivot point resistance at 92.81. The consistent rise in the index has led to overbought conditions, with the RSI technical indicator reading a high 71.63, but the MACD appears on the verge of a bullish crossover that could suggest higher prices moving into next week.

DIA overbought

The Bottom Line
The major indexes in the U.S. were mixed this week, led by the Russell 2000 and lagged by the Dow Jones Industrial Average. Many of these indexes appear to be overbought at current levels, suggesting a potential retracement in the near term, although they have thus far been bucking the trend towards the upside. Looking ahead to next week, traders should watch for FOMC minutes due out on Feb. 20 and jobless claims due out Feb. 21 for hints on both monetary policy decisions moving forward and potential improvements in the U.S. job market.

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. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. 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.
  7. 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.
  8. 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.
  9. 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.
  10. Mutual Funds & ETFs

    ETF Analysis: iShares Morningstar Small-Cap Value

    Find out about the Shares Morningstar Small-Cap Value ETF, and learn detailed information about this exchange-traded fund that focuses on small-cap equities.
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!