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U.S. Stocks Post Gains to Start 2017, CI Market Dashboard Holds Steady

Weekly Market Summary

U.S. stocks rang in the new year in style this week, posting strong gains that pushed multiple indexes to new all-time highs.

The Dow Jones Industrial Average (DJIA) tacked on just over 1% this week to close at a 19,963.80. On Friday, the blue-chip index hit a new all-time intraday high of 19,999.63 but was not able to close above the highly anticipated 20,000 mark. As a result, we continue to see the 20,000 mark as upside resistance. The 19,500 mark may offer the first level of near-term support, followed by the 19,250 level.

The S&P 500 Index (SPX) closed at 2,276.98 on Friday after adding 1.7% for the week. The large-cap also hit a new intraday high on Friday but was unable to close at a new all-time high. The index did close above 2,275, which we had been viewing as a near-term resistance level. We will have to see if that turns into support moving forward. Below that, we look to the 2,200 to 2,215 level for support, as this range offered resistance previously. The 50-day moving average may also offer support around the 2,200 level.

This week, all 10 of the S&P Sector SPDRs posted gains. Health care (XLV) was the strongest sector, gaining 2.9% as congressional Republicans start debating the future of Obamacare. Utilities (XLU) were the weakest, adding 0.5% after several Federal Reserve officials spoke this week above future interest rate hikes. Technology (XLK) posted a 2.2% increase this week.

The broad market Wilshire 5000 (W5000) climbed 1.7% this week to 23,816.56, a new all-time high close. The index broke through resistance at the 23,750 level so we will wait to see if this turns into near-term support. Below that is the 50-day moving average around the 23,000 level.

The tech-laden Nasdaq Composite (COMP) added 2.6% this week to close at 5,521.06. Earlier on Friday, the index notched a new intraday high. Now that the index has moved above the 5,400 level, which had been a tripping point, we wait to see if that turns into downside support. Also to the downside is the 50-day moving average around 5,340.

The Russell 2000 (RUT) index of smaller stocks lagged its peers this week, posting a 0.7% gain to close at 1,367.28. We continue to view the 1,400 as upside resistance. The index has been trading in the 1,350 to 1,400 range for a few weeks and any breakout above or below that range may mark the start of a broader move. To the downside, we look for initial support around 1,350, where previous resistance may become support. Below that is the 50-day moving average around 1,310.

The CBOE Volatility Index (VIX) fell 19.4% this week to 11.32.

Computerized Investing Market Dashboard Indicators

This week, none of the Market Dashboard indicators triggered new bearish or bullish signals. In addition, none of the indicators triggered confirming bullish or bearish signals.

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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