The major U.S. indexes were mixed this week, with small-caps outperforming and tech stocks underperforming. In the tech sector, Bloomberg reported on Friday that Apple’s new iPhone might not feature a 1-gigabyte processor, which sent shares of the tech giant lower. Citron Research – a short-focused research firm – also reported that Nvidia Corp. (NVDA) shares might be overvalued and sent chip-makers lower on the day.
International markets were mixed over the past week. Japan’s Nikkei 225 fell 0.83%; Germany’s DAX 30 fell 0.06%; and, Britain’s FTSE 100 fell 0.32%. In Europe, the British pound moved significantly lower after Prime Minister Theresa May failed to win a majority in Parliament despite calling for an early election. In Asia, Japan’s first-quarter gross domestic product growth was revised lower to a 1% annual rate, which sent shares lower on the week.
The S&P 500 SPDR (ARCA: SPY) fell 0.31% over the past week. After rising to R1 resistance at $237.22 earlier this month, the index has trended mostly sideways since then. Traders should watch for a breakout from upper trend line resistance at around $245.00 to R2 resistance at $246.30 or a move lower to the pivot point at $239.65. Looking at technical indicators, the RSI remains in overbought territory at 64.51, while the MACD remains in a bullish uptrend dating back to late-May of this year.
The Dow Jones Industrial Average SPDR (ARCA: DIA) rose 0.32% over the past week. After breaking out from an ascending triangle late last month, the index has risen to its R1 resistance at $212.20. Traders should watch for a breakout to R2 resistance at $214.39 or a move lower to re-test its trend line support at around $210.00. Looking at technical indicators, the RSI appears overbought at 68.38 while the MACD remains in a bullish uptrend that appears to be moderating over the past few weeks.
The PowerShares QQQ Trust (NASDAQ: QQQ) fell 2.43% over the past week, making it the worst-performing major index. After briefly breaking out from trend line resistance, the index moved sharply lower to its pivot point at $139.67. Traders should watch for a rebound toward its trend line and R1 resistance at $143.46 or a further breakdown to S1 support at $137.49. Looking at technical indicators, the RSI moderated to a neutral 51.09, but the MACD appears on the cusp of a bearish crossover.
The iShares Russell 2000 Index ETF (ARCA: IWM) rose 1.19% over the past week, making it the best-performing major index. After breaking out from R1 resistance at $139.70, the index rose briefly to R2 resistance at $143.07 before giving up some ground. Traders should watch for a breakout from R2 resistance to new highs or a move lower to re-test R1 support at $139.70. Looking at technical indicators, the RSI appears lofty at 65.10, but the MACD remains in a bullish trend higher.
The Bottom Line
The major U.S. indexes were mixed over the past week. Next week, traders will be watching several key economic indicators including the Federal Reserve’s FOMC meeting on June 13-14, industrial production on June 15, and consumer sentiment on June 16. The market will also be keeping a close eye on the evolving political situation in the United States and the United Kingdom where leadership continues to experience difficulties.
Note: Charts courtesy of StockCharts.com. As of the time of writing, the author had no holdings in the securities mentioned.