The daily bar chart pattern of S&P 500 continued its correction from the Apr 20 top of 2111. On Mon. May 2, the index bounced up to close above the 20 day EMA and the 2080 level. Bears used the opportunity to sell.
The index dropped to seek support from its 50 day EMA. On Fri. May 6, the index slipped below its 50 day EMA and the 2040 level intra-day, but bounced up to close at 2057 - forming a 'reversal day' pattern (lower low, higher close).
Daily technical indicators are looking bearish - suggesting that the correction may not be over yet. MACD is falling below its signal line in positive zone. RSI has crossed below its 50% level, but showing signs of turning up. Slow stochastic has entered its oversold zone.
An upward bounce is possible from current level. Bears may use it to sell again.
On longer term weekly chart (not shown), the index closed above its three weekly EMAs in a long-term bull market for the 9th week in a row. Weekly technical indicators are showing downward momentum.
FTSE 100 index chart
The following comments appeared in last week's post on the daily bar chart pattern of FTSE 100: "Some more correction can't be ruled out. Expect downside support from the zone between 6100-6200."
The index dropped below its three EMAs into bear territory and received good support from the zone between 6100-6200. On Fri. May 6, the index touched a low of 6055 intra-day, but recovered to close at 6126 - forming a 'reversal day' bar (lower low, higher close).
Daily technical indicators are in bearish zones. MACD has entered negative territory. RSI is below its 50% level. Slow stochastic is inside its oversold zone.
The index may attempt to bounce up, but bears are unlikely to loosen their grip.
On longer term weekly chart (not shown), the index closed below its three weekly EMAs in a long-term bear market. Weekly technical indicators are turning bearish.