S&P 500 index chart pattern
The following comment was made in last week's post on the daily bar chart pattern of S&P 500: "It may be prudent to be fearful when everyone else seems greedy and take some profits off the table."
Quite a few investors did decide to be prudent, and booked profits. The index formed a large 'reversal day' bar (higher high, lower close) with strong volumes on Tue. Jan 16, when trading resumed after a long weekend.
Bulls refused to be deterred and bought the dip. After a brief halt on Thu. Jan 18, the index rose to another new high (2810) on Fri. Jan 19. All three EMAs are rising, and the index is trading above them in a bull market.
Daily technical indicators are well inside their respective overbought zones. Last week's trading has occurred within a bearish 'rising wedge' pattern - so caution is advised.
On longer term weekly chart (not shown), the index closed at another new high - way above its three rising weekly EMAs in a long-term bull market - but formed a bearish 'hanging man' candlestick pattern. Weekly technical indicators are looking very overbought. Don't be surprised if there is a sudden sharp correction.
FTSE 100 index chart pattern
The following comments were made in last week's post on the daily bar chart pattern of FTSE 100: "Daily technical indicators are looking overbought and can trigger some consolidation or correction. Partial profit booking may be a good idea for conservative investors."
The index started correcting from Mon. Jan 15 and dropped below the 7700 level by Thu. Jan 18. Next day, the index bounced up after receiving support from its rising 20 day EMA, but lost 0.6% on a weekly closing basis.
At the time of writing this post, the index is trading 5 points higher, and above its three rising EMAs in a bull market. Daily technical indicators have corrected overbought conditions, but remain in bullish zones.
The correction provided an adding opportunity, and improved the technical 'health' of the chart. The index should move up to new highs.
On longer term weekly chart (not shown), the index closed above its three rising weekly EMAs in a long-term bull market. Weekly MACD and RSI are in bullish zones. Slow stochastic is moving down inside its overbought zone.
The following comment was made in last week's post on the daily bar chart pattern of S&P 500: "It may be prudent to be fearful when everyone else seems greedy and take some profits off the table."
Quite a few investors did decide to be prudent, and booked profits. The index formed a large 'reversal day' bar (higher high, lower close) with strong volumes on Tue. Jan 16, when trading resumed after a long weekend.
Bulls refused to be deterred and bought the dip. After a brief halt on Thu. Jan 18, the index rose to another new high (2810) on Fri. Jan 19. All three EMAs are rising, and the index is trading above them in a bull market.
Daily technical indicators are well inside their respective overbought zones. Last week's trading has occurred within a bearish 'rising wedge' pattern - so caution is advised.
On longer term weekly chart (not shown), the index closed at another new high - way above its three rising weekly EMAs in a long-term bull market - but formed a bearish 'hanging man' candlestick pattern. Weekly technical indicators are looking very overbought. Don't be surprised if there is a sudden sharp correction.
FTSE 100 index chart pattern
The following comments were made in last week's post on the daily bar chart pattern of FTSE 100: "Daily technical indicators are looking overbought and can trigger some consolidation or correction. Partial profit booking may be a good idea for conservative investors."
The index started correcting from Mon. Jan 15 and dropped below the 7700 level by Thu. Jan 18. Next day, the index bounced up after receiving support from its rising 20 day EMA, but lost 0.6% on a weekly closing basis.
At the time of writing this post, the index is trading 5 points higher, and above its three rising EMAs in a bull market. Daily technical indicators have corrected overbought conditions, but remain in bullish zones.
The correction provided an adding opportunity, and improved the technical 'health' of the chart. The index should move up to new highs.
On longer term weekly chart (not shown), the index closed above its three rising weekly EMAs in a long-term bull market. Weekly MACD and RSI are in bullish zones. Slow stochastic is moving down inside its overbought zone.
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