NEW YORK (TheStreet) -- Investors have brushed off the unexpected 1% decline in first-quarter gross domestic product, the continued below-neutral readings for consumer sentiment, and Friday's weaker-than-expected consumer spending release.
In my view, however, these negative reports more than offset better-than-expected purchasing manager readings, because the consumer represents about 70% of the economy.
That means the Federal Reserve is likely to keep the federal funds rate at 0% to 0.25% longer than previously expected, and easy money has been a positive for both stocks and bonds.
Even so, broad measures of the stock and bond markets are becoming overbought on their weekly charts, and investors may want to book profits now before a potential June swoon.
The five key U.S. equities indices are ending May in sync with positive weekly chart profiles, but only the S&P 500 and Dow transports set new highs on Thursday. The Dow Jones Industrial Average set its all-time high in mid-May with the Nasdaq and Russell 2000 setting multiyear and all-time highs in early March.
One twist is that the Wall Street call to "avoid bonds" has been wrong this year.
Even as the S&P 500 and Dow Jones transport index are setting new all-time highs going into the end of May, the exchange-traded fund that tracks long-term U.S. Treasury bonds (iShares 20+ Year Treasury Bond ETF (TLT) - Get Report) has fared even better.
Investors with ETF portfolios should include a bond ETF in their holdings, as these ETFs allow investors to gain exposure to the bond market with a security that trades just like a stock.
Two "Crunching the Numbers" tables follow profiles of ETFs that track broad markets. Note that all of these ETFs are above their five key moving averages, a sign of upward momentum.
SPDR Dow 30 ETF (DIA) - Get Report ($166.78, up just 0.8% YTD) set an all-time intraday high at $167.29 on May 13 after trading below its 200-day simple moving average with a 2014 low at $153.12 on Feb. 5.
The weekly chart for this ETF, which is also known as "Diamonds," is positive but overbought with its five-week modified moving average at $164.65. Quarterly and semiannual value levels are $164.18 and $162.05, respectively, with semiannual and monthly risky levels at $167.82 and $173.79, respectively.
SPDR S&P 500 ETF (SPY) - Get Report ($192.37, up 4.2% YTD) set an all-time intraday high at $192.40 on Thursday and is well above its 200-day SMA at $179.56. The S&P Spider has not been below its 200-day since November 2012.
The weekly chart is positive but overbought with its five-week MMA at $188.27. Quarterly and semiannual value levels are $185.03 and $179.50, respectively, with a monthly risky level at $200.33.
PowerShares QQQ Trust ETF (QQQ) - Get Report ($91.30, up 4.2% YTD) set a multiyear intraday high at $91.36 on March 7 and is knocking on the door for a new high Friday. This ETF, which tracks the Nasdaq 100, is being helped by the resurgence of the momentum stocks such as Apple (AAPL) - Get Report and Google (GOOGL) - Get Report. This ETF has been above its 200-day SMA since January 2013.
The weekly chart is positive with its five-week MMA at $88.37. Quarterly and semiannual value levels are $83.62 and $80.72, respectively, with a monthly risky level at $96.62.
iShares Transportation ETF ($145.35, up 10 YTD) set an all-time intraday high at $145.36 on Thursday and has been above its 200-day SMA since December 2012.
The weekly chart is positive but overbought with its five-week MMA at $139.31. Quarterly and semiannual value levels are $132.17 and $131.89, respectively, with a monthly risky level at $149.61.
iShares Russell 2000 ETF (IWM) - Get Report ($113.37, down 1.7% YTD) set an all-time intraday high at $120.58 on March 4. Since April 15, this ETF, which tracks a well-known small-cap index, has traded back and forth around its 200-day SMA since, and that SMA is now at $111.19.
The weekly chart is positive given a close today above its five-week MMA at $112.33. Semiannual and annual value levels are $112.56 and $96.09, respectively, with quarterly and monthly risky levels at $115.72 and $125.10, respectively.
