Stock Index Chart Patterns: S&P 500 and FTSE 100 – May 22, 2015

S&P 500 Index Chart

The daily bar chart pattern of S&P 500  traded sideways within a narrow 15 points range during the week gone by. The index touched a new intra-day high of 2135 on Wed. May 20, but formed a small ‘reversal day’ bar pattern (higher high, lower close).

The next day it touched a slightly lower top, forming a small ‘double top’ reversal pattern and closed the week with a paltry 3 points gain. All three EMAs are rising and the index is trading above them in a long-term bull market.

But bearish indications abound. Volumes on Tue. and Wed. – both down days – were the highest during the week. The rally from the May 6 low of 2068 has been accompanied by sliding volumes. All three technical indicators are in bullish zones but showing negative divergences by failing to touch new highs with the index.

The bull market is climbing a wall of technical worries. Stay invested, but be prepared for a sharp correction at any time.

On longer term weekly chart (not shown), the index closed at a lifetime high above its three weekly EMAs in a long-term bull market. Weekly technical indicators are in bullish zones, but showing negative divergences by failing to touch new highs with the index.

FTSE 100 Index Chart

The daily bar chart pattern of FTSE 100 closed higher on all five days of the trading week – ending up well above the 7000 level and its three daily EMAs in bull territory, gaining 1% on a weekly basis.

The index has been trading within a ‘symmetrical triangle’ pattern since touching a lifetime high of 7123 on Apr 27 ‘15. An attempt at an upward breakout from the triangle on Fri. May 22 ended in failure due to lack of volume support.

Daily technical indicators are looking bullish. MACD has crossed above its falling signal line to enter positive zone. RSI has moved above its 50% level. Slow stochastic is rising towards its overbought zone.

Another attempt at an upward breakout from the triangle is likely.

On longer term weekly chart (not shown), the index is trading above its three rising weekly EMAs in a long-term bull market. Weekly technical indicators are in bullish zones, and showing some upward momentum.