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Monday, July 11, 2016

S&P 500 and FTSE 100 index charts - Jul 08 '16

S&P 500 index chart

The daily bar chart pattern of S&P 500 soared on a better-than-expected employment report for June, rising above the 2130 level on Fri. Jul 8 before closing just below it. It was the highest level touched by the index since Jul 20 '15.

All three EMAs are rising, and the index is trading above them in a bull market. However, all three daily technical indicators, which are in bullish zones, touched lower tops (marked by blue arrows) while the index rose higher

The combined negative divergences can lead to another round of correction or consolidation. 

As pointed out in last week's post, the index has been trading within a bearish 'broadening top' pattern (higher tops, lower bottoms) since Apr '16. So, tread with caution.

On longer term weekly chart (not shown), the index traded throughout the week above its three rising weekly EMA in a long-term bull market for the 18th week in a row. Weekly technical indicators are in bullish zones.

FTSE 100 index chart


The daily bar chart pattern of FTSE 100 rose above the 6600 level on Mon. Jul 4, but formed a 'reversal day' bar (higher high, lower close). It consolidated sideways for the rest of the week in a range between 6450 and 6600.

The index is trading well above its three EMAs in bull territory. The 'golden cross' of the 50 day EMA above the 200 day EMA has technically confirmed a return to a bull market.

Daily technical indicators are looking bullish. MACD and Slow stochastic are inside their overbought zones. RSI is a little below its overbought zone. Some correction or consolidation is a possibility.

Bulls seem to be gradually gaining the upper hand. Dips can be used to add.

On longer term weekly chart (not shown), the index traded above its three weekly EMAs in bull territory throughout the week, and closed well above all three EMAs in a long-term bull market for the 2nd week in a row. Weekly technical indicators are in bullish zones. 

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