The weekly chart is positive but overbought with its five-week MMA at $111.81. A monthly value level is $109.23 with an annual pivot at $114.98 and quarterly and annual risky levels at $115.64 and $116.12, respectively.
Crunching the Numbers With Richard Suttmeier: Moving Averages & Stochastics
This table provides the technical status for the stocks profiled in today's report.
There are five columns with moving average titles: Five-Week Modified Moving Average; 21-Day Simple Moving Average; 50-Day Simple Moving Average; 200-Day Simple Moving Average; and the 200-Week Simple Moving Average.
The column labeled 12x3x3 Weekly Slow Stochastics shows the pattern on each weekly chart with a reading of oversold, rising, overbought, declining or flat.
Interpretations: Stocks below a moving average are listed in red.
Five-Week Modified Moving Average (MMA) is one of two indicators that define whether a weekly chart profile is positive, neutral or negative. The other is the status of the 12x3x3 weekly slow stochastic.
A stock with a positive technical rating is above its five-week MMA with rising or overbought stochastics.
A stock with a negative technical rating is below its five-week MMA with declining or oversold stochastics.
A stock with a neutral technical rating has a profile that is not positive or negative.
The 200-Week Simple Moving Average (SMA) is considered a long-term technical support or resistance level and as a "reversion to the mean" over a rolling three- to five-year horizon. (Even Apple (AAPL) - Get Report declined to its 200-week SMA in June 2013.)
The 21-Day Simple Moving Average is a short-term technical support or resistance used by many hedge fund traders to adjust positions. A stock above its 21-day SMA will likely move higher over a rolling three- to five-day horizon and vice versa.
The 50-Day Simple Moving Average is also a technical support or resistance used by many strategists and commentators in financial TV.
The 200-Day Simple Moving Average is another technical support or resistance level, and I consider this level as a shorter-term "reversion to the mean" over a rolling six- to 12-month horizon. (Even Apple tested or crossed its 200-day SMA in nine of the last 10 years.)
Crunching the Numbers With Richard Suttmeier: Earnings & Where to Buy & Where to Sell
This table presents the EPS estimates including date and before or after the close, and where to buy on weakness and where to sell on strength.
"EPS Date" is the day the company reports its quarterly results.
"EPS Estimate" is the EPS estimate from Wall Street analysts.
Value Levels, Pivots and Risky Levels are calculated based upon the last nine weekly closes (W), nine monthly closes (M), nine quarterly closes (Q), nine semiannual closes (S) and nine annual closes (A). I have one column for pivots, which is a magnet for the period shown. The columns to the left of the pivots are first and second value levels. The columns to the right of the pivots are first and second risky levels.
Investors who wish to buy a stock should use a good-'til-canceled limit order to buy weakness to a value level. Investors who want to sell a stock should use a GTC limit order to sell strength to a risky level.
At the time of publication the author held no positions in any of the stocks mentioned.
>>Read More: Xerox Is the Biggest Secret in Value Stocks
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff
Richard Suttmeier is the chief market strategist at
ValuEngine.com. He has been a professional in the U.S. Capital Markets since 1972, transferring his engineering skills to the trading and investment world.
Suttmeier has an engineering degree from Georgia Tech and a Master of Science degree from Brooklyn Poly. He began his career in the financial services industry in 1972 trading U.S. Treasury securities in the primary dealer community. He became the first long bond trader for Bache in 1978, and formed the Government Bond Department at LF Rothschild in 1981, helping establish that firm as a primary dealer in 1986. This experience gives him the insights to be an expert on monetary policy, which he features in his newsletters, and market commentary.
Suttmeier's industry licenses include, Series 7 and Registered Principal (Series 24). He has been the Chief Market Strategist for ValuEngine.com since 2008 and often appears on financial TV.
Click here for details on Suttmeier's "Buy and Trade" investment strategy.
Richard Suttmeier can be reached at RSuttmeier@Gmail.com