The following were the concluding comments in last week's post on the daily bar chart pattern of S&P 500: "Some more correction to test support from the rising 20 day EMA can't be ruled out. However, the index should resume its up move soon."
There was no further correction as the index resumed its up move immediately after receiving support from the 2190 level. On Fri. Dec 9, the index rose to touch a new lifetime high of 2260.
All three EMAs are rising, and the index is trading well above them in a bull market. However, all three daily technical indicators are inside their overbought zones. Another corrective move may be in the offing.
On longer term weekly chart (not shown), the index closed at a new lifetime high - well above its three weekly EMAs in a long-term bull market for the 40th week in a row. All three indicators are in bullish zones but showing negative divergences by failing to touch new highs with the index. Expect some correction or consolidation.
FTSE 100 index chart pattern
The daily bar chart pattern of FTSE 100 shows a spirited fight back by bulls just when bears were on the verge of gaining control. ECB's decision to extend its Quantitative Easing programme till Dec '17 gave a strong impetus to bulls.
The index bounced up strongly after receiving support from the 6700 level and broke out above the down trend line that was dominating the chart for the past two months.
At the time of writing this post, a pullback towards the down trend line is under way. If you missed buying on the break out above the down trend line, the pullback is providing another buying opportunity.
All three daily technical indicators are looking bullish. Slow stochastic is well inside its overbought zone - and may have triggered the pullback.
On longer term weekly chart (not shown), the index closed above its three weekly EMAs in a long-term bull market for the 24th week in a row. Weekly MACD and RSI are in bullish zones. Slow stochastic is still in bearish zone, but is rising towards its 50% level.