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Sunday, November 1, 2015

Stock Index Chart Patterns: S&P 500 and FTSE 100 – Oct 30, 2015

S&P 500 Index Chart

S&P 500_Oct3015

The daily bar chart pattern of S&P 500 received good support from the 2060 level and seemed poised to cross above the 2100 level. However, the index formed a ‘reversal day’ pattern (higher high, lower close) on Fri. Oct 30 and closed just below the 2080 level.

The 20 day EMA has crossed above the 200 day EMA. The ‘golden cross’ of the 50 day EMA above the 200 day EMA will technically confirm a return to a bull market.

Daily technical indicators are bullish but looking overbought. MACD is rising above its signal line inside its overbought zone. RSI faced resistance from the edge of its overbought zone and slipped down a bit. Slow stochastic is moving sideways inside its overbought zone.

Bears may try to fight back as the index approaches its lifetime high of 2135 (touched in May ‘15). Some consolidation or correction can be expected.

On longer term weekly chart (not shown), the index closed higher for the 5th week in a row, and is trading well above its three weekly EMA in a long-term bull market. Weekly technical indicators are looking bullish and showing good upward momentum.

FTSE 100 Index Chart

FTSE_Oct3015

The daily bar chart pattern of FTSE 100 is still trying to break free from a strong bear grip. After quickly crossing above its 20 day and 50 day EMAs at the beginning of the month, the index consolidated sideways with an upward bias for the rest of the month.

The 20 day EMA has moved above the 50 day EMA after staying below it since the beginning of Jun ‘15, but the index is still trading below its 200 day EMA in bear territory.

Technical indicators are in bullish zones, but showing downward momentum. MACD is about to cross below its signal line and drop from its overbought zone. RSI and Slow stochastic are sliding down towards their respective 50% levels.

Bears will continue to dominate as long as the index stays below the 200 day EMA. The possibility of the index dropping below its 20 day and 50 day EMAs once again can’t be ruled out.

On longer term weekly chart (not shown), the index closed below its three weekly EMAs, and is in danger of falling back into a long-term bear market. Weekly MACD and RSI are in bearish zones, but Slow stochastic has stayed above its 50% level.

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