The major U.S. indexes moved lower over the past week. Last weekend, The New York Times and The Observer reported that 50 million Facebook profiles were harvested to help President Trump's campaign and pro-Brexit agendas through Cambridge Analytica, sending shares of Facebook, Inc. (FB) 9.6% lower this week. President Trump shook the markets on Thursday after announcing $60 billion in tariffs on China and on Friday when he threatened to veto the spending bill.
International markets were lower over the past week. Japan's Nikkei 225 fell 4.9%; Germany's DAX 30 fell 3.8%; and Britain's FTSE 100 fell 2.6%. In Europe, Eurozone businesses ended the first quarter with their slowest growth rates in over a year thanks to a lofty euro valuation. In Asia, China called the United States a repeat abuser of world trade rules, and if the Asian economic giant decides to retaliate, it could start a trade war over the coming weeks. (See also: Why the Stock Market Exodus Has Only Begun.)
The SPDR S&P 500 ETF (ARCA: SPY) fell 5.3% over the past week. After briefly surpassing prior highs, the index moved sharply lower below the 50-day moving average and pivot point to retest prior lows. Traders should watch for a rebound from these levels to retest the pivot point at around $268.14 or a breakdown from trendline support and the 200-day moving average at $255.95 to fresh lows. Looking at technical indicators, the relative strength index (RSI) moved to oversold territory at 30.30, while the moving average convergence divergence (MACD) experienced a bearish crossover.
The SPDR Dow Jones Industrial Average ETF (ARCA: DIA) fell 4.8% over the past week. After nearly reaching prior highs, the index moved sharply lower and broke down from trendline support to S1 support at $234.40. Traders should watch for a rebound from these levels to retest the pivot point and trendline resistance at $248.08 or a breakdown from S1 support to the 200-day moving average at around $231.43. Looking at technical indicators, the RSI appears oversold at 31.42, while the MACD experienced a renewed bearish crossover.
The PowerShares QQQ Trust (NASDAQ: QQQ) fell 6% over the past week, making it the worst performing major index. After breaking out to new highs, the index moved sharply below the lower trendline, 50-day moving average and pivot point support. Traders should watch for an ongoing move lower to retest prior lows at around $152.50 or a rebound from S1 support at $154.40 to retest the pivot point at $162.43. Looking at technical indicators, the RSI appears oversold at 33.10, while the MACD remains in a bearish crossover. (For more, see: Tech Bubble Burst Could Reach Beyond Equities: Nomura.)
The iShares Russell 2000 Index ETF (ARCA: IWM) fell 4.2% over the past week, making it the best performing major index. After breaking down from trendline support at around $152.50, the index moved to the pivot point at $149.67. Traders should watch for a rebound from these levels to retest trendline resistance or a breakdown lower to the 200-day moving average at $146.79. Looking at technical indicators, the RSI appears modestly oversold, while the MACD experienced the start of a bearish crossover.
The Bottom Line
The major indexes moved lower over the past week, but many of them remain in oversold conditions. Next week, traders will be closely watching several key economic indicators, including a gross domestic product reading on March 28 and consumer sentiment on March 29. The market will close early on March 30 in observance of Good Friday in the United States. (For additional reading, check out: Trump 'Very Serious' About 'Phase 2' of Tax Cuts.)
Note: Charts courtesy of StockCharts.com. As of the time of writing, the author had no holdings in the securities mentioned.