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Monday, June 13, 2016

Stock Index Chart Patterns: S&P 500 and FTSE 100 - Jun 10, 2016

S&P 500 index chart


The daily bar chart pattern of S&P 500 defied bears by negating the possibility of a 'double top' reversal pattern formation and rose to touch an 11 months high of 2120 on Wed. Jun 8.

Bears fought back, raising concerns of an interest rate hike and 'Brexit'. The index dropped below the 2100 level, where it received good support from its 20 day EMA, but ended the week with a small loss.

The index is trading above its three EMAs in bull territory. Higher volumes on recent down days indicate that bears remain active despite the 300+ points rally from the Feb '16 low.

Daily technical indicators are in bullish zones, but showing downward momentum. All three indicators are showing negative divergences by failing to touch new highs with the index.

The index may tread water till the US Fed's mid-week policy announcement. 

On longer term weekly chart (not shown), the index closed above its three weekly EMAs in a long-term bull market for the 14th week in a row, but has formed a weekly 'reversal bar' (higher high, lower close) that often marks an intermediate top. Weekly MACD and Slow stochastic are looking overbought. RSI is moving sideways above its 50% level.

FTSE 100 index chart


Bulls desperately tried to dominate the daily bar chart pattern of FTSE 100. The index crossed above its three EMAs and the 6300 level during the first three days of the week.

Bears decided enough was enough. The index dropped to seek support from its 200 day EMA on Thu. Jun 9. The next day, it plummeted below its three EMAs and the 6100 level into bear territory - ending the week with a loss of 1.5%.

Daily technical indicators are looking bearish. MACD has dropped to touch its rising signal line in positive zone. RSI has fallen sharply below its 50% level. Slow stochastic formed a 'double top' reversal pattern inside its overbought zone and is falling towards its 50% level.

A possible fall below the 6050 level will confirm a bearish pattern of 'lower tops, lower bottoms'.

On longer term weekly chart (not shown), the index faced strong resistance from its 200 week EMA, formed a 'reversal bar' (higher high, lower close) and closed below its three weekly EMAs in a long-term bear market for the 8th week in a row. Weekly technical indicators have slipped into bearish zones. 

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