Monday, December 11, 2017

S&P 500 and FTSE 100 charts (Dec 08 '17): bulls gaining ground

S&P 500 index chart pattern


The daily bar chart pattern of S&P 500 continued its gravity-defying rally by touching another new high of 2665 on Mon. Dec 4, but formed a 'reversal day' bar (higher high, lower close). 

That triggered a brief correction down to 2624.75 on Wed. Dec 6. Bulls bought the dip once again. The index closed above 2650 with a small 0.3% gain on a weekly closing basis.

The index is trading above its three rising EMAs in a bull market. Daily technical indicators are in bullish zones. MACD and RSI are looking overbought.

Despite the relentless rise of the index and bull's 'buy the dip' strategy, strong volumes on recent down-days indicate that bears remain active. Smart money is probably booking profits. 

On longer term weekly chart (not shown), the index closed well above its three rising weekly EMAs in a long-term bull market, but formed a bearish 'hanging man' candlestick pattern. Weekly technical indicators are quite overbought. Slow stochastic failed to touch a new high with the index, and can trigger a correction to the rising 20 week EMA. 

FTSE 100 index chart pattern



The daily bar chart pattern of FTSE 100 oscillated about its 200 day EMA during the first four days of trading. By touching an intra-day low of 7289 on Wed. Dec 6, the index formed a small 'double bottom' reversal pattern.

On Fri. Dec 8, the index rose sharply above its 200 day and 20 day EMAs and the 7400 level with a volume surge (not shown) - only to face strong resistance from its falling 50 day EMA. It closed just below 7400, with a gain of 1.3% on a weekly  closing basis.

Daily technical indicators are showing upward momentum. MACD and Slow stochastic are rising in bearish zones. RSI has moved up to its neutral zone. 

A convincing move above the (purple) down trend line is required if bulls wish to shake off bear shackles. (At the time of writing this post, bulls are in the midst of an attempt to do so.)

On longer term weekly chart (not shown), the index bounced up to close just below its 20 week EMA, but above its 50 week and 200 week EMAs in a long-term bull market. Weekly MACD is below its signal line in bullish zone. RSI  and Slow stochastic are in neutral zones, and slowing slight upward momentum.

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