S&P 500 ETFs Battle 50-Day Moving Average

April 13th at 8:51am by John Spence

Equity bulls managed to hold the line this week at the 50-day moving average for the S&P 500 but they have their work cut out for them Friday on slowing economic growth in China and concerns over U.S. bank earnings.

SPDR S&P 500 (NYSEArca: SPY), the largest ETF by assets, has bounced the past two days but was set for a lower open Friday.

“The S&P 500 has regained a footing above its 50-day exponential moving average. Internal health has improved sharply over the past two sessions with the percentage of stocks trading above their 10-week moving average jumping back above 50%,” said Tarquin Coe, technical analyst at Investors Intelligence.

“So far both the price and breadth recovery is looking similar to that of mid-December 2012. A reassertion of the general uptrend looks to be underway and only a close beneath Tuesday’s low of 1357.38 would call for a reassessment,” Coe said in a strategy note Friday.

The S&P 500 has rallied 11% year to date although the blue-chip index is in negative territory for April on weak U.S. jobs data and speculation that further stimulus from the Federal Reserve may not be in the cards. [Stock ETF Rally Stalling in April]

Financial sector ETFs were poised to open lower Friday after quarterly results from JP Morgan (NYSE: JPM) and Wells Fargo (NYSE: WFC). [Financial ETFs Slip on Earnings]

Separately, China said first-quarter economic growth rose 8.1%, a bit below expectations. [China GDP]

SPY was down 0.3% in Friday’s premarket. S&P futures were trading just south of 1380.

SPDR S&P 500

Full disclosure: Tom Lydon’s clients own SPY.

The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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