Monday, July 29, 2019

S&P 500 and FTSE 100 charts (Jul 26, 2019): bulls brush aside feeble bear resistance

S&P 500 index chart pattern

The daily bar chart pattern of S&P 500 seems to have brushed aside feeble bear resistance. The index bounced up after receiving support from its rising 20 day EMA and touched a new high of 3028 on Fri. Jul 26.

The index gained 49 points (1.6%) on a weekly closing basis, and is trading above its three rising EMAs in a bull market. However, bears are refusing to give up. Volumes were heaviest on Thu. Jul 25 - the only down day during the week. A sign that 'smart money' is getting out?

Daily technical indicators are in bullish zones but showing weak upward momentum. MACD is moving sideways below its falling signal line. RSI is moving sideways above its 50% level. Slow stochastic has re-entered its overbought zone. 

All three indicators are showing negative divergences by failing to touch new highs with the index. Some correction or consolidation may follow.

On longer term weekly chart (not shown), the index closed well above its three rising weekly EMAs in a long-term bull market, but has formed a 'broadening top' reversal pattern since Jan '18Weekly technical indicators are looking overbought and showing negative divergences by failing to touch new highs.

FTSE 100 index chart pattern

The daily bar chart pattern of FTSE 100 continued its sideways consolidation  with a downward bias for the third straight week. The index touched a high of 7599 in bull territory on Tue. Jul 23, but dropped below its 20 day EMA the very next day.  

FTSE dropped to seek support from its 50 day EMA on Thu. Jul 25. On Fri. Jul 26, the index bounced up above its 20 day EMA to close above its three EMAs in bull territory - at 7549 (gaining 40 points for the week).

Daily technical indicators are turning bullish. MACD is moving sideways below its falling signal line in bullish zone. RSI and Stochastic are rising above their respective 50% levels. The index seems ready to resume its up move.

On longer term weekly chart (not shown), the index closed above its three weekly EMAs in long-term bull territory for the 8th straight week. Weekly technical indicators are showing upward momentum in bullish zones. MACD is rising above its signal line. RSI is moving up above its 50% level. Stochastic is rising inside its overbought zone.

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