Stocks Move Sharply Higher, Reach Overbought Conditions

The major U.S. indexes moved higher over the past week across the board, but there were some signs of economic weakness. For instance, December’s retail sales fell a tenth of a point short of analyst consensus forecasts calling for 0.5% growth, and jobless claims rose 11,000 to a higher-than-expected 261,000. The good news is that the overall economy remains largely on track during the fourth quarter and that the lower corporate tax rates could provide a boost to companies’ bottom lines over the coming year.

International markets were mixed over the past week. Japan’s Nikkei 225 fell 1.18%; Germany’s DAX 30 fell 0.56%; and Britain’s FTSE 100 rose 0.71%. In Europe, the regional Economic Sentiment Indicator – a measure of optimism among businesses and consumers – rose to 116.0 in the highest reading since October 2000. In Asia, China’s premier was upbeat on the economy and projected that it grew about 6.9% in 2017, despite concerns about the country’s rising levels of debt that could eventually threaten growth. (See also: China’s Economic Indicators.)

The SPDR S&P 500 ETF rose 1.64% over the past week. After surpassing R2 resistance at $274.13, the index rose to fresh all-time highs over the past week. Traders should watch for a further breakout to fresh highs or a move lower to consolidate above R2 support levels. Looking at technical indicators, the relative strength index (RSI) moved further into overbought territory at 84.12, while the moving average convergence divergence MACD experienced an acceleration of its bullish upswing that could signal greater upside.

Weekly technical summary of the major U.S. indexes. …read more

Read more here: Stocks Move Sharply Higher, Reach Overbought Conditions

Category: SPY, DIA, QQQ, IWM

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