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Monday, January 18, 2016

Stock Index Chart Patterns: S&P 500 and FTSE 100 – Jan 15, 2016

S&P 500 Index Chart



The following comment appeared in last week's post on the daily bar chart pattern of S&P 500"Strong volumes, and the 'death cross' of the 50 day EMA below the 200 day EMA indicate bears are regaining control of the chart."

The index dropped with strong volumes to a 52 week intraday low of 1858 on Fri. Jan 15 '16, but bounced up to close at 1880 - losing 2.1% on a weekly closing basis.

All three EMAs are falling, and the index is trading below them in bear territory. But the fall has been a bit too steep. Daily technical indicators are looking bearish and oversold, which can lead to a technical bounce.

On longer term weekly chart (not shown), the index closed well below its 20 and 50 week EMAs, but nearly 70 points above its rising 200 week EMA. The long-term bull market is still intact. Weekly technical indicators are in bearish zones and showing strong downward momentum.

FTSE 100 Index Chart



The following comment appeared in last week's post on the daily bar chart pattern of FTSE 100: "Daily technical indicators are bearish, and beginning to look oversold. Any technical bounce will probably be used by bears to sell."

FTSE briefly rallied past the 6000 level during the week before succumbing to bear selling. The previous low of 5768, touched on Aug 24 '15, was tested on Fri. Jan 15 '16 but not breached.

The index bounced up to close above the 5800 level, losing 1.8% on a weekly closing basis. At the time of writing this post, the index is trading below the 5800 level after touching a 3 year low of 5766.

All three EMAs are falling, and the index is trading below them in a bear market. Daily technical indicators are again looking oversold. That doesn't mean that the index won't fall lower.

On longer term weekly chart (not shown), the index closed well below its three weekly EMAs in a bear market. The imminent 'death cross' of the 50 week EMA below the 200 week EMA will technically confirm a long-term bear market. Weekly technical indicators are in bearish zones and looking oversold.

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