Monday, June 18, 2018

S&P 500 and FTSE 100 charts (Jun 15, 2018): bears stall bull rallies

S&P 500 index chart pattern

The following comments appeared in last week's post on the daily bar chart pattern of S&P 500: "Note that Friday's higher close was on weaker volumes. Bears may use the opportunity to force bulls to retreat. Any further rally is likely to face resistance from the 2810 level."

The index faced resistance at 2790, and pulled back to the top of the 'Flag' pattern on Wed. Jun 13. Instead of bouncing up, the index dropped inside the 'Flag' intra-day on Fri. Jun 15 but managed to close just above the 'Flag'.

Friday's trading formed a 'hammer' candlestick pattern that has bullish implications. The significant volume spike is probably a sign of 'selling climax'. 

Daily technical indicators are in bullish zones. MACD and RSI are moving sideways. Slow stochastic is sliding down inside its overbought zone. The index is trading above its three rising EMAs in a bull market. 

A possible move above 2810 can lead to a test of resistance from 'GAP 1'. Bears can be expected to give ground grudgingly. In case of further correction, 'GAP 2' should provide strong support. 

On longer term weekly chart (not shown), the index closed above its three rising weekly EMAs in a long-term bull market, but formed a 'doji' candlestick that can lead to some correction or consolidation. Weekly technical indicators are looking bullish.

FTSE 100 index chart pattern

The daily bar chart pattern of FTSE 100 spent another week consolidating sideways in a range between 7601 and 7793. 

On Thu. Jun 14, the index tested resistance from its Jan '18 top of 7793 but dropped to close below its 20 day EMA on Fri. Jun 15 - with a weekly loss of 0.6%.

The 50 day and 200 day EMAs are rising, and FTSE is trading above them in a bull market. Daily technical indicators are looking bearish and showing downward momentum - hinting at more consolidation/correction. 

On longer term weekly chart (not shown), the index closed well above its  three weekly EMAs in a long-term bull market. Weekly MACD is moving sideways inside its overbought zone. RSI is rising above its 50% levelSlow stochastic has fallen from its overbought zone.

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