Monday, June 6, 2016

Stock Index Chart Patterns: S&P 500 and FTSE 100 - Jun 03, 2016

S&P 500 index chart


In a holiday-curtailed trading week, the daily bar chart pattern of S&P 500 consolidated sideways within a 20 points range - touching a lower top of 2105 on Jun 2 and ending absolutely flat on a weekly closing basis.

All three EMAs are rising and the index is trading above them in a bull market. However, the index may be in the process of forming a 'double top' reversal pattern.

A 'double top' requires technical confirmation - which will occur only if the index falls convincingly below its 'valley' low of 2026 touched on May 19. A convincing move above the Apr 20 top of 2111 will negate the 'double top'.

Daily technical indicators are in bullish zones, but are not showing any upward momentum. The non-farm payrolls data was well below expectations. That may persuade the US Fed not to raise interest rates for now.

On longer term weekly chart (not shown), the index closed above its three weekly EMAs in a long-term bull market for the 13th week in a row, but has formed a weekly 'doji' candlestick that may end the rally from the May 19 low. Weekly technical indicators are in bullish zones and showing upward momentum, but beginning to look overbought.

FTSE 100 index chart


The daily bar chart pattern of FTSE 100 tried valiantly to remain above its 200 day EMA in bull territory during a holiday-curtailed trading week, but to no avail. 

The index formed a 'reversal day' bar (higher high, lower close) on May 31, and closed below its 200 day EMA with a loss of 1% on a weekly closing basis.

All three daily technical indicators are in bullish zones, but showing very little upward momentum. 'Brexit' (Britain's possible exit from the Eurozone) concerns may be keeping bullish enthusiasm in check.

Expect another week of battle between bulls and bears for dominance of the 200 day EMA.

On longer term weekly chart (not shown), the index closed above its 20 week EMA, but closed below its 50 week and 200 week EMAs in a long-term bear market for the 7th week in a row. Weekly technical indicators are in bullish zones, but not showing much upward momentum. 

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