S&P 500 index chart pattern
The following remarks were made in last week's post on the daily bar chart pattern of S&P 500:
"The index may be in the process of forming a 'diamond' pattern. A 'diamond' can be a reversal pattern or a continuation pattern. So, await the breakout before deciding to buy or sell. An upward breakout above 2480 will be bullish. A downward breakout below 2440 will be bearish."
On Mon. Sep 11, the index opened trading with an upward 'gap' and broke out above the 'diamond' pattern and the 2480 level. It closed just below 2490. During the rest of the week, the index consolidated sideways with an upward bias, and closed at a lifetime high of 2500 - with a gain of 1.6% on a weekly closing basis.
Note the large spike in volume on Fri. Sep 15. That may be the sign of a 'buying climax' that can lead to a pullback towards the 'diamond' pattern. Such a pullback will provide a buying opportunity to those who missed buying on the upward break out.
Daily technical indicators are in bullish zones. MACD is rising above its signal line in overbought zone. RSI is moving sideways below its overbought zone. Slow stochastic is well inside its overbought zone. MACD and RSI are showing negative divergences by failing to touch new highs with the index.
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 in bullish zones, but showing negative divergences by failing to touch new highs with the index.
FTSE 100 index chart pattern
The following remark in last week's post on the daily bar chart pattern of FTSE 100 provided adequate warning to investors: "A likely downward breakout below 7300 can lead to a test of support from, or even a breach of, the 200 day EMA."
The index made a couple of futile attempts to move above the (purple) down trend line on Mon. Sep 11 & Tue. Sep 12. Bears took control right away.
On Thu. Sep 14, the index dropped and closed just below the support level of 7300. On Fri. Sep 15, the index fell sharply below the 200 day EMA and the 7200 level intra-day, before managing to close above 7200 - with a loss of 2.2% on a weekly closing basis.
(At the time of writing this post, the index is in the process of pulling back towards the 200 day EMA. Those who missed selling on Friday's downward break out can use the pullback as a selling opportunity.)
Daily technical indicators are looking bearish and showing downward momentum. Some more correction - perhaps a test of the Apr '17 low of 7100 - is possible.
On longer term weekly chart (not shown), the index dropped below its 20 week EMA and is seeking support from its 50 week EMA, but closed well above its 200 week EMA in a long-term bull market. Weekly MACD is falling below its signal line in bullish zone. RSI has fallen below its 50% level. Slow stochastic has re-entered its oversold zone.
The following remarks were made in last week's post on the daily bar chart pattern of S&P 500:
"The index may be in the process of forming a 'diamond' pattern. A 'diamond' can be a reversal pattern or a continuation pattern. So, await the breakout before deciding to buy or sell. An upward breakout above 2480 will be bullish. A downward breakout below 2440 will be bearish."
On Mon. Sep 11, the index opened trading with an upward 'gap' and broke out above the 'diamond' pattern and the 2480 level. It closed just below 2490. During the rest of the week, the index consolidated sideways with an upward bias, and closed at a lifetime high of 2500 - with a gain of 1.6% on a weekly closing basis.
Note the large spike in volume on Fri. Sep 15. That may be the sign of a 'buying climax' that can lead to a pullback towards the 'diamond' pattern. Such a pullback will provide a buying opportunity to those who missed buying on the upward break out.
Daily technical indicators are in bullish zones. MACD is rising above its signal line in overbought zone. RSI is moving sideways below its overbought zone. Slow stochastic is well inside its overbought zone. MACD and RSI are showing negative divergences by failing to touch new highs with the index.
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 in bullish zones, but showing negative divergences by failing to touch new highs with the index.
FTSE 100 index chart pattern
The following remark in last week's post on the daily bar chart pattern of FTSE 100 provided adequate warning to investors: "A likely downward breakout below 7300 can lead to a test of support from, or even a breach of, the 200 day EMA."
The index made a couple of futile attempts to move above the (purple) down trend line on Mon. Sep 11 & Tue. Sep 12. Bears took control right away.
On Thu. Sep 14, the index dropped and closed just below the support level of 7300. On Fri. Sep 15, the index fell sharply below the 200 day EMA and the 7200 level intra-day, before managing to close above 7200 - with a loss of 2.2% on a weekly closing basis.
(At the time of writing this post, the index is in the process of pulling back towards the 200 day EMA. Those who missed selling on Friday's downward break out can use the pullback as a selling opportunity.)
Daily technical indicators are looking bearish and showing downward momentum. Some more correction - perhaps a test of the Apr '17 low of 7100 - is possible.
On longer term weekly chart (not shown), the index dropped below its 20 week EMA and is seeking support from its 50 week EMA, but closed well above its 200 week EMA in a long-term bull market. Weekly MACD is falling below its signal line in bullish zone. RSI has fallen below its 50% level. Slow stochastic has re-entered its oversold zone.
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