The major U.S. indexes moved sharply higher over the past week despite a couple of concerning economic indicators. On Wednesday, the Census Bureau reported an unexpected 0.3% drop in January retail sales along with a sharp downward revision in December’s figures. The Consumer Price Index (CPI) also rose an unexpected 0.5% month over month and 2.1% year over year, which sparked concerns that the Federal Reserve could hike rates more quickly.
International markets were also higher over the past week. Japan’s Nikkei 225 rose 0.55%; Germany’s DAX 30 rose 2.58%; and Britain’s FTSE 100 rose 2.86%. In Europe, industrial production rose more than expected in December, which helped power the fastest economic growth rate in a decade. In Asia, investors have been expressing increasing concern over growing corporate and household debt levels that could derail the region’s growth.
The SPDR S&P 500 ETF rose 4.44% over the past week. After falling to S2 support at $259.41 earlier this month, the index rose past S1 and 50-day moving average resistance levels at $271.81 this week. Traders should watch for a breakout to the pivot point at $278.64 or a breakdown to retest S2 support on the downside. Looking at technical indicators, the relative strength index (RSI) rose to neutral levels of 51.62, while the moving average convergence divergence (MACD) could see a near-term bullish crossover following its bearish crossover in late January. (See also: 12 Stocks to Buy for Market’s Upturn: Goldman Sachs.)
After experiencing sharp declines, the major U.S. indexes rebounded over the past week. …read more
Read more here: Stocks Post Strong Recovery Following Market Drop
Category: SPY, DIA, QQQ, IWM