S&P 500 Index Chart
Thanks mainly to the initiative of a few enlightened lady senators who helped thrash out a temporary resolution, the debt-ceiling imbroglio has been postponed to the beginning of 2014. The daily bar chart pattern of S&P 500 celebrated in relief and rose to touch a new life-time high.
Despite being supported by rising trading volumes, the rally has been a bit too sharp and the index is trading more than 130 points above its rising 200 day EMA. Such a large difference between the index level and its 200 day EMA has often led to sharp corrections.
Daily technical indicators are bullish. MACD is rising above its signal line in positive territory. RSI has moved up close to the lower edge of its overbought zone. Slow stochastic has entered its overbought zone. However, all three indicators are showing negative divergences by failing to reach new highs with the index.
Stay invested but be prepared for a correction.
FTSE 100 Index Chart
The 6 months daily bar chart pattern of FTSE 100 index shows a relief rally due to the resolution of the US government shutdown and debt-ceiling impasse. The index regained the 6600 level. The 20 day EMA is about to cross above the 50 day EMA. The sharp bull market correction is over.
Daily technical indicators are looking bullish. MACD has crossed above its signal line into positive territory. RSI is rising towards its overbought zone. Slow stochastic has entered its overbought zone.
Trading volumes have picked up. The rally is likely to continue.
Bottomline? 6 months daily bar chart patterns of S&P 500 and FTSE 100 indices have recovered from bull market corrections. The US index has touched a life-time high. The UK index is back in bull territory. Stay invested.
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