The S&P 500 ended the week on a positive note, but the move wasn't enough to overcome earlier losses. Disappointing earnings from NVIDIA Corporation (NVDA) and Nordstrom, Inc. (JWN) reinforced concerns over slowing growth in 2019 – particularly in the technology sector. Industrial output also came in below analyst expectations in October, while the Federal Reserve's latest data showed an increase in household debts.
With the Thanksgiving holiday on Thursday and a shortened session on Friday, traders can expect a relatively quiet week, but the market will be keeping an eye on existing home sales, jobless claims, and consumer sentiment data on Nov. 21. Traders will also be keeping an eye on the evolving negotiations between the U.S. and China to end the ongoing trade war, which could prove to be a market-moving event.
Broad Market Below Key Resistance
The SPDR S&P 500 ETF Trust (SPY) fell 1.27% last week, making it the best performing major index. After setting new reaction lows last week, the index rebounded to the pivot point and 200-day moving average at $274.11 where there's significant resistance. Traders should watch for a breakout toward trendline resistance at $280.69 or a breakdown to retest trendline support at around $268.00. Looking at technical indicators, the relative strength index (RSI) appears neutral with a reading of 47.41, but the moving average convergence divergence (MACD) remains positive.
Industrials Fall Sharply Lower
The SPDR Dow Jones Industrial Average ETF (DIA) fell 2.18% last week, making it the worst performing major index. After briefly hitting the 200-day moving average at $248.72, the index rebounded to the pivot point at $253.18. Traders should watch for a breakout to the 50-day moving average at $257.25 or a breakdown to retest trendline support and the 200-day moving average. While the RSI remains neutral at 49.47, the MACD could see a near-term bearish crossover.
Tech Stocks Continue to Disappoint
The PowerShares QQQ Trust (QQQ) fell 1.49% last week as earnings continued to disappoint. After breaking down from the pivot point and 200-day moving average at $171.82, the index made new reaction lows last week. Traders should watch for a breakdown from trendline support at $164.00 or a rebound to retest the pivot point and 200-day moving average on the upside. The RSI appears slightly oversold at 44.01, but the MACD could see a near-term bearish crossover ahead.
Small Cap Recovery Fizzles Out
The iShares Russell 2000 Index (IWM) fell 1.38% last week, marking an end to its brief recovery. After breaking down from the pivot point at $154.68, the index made new reaction lows last week. Traders should watch for a retest of the pivot point and trendline resistance at $154.68 or a move lower to test trendline support at around $149.00. Looking at technical indicators, the RSI appears slightly oversold at 44.45, and the MACD uptrend remains in place.
Charts courtesy of StockCharts.com. The author holds no position in the stock(s) mentioned except through passively managed index funds.