Chart Advisor

Chart Advisor for March 7, 2016 (SPY, DIA)
Anthony Jerdine | March 07, 2016

The U.S. markets moved higher over the past week, as of Thursday’s close, led by small-cap stocks in the Russell 2000. While consumer spending rose and labor markets improved, the manufacturing and energy sectors continued to show weakness. Wage growth also varied considerably throughout the nation and consumer prices remained stubbornly flat. That said, some experts believe that a rate hike or two may be back on the table for 2016.

International markets also moved mostly higher over the past week, as of Thursday’s U.S. close. Japan’s Nikkei 225 rose 4.02%; Germany’s DAX 30 rose 2.51%; and, Britain’s FTSE 100 fell 0.37%. In Europe, a series of economic reports suggested that growth was continuing to slow ahead of the ECB’s rate decision next week. In Asia, China’s President Xi Jinping announced a series of economic measures that sounded a lot closer to Reagan than Mao.

The S&P 500 SPDR (ARCA: SPY) rose 2.39% over the past week, as of Thursday’s close. After breaking through its 50-day moving average at 193.78, the index reached its R1 resistance at 199.80. Traders should watch for a breakout toward its 200-day moving average at 201.01 or a move lower to its 50-day moving average. Looking at technical indicators, the RSI appears a bit lofty at 62.90, while the MACD remains in a bullish uptrend since its crossover back in mid-February.

SPY Chart

The Dow Jones Industrial Average SPDR (ARCA: DIA) rose 1.85% over the past week, as of Thursday’s close. After breaking out from its 50-day moving average at 169.35, the index reached its 200-day moving average at 170.00. Traders should watch for a breakout to R2 resistance at 175.80 or a move lower to its 50-day moving average. Looking at technical indicators, the RSI appears a bit lofty at 61.60, while the MACD remains in a bullish uptrend.

DIA Chart

The PowerShares QQQ Trust (NASDAQ: QQQ) rose 2.12% over the past week, as of Thursday’s close. After moving higher from its pivot point at 100.71, the index moved towards its R1 resistance at 106.59. Traders should watch for a move higher to its 200-day moving average at 107.64 or a move lower back toward its pivot point. Looking at technical indicators, the RSI appears modestly overbought at 59.05, while the MACD remains in a bullish uptrend.

QQQ Chart

The iShares Russell 2000 Index ETF (ARCA: IWM) rose 3.81% over the past week, as of Thursday’s close. After breaking out from its 50-day moving average at 103.39, the index reached its upper trend line resistance. Traders should watch for a breakout toward its R2 resistance at 110.52 or a move back down to its 50-day moving average. Looking at technical indicators, the RSI appears lofty at 66.25, while the MACD remains in a bullish uptrend.

IWM Chart

The Bottom Line
The major indexes moved higher over the past week, as of Thursday’s close, although the small-cap Russell 2000 appears a bit lofty. Next week, traders will be watching a number of key economic indicators, including crude oil inventories on March 9, unemployment claims on March 10, and consumer sentiment data on March 11. The ECB is also due to make a decision on whether or not to introduce new stimulus measures to bolster the regional economy.

Charts courtesy of StockCharts.com.

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