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Monday, January 11, 2016

Stock Index Chart Patterns: S&P 500 and FTSE 100 – Jan 08, 2016

S&P 500 Index Chart



The following comment was made in last week's post on the daily bar chart pattern of S&P 500: "The index may once again fall down into bear territory - below its three daily EMAs."

So it did - and how?! The index dropped like a stone below the 1920 level and just managed to close above it - losing 120 points (almost 6%) on a weekly closing basis.

It was the worst start in the first trading week of a calendar year for many years. Strong volumes, and the 'death cross' of the 50 day EMA below the 200 day EMA indicate bears are regaining control of the chart.

Daily technical indicators are bearish and showing downward momentum, but looking oversold. Some more correction is possible. Any technical bounce may be used by bears to sell again.

On longer term weekly chart (not shown), the index closed well below its 20 and 50 week EMAs, but more than 100 points above its rising 200 week EMA in a long-term bull market. Weekly technical indicators have entered bearish zones and showing downward momentum.

FTSE 100 Index Chart



Readers were adequately warned in last week's post on the daily bar chart pattern of FTSE 100: "The index is expected to fall down below its 50 day and 20 day EMAs."

The fall was sharp, and backed by heavy volumes (not shown). The index dropped briefly below the 5900 level before closing just above it - losing 330 points (more than 5%) on a weekly closing basis.

The index is once again trading below its three falling EMAs in a bear market.
Daily technical indicators are bearish, and beginning to look oversold. Any technical bounce will probably be used by bears to sell.

On longer term weekly chart (not shown), the index closed well below all three weekly EMAs in a long-term bear market. The 50 week EMA is hurtling down towards the 200 week EMA. Weekly technical indicators are in bearish zones and showing downward momentum.

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