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Monday, August 3, 2015

Stock Index Chart Patterns: S&P 500 and FTSE 100 – Jul 31, 2015

S&P 500 Index Chart

S&P 500_Jul3115

The daily bar chart pattern of S&P 500 dropped to test support from the rising 200 day EMA on Mon. Jul 27, and then bounced up sharply above its 20 day and 50 day EMAs with good volume support.

The index closed just above the 2100 level – gaining 1% on a weekly closing basis. The 200 day EMA continues to rise, which is a sign of a bull market.

But the index has been stuck in a 100 points range (between 2040 and 2140) for the past 6 months. Reminded me of Dylan’s song “You ain’t going nowhere.”

Daily technical indicators are in bullish zones, but their upward momentum is waning.

On longer term weekly chart (not shown), the index closed above its three weekly EMAs in a long-term bull market. However, the 20 week EMA may be forming a bearish ‘rounding top’ pattern. Weekly technical indicators are in bullish zones and showing some upward momentum.

Stay invested, with a stop-loss at 2040.

FTSE 100 Index Chart

FTSE_Jul3115

The daily bar chart pattern of FTSE 100 touched a higher bottom of 6496 on Mon. Jul 27 and bounced up smartly with good volume support (not shown on chart) to close above its 20 day EMA – gaining about 1.8% on a weekly closing basis.

However, the index remains below its sliding 50 day and 200 day EMAs in bear territory. A convincing move above the Jul 20 intra-day high of 6813 will reverse the bearish pattern of ‘lower tops and lower bottoms’.

Daily technical indicators are showing bullish signs. MACD has crossed above its signal line in negative zone. RSI and Slow stochastic have just managed to move above their respective 50% levels.

On longer term weekly chart (not shown), the index is trading below its sliding 20 week and 50 week EMAs but closed well above its 200 week EMA, and technically remains in a long-term bull market. Weekly technical indicators are in bearish zones.

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