ChartAdvisor for October

Commentary Major U.S. indices moved lower over the past week, as of early trading on Friday morning. Weakness in the manufacturing sector - both in the U.S. and overseas - sent stocks lower early during the week. These trends were partially reversed at the end of the week, when the Bureau of Labor Statistics (BLS) announced that the economy added 248,000 jobs in September, sending the unemployment rate down to just 5.9%. With an average of 227,000 jobs added in the first nine months of 2014, the economy appears on stable footing. International markets followed U.S. markets lower, as of early trading on Friday morning. Japan’s Nikkei 225 fell 3.23%; Britain’s FTSE 100 fell 1.85%; and Germany’s DAX 30 fell 6.16%. In Europe, European Central Bank (ECB) President Mario Draghi failed to provide enough detail about a new stimulus program, which ended up sending stocks lower as investors remained nervous. In Asia, investors have been anxious about Hong Kong protesters and weakness in Japan’s data readings.

SPDR S&P 500 (SPY) The SPDR S&P 500 (SPY) ETF fell 0.88%, as of early trading on Friday morning. After falling below its 50-day moving average at 196.90, the index rebounded from its lower trend line and S1 support at 194.75. Traders should watch for a move back above its 50-day moving average and pivot point or a move below its S1 support and lower trend line to S2 support at 192.47. Looking at technical indicators, the relative strength index (RSI) appears slightly oversold but the MACD remains in a bearish downtrend.

SPDR Dow Jones Industrial Average (DIA) The SPDR Dow Jones Industrial Average (DIA) ETF fell 0.96%, as of early trading on Friday morning. After falling below its 50-day moving average at 168.63, the index rebounded back above its S1 support at 168.23. Traders should watch for a move towards its pivot point at 170.78 or a move back down toward S2 support at 166.40. Looking at technical indicators, the RSI appears neutral at 46.86 but the MACD remains in a prolonged bearish downtrend.

PowerShares QQQ (Nasdaq:QQQ) The PowerShares QQQ (QQQ) ETF fell 0.53%, as of early trading on Friday morning. After breaking below its lower trend line and pivot point at 99.02, the index moved slightly higher. Traders should watch for a breakout back toward its R1 resistance at 100.34, or a move back down toward its S2 support at 96.15. Looking at technical indicators, the RSI remains neutral at 47.65 while the MACD remains in a bearish downtrend.

iShares Russell 2000 (NYSE:IWM) The iShares Russell 2000 (IWM) ETF fell 0.86%, as of early trading on Friday morning. After moving below its 50- and 200-day moving averages, the index rebounded from its S1 support at around 106.61. Traders should watch for an ongoing rebound toward the pivot point at 112.05 or a move below the S1 support and lower trend line toward S2 support at 103.88. Looking at technical indicators, the RSI is slightly oversold at 40.96 but the MACD remains in a downtrend.