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Monday, July 3, 2017

S&P 500 and FTSE 100 charts (Jun 30 '17): bear onslaughts force bull retreats

S&P 500 index chart pattern


The daily bar chart pattern of S&P 500 has been in a down trend (marked by purple down trend line) after touching a lifetime high of 2454 on Jun 19.

The index bounced up after receiving good support from its 50 day EMA, and is trading well above its rising 200 day EMA in a bull market.

Daily technical indicators are looking bearish. MACD is falling below its signal line in bullish zone. RSI is in neutral zone. Slow stochastic is in bearish zone.

Note that the 20 day EMA and the MACD signal line are forming bearish 'rounding top' patterns - hinting at some more correction or consolidation.

Wait for the correction to play out before deciding to add to existing holdings.

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 correcting overbought conditions, and showing downward momentum.

FTSE 100 index chart pattern


The daily bar chart pattern of FTSE 100 has been in a down trend (marked by purple down trend line) after touching a lifetime high of 7599 on Jun 2.

The previous (Jun 15) low was breached by strong selling on Thu. Jun 29 and Fri. Jun 30. The index dropped well below its 50 day EMA to test support from the 7300 level.

The index is trading above its rising 200 day EMA in a bull market. But BrExit concerns have caused bulls to beat a hasty retreat.

Technical indicators are bearish and showing downward momentum. Slow stochastic has fallen deep inside its oversold zone, and can trigger a technical bounce.

Any such bounce may be used by bears to sell again. The index appears to have formed a 'head and shoulders' pattern with a downward-sloping 'neckline' at 7375. The pattern has a downward target of 7150. 

On longer term weekly chart (not shown), the index closed below its 20 week EMA but above its 50 week and 200 week EMAs in a long-term bull market. Weekly technical indicators are showing downward momentum in bullish zones.

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