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Monday, March 16, 2015

Stock Index Chart Patterns: S&P 500 and FTSE 100 – Mar 13, 2015

S&P 500 Index Chart

SPX_Mar1315

Bearish technical indicators in last week’s analysis of the daily bar chart pattern of S&P 500 had hinted at a continuation of the corrective move. The index dropped sharply below its 50 day EMA, but bounced up after receiving good support from the lower edge of the large ‘rising wedge’ pattern.

Note that the 50 day EMA is providing resistance, and daily technical indicators are in bearish zones. So, a fall below the ‘wedge’ is a likely outcome. Support from the rising 200 day EMA may get tested.

Can the index fall below the 200 day EMA? The possibility can’t be ruled out – considering what had happened back in Oct ‘14.

On longer term weekly chart (not shown), the index received support from its 20 week EMA, and closed above its three weekly EMAs in a long-term bull market, but has closed lower for the third straight week. Strong volumes may be an indication that ‘smart money’ is moving out. Weekly technical indicators are in bullish zones but showing downward momentum.

FTSE 100 Index Chart

FTSE_Mar1315

The daily bar chart pattern of FTSE 100 broke down below the bearish ‘rising wedge’ pattern and plummeted to test support from its 200 day EMA. The index bounced up but faced resistance from its 50 day EMA.

Daily technical indicators are in bearish zones. MACD is falling below its signal line, and entered negative territory. ROC is below its 50% level. Slow stochastic is trying to emerge from its oversold zone.

The index may fall below its 200 day EMA. The up trend line connecting the Dec ‘14 and Jan ‘15 lows may provide some support on the downside.

On longer term weekly chart (not shown), the index received support from its 50 week EMA and closed exactly on its 20 week EMA. It is trading well above its rising 200 week EMA in a long-term bull market. Weekly technical indicators are in bullish zones, but showing downward momentum.

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