S&P 500 index chart pattern
The daily bar chart pattern of S&P 500 formed a 5 points upward 'gap' on Fri. Oct 20, and rose to touch another new high of 2575 with good volume support.
All three EMAs are rising, and the index is trading well above them in a bull market. Daily technical indicators are inside their overbought zones. MACD and Slow stochastic are showing negative divergences by failing to touch new highs with the index.
With bulls on a rampage, the index can remain overbought for long periods. However, it may be prudent to book partial profits and reallocate assets to de-risk portfolios.
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 inside their respective overbought zones, but not showing any downward momentum.
FTSE 100 index chart pattern
The following comments were made in last week's post on the daily bar chart pattern of FTSE 100: "...the index is struggling to move above its previous (Aug 8) top of 7552 in a convincing manner - leaving the door open for another pullback towards the down trend line, or, a bit of sideways consolidation."
On Thu. Oct 19, the index pulled back to the (purple) down trend line before bouncing up to close above 7520. Such pullbacks provide buying opportunities.
On Fri. Oct 20, the index touched an intra-day high of 7560, but failed to close above the Aug 8 top of 7552. In fact, it closed near its opening level to form a 'gravestone doji'-like candlestick pattern - indicating hesitation among bulls and bears.
The index is trading above its three rising EMAs in a bull market. Daily technical indicators have corrected overbought conditions, and showing downward momentum in bullish zones. Some consolidation or correction may follow.
On longer term weekly chart (not shown), the index closed above its three weekly EMAs in a long-term bull market. Weekly MACD and RSI are moving sideways in bullish zones. Slow stochastic is inside its overbought zone.
The daily bar chart pattern of S&P 500 formed a 5 points upward 'gap' on Fri. Oct 20, and rose to touch another new high of 2575 with good volume support.
All three EMAs are rising, and the index is trading well above them in a bull market. Daily technical indicators are inside their overbought zones. MACD and Slow stochastic are showing negative divergences by failing to touch new highs with the index.
With bulls on a rampage, the index can remain overbought for long periods. However, it may be prudent to book partial profits and reallocate assets to de-risk portfolios.
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 inside their respective overbought zones, but not showing any downward momentum.
FTSE 100 index chart pattern
The following comments were made in last week's post on the daily bar chart pattern of FTSE 100: "...the index is struggling to move above its previous (Aug 8) top of 7552 in a convincing manner - leaving the door open for another pullback towards the down trend line, or, a bit of sideways consolidation."
On Thu. Oct 19, the index pulled back to the (purple) down trend line before bouncing up to close above 7520. Such pullbacks provide buying opportunities.
On Fri. Oct 20, the index touched an intra-day high of 7560, but failed to close above the Aug 8 top of 7552. In fact, it closed near its opening level to form a 'gravestone doji'-like candlestick pattern - indicating hesitation among bulls and bears.
The index is trading above its three rising EMAs in a bull market. Daily technical indicators have corrected overbought conditions, and showing downward momentum in bullish zones. Some consolidation or correction may follow.
On longer term weekly chart (not shown), the index closed above its three weekly EMAs in a long-term bull market. Weekly MACD and RSI are moving sideways in bullish zones. Slow stochastic is inside its overbought zone.
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