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Mixed Economic Data & Geopolitics Highlight Down Week for U.S. Stocks

Weekly Market Summary

Mixed economic data and geopolitics pushed and pulled the markets throughout the week. Weaker-than-expected car sales data kicked off a week that saw a strong report on private-sector hiring give way to a mixed March jobs report. In between was the release of the Fed’s March meeting minutes that revealed the central bank’s intent to reduce its massive balance sheet and a U.S. missile strike in Syria.

The Dow Jones Industrial Average (DJIA) succumbed to late-session selling on Friday to end the week down 0.03% at 20,656.10. The blue-chip index has traded within a 370-point range for the last several trading sessions, an indication of uncertainty in the marketplace. This is often a precursor to a strong move, although we are unsure whether it will be the bulls or bears that take the reins. The index seems bounded at the upper end around 20,750 and the 50-day moving average (20,604.50) to the downside. The moving average has been holding for the last two weeks so we do view it as a viable support level.

The S&P 500 Index (SPX) fell 0.3% this week to close at 2,355.54. There appears to be resistance building around 2,375 as the large-cap index has been trading in a narrow range for the last several sessions. To the downside is the 50-day moving average at 2,346.89. Below that is round-number support at 2,300.

This week, seven of the 10 S&P Sector SPDRs posted gains. Real Estate (XLRE) led the way with a 0.7% gain, followed by Energy (XLE), which added 0.66% after missile strikes in Syria boosted oil prices. Financials (XLF) lagged all other sectors this week, falling 0.88%. Consumer Discretionary (XLY) stocks were also weak, dropping 0.78% for the week.

The broad market Wilshire 5000 (W5000) lost 0.36% this week to close at 25,535.23. The index has been repeatedly testing its 50-day moving average over the last several trading sessions. Thus far, it has held, so we view it as meaningful support to the downside. The average currently is at 24,465.14. To the upside, there appears to be resistance forming around the 24,750 level.

The tech-heavy Nasdaq Composite (COMP) shed 0.6% this week, although the index managed another record high on Wednesday. The index now stands at 5,877.81. It has been unable remain above the 5,900 mark, so we view that level as upside resistance. To the downside is the 50-day moving average at 5,814.54.

The Russell 2000 (RUT) index of smaller stocks lagged the other major U.S. indexes this week, falling 1.54% to 1,364.56. The index once again fell below its 50-day moving average this week. To the downside, we continue to view the 1,340 level as initial support. To the upside, it seems that resistance is forming around the 1,390 level.

The CBOE Volatility Index (VIX) tacked on 4.0% this week to close at 12.87.

Computerized Investing Market Dashboard Indicators

This week, one of the CI Market Dashboard Indicators triggered a new neutral signal, shifting from bullish. However, none of the Dashboard indicators triggered confirming bearish or bullish signals this week.

To see the current signals of all the dashboard indicators, visit the CI Market Dashboard.

The Market Dashboard is one of the many benefits of Computerized Investing, a service from AAII that harnesses the power of technology to help individual investors become more effective managers of their own portfolios. To learn more about Computerized Investing, visit http://www.aaii.com/computerized-investing/about

 

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