Monday, September 17, 2018

S&P 500 and FTSE 100 charts (Sep 14, 2018): bears trying to spoil the bull party

S&P 500 index chart pattern


The daily bar chart pattern of S&P 500 had touched a high of 2916.50 on Aug 29. In the process, the index had penetrated its upper Bollinger Band. As often happens after such an event, a corrective move followed.

The index received good support from its 20 day SMA (marked by blue dotted line) and bounced up to close above the 2900 level in bull territory. A convincing move above the Aug 29 top will restore control to bulls. A failure to do so will encourage bears to go on the offensive.

Daily technical indicators are looking bullish. MACD is about to cross above its signal line in bullish zone. RSI has bounced up after receiving support from its 50% level. Slow stochastic had dropped below its 50% level but has since moved above it.

On longer term weekly chart (not shown), the index closed above its three rising weekly EMAs in a long-term bull market. Weekly technical indicators are looking overbought. MACD is rising above its signal line inside its overbought zone. RSI is hovering just below its overbought zone. Slow stochastic is sliding down inside its overbought zone. 

FTSE 100 index chart pattern


The daily bar chart pattern of FTSE 100 had been correcting inside a downward-sloping trading channel after touching a lifetime high of 7903.50 on May 22 '18. On Sep 5, the index breached the lower edge of the channel, and dropped to close below 7300 on Sep 7.

On Sep 11, the index touched a low of 7220.50 but formed a 'dragonfly doji' candlestick pattern, which has bullish implications. However, the 7300 level is providing strong resistance. The imminent 'death cross' of the 50 day EMA below the 200 day EMA will technically confirm a return to a bear market.

Daily technical indicators are looking bearish. MACD is below its falling signal line in bearish zone. RSI has bounced up a bit after receiving support from the edge of its oversold zone. Stochastic is trying to emerge from its oversold zone.

On longer term weekly chart (not shown), the index closed below its 20 week and 50 week EMAs but above its 200 week EMA in a long-term bull market. Weekly MACD is below its falling signal line and has entered bearish zone. RSI is below its 50% level. Stochastic is moving up inside its oversold zone.

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