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Monday, June 26, 2017

S&P 500 and FTSE 100 charts (Jun 23 '17): bears refusing to yield ground

S&P 500 index chart pattern


The closing chart pattern of S&P 500 has been consolidating within a narrow 'rectangle' pattern between 2429 and 2440 (marked in grey) during June '17.

On Mon. Jun 19, the index broke out sharply from the 'rectangle' to close at a new high of 2453. However, it turned out to be a 'false' breakout.

There was no surge in volumes that would have technically validated the breakout. (The two volume surges visible on the chart occurred on two Fridays - Jun 16 & 23).

All three technical indicators showed negative divergences by failing to touch new highs with the index. Bears took the opportunity to sell.

The index dropped back inside the 'rectangle' on Tue. Jun 20 and remained there - closing with just a 5 point gain for the week.

Technical indicators are in bullish zones, but not showing any upward momentum. Some more consolidation within the 'rectangle' is likely before another attempt at an upward breakout occurs.

All three EMAs are rising, and the index is trading above them in a bull market. But bears are selling on every rise - so caution should be the watchword.

On longer term weekly chart (not shown), the index closed well above its three rising weekly EMAs in a long-term bull market. Weekly technical indicators are overbought, but not showing any upward momentum.

FTSE 100 index chart pattern


The daily bar chart pattern of FTSE 100 closed above its three EMAs in bull territory on Mon. Jun 19. The next day, it formed a 'reversal day' bar (higher high, lower close) that triggered selling by bears. 

The index received support from the 7400 level, and just about managed to close at its 50 day EMA - with a 0.5% weekly loss.

Bulls may try to defend the previous week's low of 7375. Daily technical indicators are looking bearish and showing downward momentum.

The index is trading well above its rising 200 day EMA - which means there is no immediate threat to the bull market. (On the daily closing chart - not shown - the index is receiving strong support from its 50 day EMA and the 7425 level.)

On longer term weekly chart (not shown), the index closed above its three weekly EMAs in a long-term bull market. Weekly technical indicators are in bullish zones, but showing downward momentum.

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