The major stock market indexes moved largely higher over the past week except for the Dow Jones Industrial Average that moved marginally lower. Over the past month, the Conference Board’s leading economic index rose 0.1% following a 0.2% gain in the prior month, signaling that the economy remains on strong footing. Financial stocks have performed particularly well since the case for rising interest rates has strengthened, which could boost net interest margins.
International markets followed the U.S. markets lower over the past week. Japan’s Nikkei 225 rose 3.47%; Germany’s DAX 30 fell 0.03%; and, Britain’s FTSE 100 rose 0.77%. In Europe, a recent Reuters poll found that economists still believe the regional economy will grow at a modest pace despite an Italian referendum and other political risks on the horizon. In Asia, investors remain nervous about the impact of Donald Trump’s victory on the Chinese economy over the long-term.
The S&P 500 SPDR (ARCA: SPY) rose 0.96% over the past week. After breaking out from its upper trend line resistance, the index hit its R2 resistance at 218.98. Traders should watch for a breakout above R2 resistance or a breakdown below the trend line resistance. Looking at technical indicators, the RSI appears modestly overbought at 63.31, while the MACD experienced a bullish crossover that could signal further gains ahead.
The Dow Jones Industrial Average SPDR (ARCA: DIA) fell 0.01% over the past week, making it the worst performing major index. After breaking out from its upper trend line resistance, the index began trending sideways at just below $190.00. Traders should watch for a breakout to new highs or a retracement back to its trend line resistance. Looking at technical indicators, the RSI appears lofty at 71.22, while the MACD remains in a bullish uptrend.
The PowerShares QQQ Trust (NASDAQ: QQQ) rose 1.31% over the past week. After rebounding from its lower trend line support, the index rebounded to its 50-day moving average at around $117.30. Traders should watch for a breakout to upper trend line resistance at $120.00 or a move lower to its S1 support at $115.40. Looking at technical indicators, the RSI appears neutral at 52.52, but the MACD remains depressed despite its modest bullish crossover.
The iShares Russell 2000 Index ETF (ARCA: IWM) rose 2.85% over the past week, making it the best performing major index. After breaking out from its upper trend line resistance, the index surpassed $130.00 to new highs. Traders should watch for an ongoing move to new highs or a retracement back to its R2 support at $127.32. Looking at technical indicators, the RSI appears overbought at 75.42, while the MACD remains in a strong bullish uptrend.
The Bottom Line
The major markets moved higher over the past week except for the Dow Jones Industrial Average. Next week, investors will be closely watching existing home sales on Nov. 22, as well as jobless claims and the FOMC minutes on Nov. 24. Investors will also be keeping an eye on the Trump administration appointments over the coming weeks to get an idea of what to expect from the next President of the United States.
Charts courtesy of StockCharts.com.
Disclosure: As of the time of writing, the author had no holdings in the securities mentioned.
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