The major U.S. indexes moved lower over the shortened holiday week, with technology stocks falling more sharply than industrials. While there was relatively little in the way of economic reports last week, pending home sales posted a modest 0.2% gain, suggesting that they are not in line with the strength of final sales of existing homes. Investors will be keeping a close eye on the housing market moving into the new year given the significant gains seen throughout 2017 and the fact that housing tends to be a major driver of other economic factors.
International markets were mixed over the past week. Japan’s Nikkei 225 fell 0.6%; Germany’s DAX 30 fell 1.23%; and Britain’s FTSE 100 rose 1.44%. In Europe, officials suggested that the European Central Bank’s bond buying program would not be extended when it expires in September as inflation has continued to rebound. In Asia, investors have been growing increasingly concerned that China’s tightening could constrain its growth outlook and drag down global economic growth moving into the new year.
The SPDR S&P 500 SPDR ETF fell 0.24% over the past week. After trending along R1 resistance at $267.46, the index broke down from key support levels this week. Traders should watch for a further breakdown to the pivot point and 50-day moving average at around $260.46 or a rebound to retest trendline resistance at around $269.50. Looking at technical indicators, the relative strength index (RSI) remains near overbought territory at 63.91, while the moving average convergence divergence (MACD) experienced a bearish crossover that could suggest further downside ahead. (See also: Stock Returns May Top 10% in 2018 Led By Big Banks.)
Weekly technical summary of the major U.S. indexes. …read more
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Category: SPY, DIA, IWM, QQQ