The major U.S. indexes were mixed over the past week, with industrials outperforming tech stocks. Without President Trump’s promised tax and spending programs, the stock market has struggled to maintain its lofty expectations for growth over the coming year. The Bloomberg U.S. Economic Surprise Index, which measures whether economic data beat expectations, fell below zero for the first time this year, signaling potential troubles ahead.
International markets were mixed over the past week. Japan’s Nikkei 225 fell 0.35%; Germany’s DAX 30 fell 0.49%; and Britain’s FTSE 100 fell 0.95%. In Europe, leaders are worried about new U.S. sanctions on Russia that target the country’s new gas pipeline to Europe, and they threatened retaliation if the measures harm the Eurozone economy. In Asia, the International Monetary Fund boosted its forecast for China’s growth rate to 6.7% due to policy support. (For more, see: Opinion: How Precarious Is China’s Economy?)
The S&P 500 SPDR (ARCA: SPY) fell 0.32% over the past week. Since reaching its pivot point earlier this month, the index has traded sideways between its pivot point and upper trendline resistance. Traders should watch for a breakout from trendline and R2 resistance at $245.10 or a breakdown from the pivot point, 50-day moving average and lower trendline resistance at around $238.50. Looking at technical indicators, the relative strength index (RSI) remains in overbought territory at 62.49, while the moving average convergence divergence (MACD) could see a bearish crossover in the near term. (See also: Why the S&P Will Rise: A Look at the Numbers.)
The Dow Jones Industrial Average SPDR (ARCA: DIA) rose 0.39% over the past week, making it the best performing major index. After breaking out from R1 resistance at $211.81 earlier this month, the index moved to upper trendline resistance. Traders should watch for a breakout from upper trendline and R2 resistance at $214.00 to new highs or a move below R1 support to its pivot point at $208.42. Looking at technical indicators, the RSI appears overbought at 71.57, while the MACD remains in a steady uptrend. (For more, see: Top 3 ETFs That Track the Dow.)
The PowerShares QQQ Trust (NASDAQ: QQQ) fell 1.29% over the past week, making it the worst performing major index. After breaking down from the pivot point at $139.29, the index moved to lower trendline resistance at around $138.00. Traders should watch for a breakdown to S2 support at $133.33 or a rebound above the pivot point to R1 resistance at $143.07. Looking at technical indicators, the RSI appears neutral at 44.36, but the MACD experienced a bearish crossover that could signal more downside ahead. (See also: Tech ETFs Feel the Outflows.)
The iShares Russell 2000 Index ETF (ARCA: IWM) fell 1.01% over the past week. After breaking out from R1 resistance at $139.70, the index moved to its upper trendline resistance before giving up some ground. Traders should watch for a rebound to upper trendline and R2 resistance at $143.07 or a breakdown from R1 support to the 50-day moving average at $138.40. Looking at technical indicators, the RSI appears neutral at 55.31, while the MACD could see a bearish crossover next week. (For related reading, check out: Inklings of Outflows From US ETFs.)
The Bottom Line
The major U.S. indexes were mixed over the past week, as the tech industry continued to struggle. Next week, traders will be watching several upcoming economic indicators, including existing home sales on June 21, jobless claims on June 22 and new home sales on June 23. The market will also be keeping an eye on the ongoing political drama gripping the United States, as well as how the housing market responds to rising interest rates.
Note: Charts courtesy of StockCharts.com. As of the time of writing, the author had no holdings in the securities mentioned.