The major U.S. indexes moved higher over the past week after the Commerce Department upped second quarter economic growth to a 3.1% annualized rate. While hurricanes Harvey and Irma could negatively affect third quarter growth, the economy remains largely on track, and rebuilding efforts could boost growth during the fourth quarter and into next year.

The upward revision from the 3.0% gross domestic product reflected a faster inventory investment.Businesses could also increase their inventory investments in a move that could offset any declines.

International markets followed the U.S. markets higher. Japan's Nikkei 225 rose 0.29%; Germany's DAX 30 rose 1.88%; and Britain's FTSE 100 rose 0.8%. In Europe, the European Commission's Economic Sentiment Indicator rose to the highest levels since June 2007, which supports the European Central Bank's plans to rein in its monthly purchases of government bonds. In Asia, China has been successful at maintaining growth while cleaning up its financial sector. (See also: How ETF Investors Are Allocating to China.)

The SPDR S&P 500 ETF (ARCA: SPY) rose 0.72% in the last week of September. After rebounding from R1 support at $249.09, the index rebounded to fresh highs. Traders should watch for an extended breakout to R2 resistance at $251.91 or a move lower to retest R1 support levels. Looking at technical indicators, the relative strength index (RSI) reached overbought levels at 70.23, but the moving average convergence divergence (MACD) remains in a bullish uptrend after briefly approaching a bearish crossover. (For more, see: Why the S&P 500 Could Rise to Over 3,000 in 2018.)

Technical chart showing the performance of the SPDR S&P 500 ETF (SPY)

The SPDR Dow Jones Industrial Average ETF (ARCA: DIA) rose 0.28% over the past week, making it the worst performing major index. After trending sideways above R1 support at $221.41, the index reached R2 resistance at $223.75. Traders should watch for a breakout from these levels to upper trendline resistance or a move lower to retest R1 support levels. Looking at technical indicators, the RSI is approaching overbought levels at 69.25, but the MACD could see a bearish crossover in the near term.

 DIA)

The PowerShares QQQ Trust (NASDAQ: QQQ) rose 0.78% over the past week. After breaking out from the 50-day moving average at $143.82, the index broke out toward upper trendline resistance at about $146.75. Traders should watch for a breakout from the ascending triangle pattern to R1 resistance at $147.89 or a move lower to retest the pivot point and 50-day moving average at $143.82. Looking at technical indicators, the RSI appears neutral at 56.22, while the MACD could see a near-term bullish crossover. (See also: The QQQ Breaks Down From Key Support Levels.)

Technical chart showing the performance of the PowerShares QQQ (QQQ)

The iShares Russell 2000 Index ETF (ARCA: IWM) rose 2.69%, making it the best performing major index. After gapping higher earlier this month, the index broke out from R2 resistance at $146.41 to upper trendline resistance. Traders should watch for a breakout from upper trendline resistance to fresh highs or a move lower to retest R2 support levels at $146.41. Looking at technical indicators, the RSI appears very overbought at 82.67, but the MACD remains in a robust bullish uptrend. (For more, see: Russell Breakout Lifts Small Caps Into Leadership.)

Technical chart showing the performance of the iShares Russell 2000 Index ETF (IWM)

The Bottom Line

While the major indexes moved to end the month and quarter, many appear overbought at current levels. This coming week, traders will be closely watching key economic indicators, including ISM manufacturing data on Oct. 2, ADP employment on Oct. 4 and employment data on Oct. 6. The market will also be keeping a close eye on any developments in U.S. or international politics over the weekend. (For additional reading, check out: 4 Reasons U.S., Global Stocks Will Keep Rising.)

Note: Charts courtesy of StockCharts.com. As of the time of writing, the author had no holdings in the securities mentioned.

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