The daily bar chart pattern of S&P 500 continued with its previous week's sideways consolidation - touching a new high of 2194 on Mon. Aug 15 and a low of 2168 on Wed. Aug 17 before closing flat for the week.
The rising 20 day EMA provided good support and the index closed above its three EMAs in a bull market, but formed another 'doji' candlestick pattern that indicates indecision among bulls and bears.
All three daily technical indicators are in bullish zones, but showing negative divergences by failing to touch new highs with the index. Some more consolidation or a correction is likely.
On longer term weekly chart (not shown), the index closed well above its three rising weekly EMAs in a long-term bull market for the 24th week in a row, but has formed a 'doji' candlestick pattern that may trigger a correction. Weekly technical indicators are still looking overbought.
FTSE 100 index chart pattern
The concluding comment in last week's post on the daily bar chart pattern of FTSE 100 was: "Weekly technical indicators are looking quite overbought, which can trigger a correction at any time."
The index touched a new 52 week high of 6955 on Mon. Aug 15 but slipped into a correction and closed almost 100 points lower. On a weekly closing basis, the index lost 57 points (0.85%).
Daily technical indicators have corrected overbought conditions, and are showing downward momentum. The index may correct some more. Expect some downside support from the zone between 6750-6780.
On longer term weekly chart (not shown), the index closed above its three weekly EMAs in a long-term bull market for the 8th week in a row, but has formed a 'reversal' bar (higher high, lower close). Weekly technical indicators are still overbought. Some more correction is possible.