Monday, July 10, 2017

S&P 500 and FTSE 100 charts (Jul 07 '17): bears still calling the shots

S&P 500 index chart pattern


The daily bar chart pattern of S&P 500 has been in a three weeks long down trend (marked by purple down trend line) since touching a lifetime high of 2454 on Jun 19.

In a holiday-shortened trading week, the index touched a lower top of 2439 on Mon. Jul 3 only to slip down and close below its 50 day EMA on Jul 6. It bounced up to close just below its 20 day EMA for the week.

Daily technical indicators are looking bearish. MACD is sliding down below its signal line in bullish zone. RSI is trying to cross above its 50% level after falling below it. Slow stochastic is falling below its 50% level.

MACD and RSI are showing negative divergences by touching lower bottoms while the index touched a slightly higher bottom.

The index is trading well above its rising 200 day EMA in a bull market. However, some more consolidation or correction below the (purple) down trend line can be expected.

On longer term weekly chart (not shown), the index closed well above its three rising weekly EMAs in a long-term bull market. Weekly technical indicators are correcting overbought conditions, and showing downward momentum.

FTSE 100 index chart pattern


After touching a lifetime high of 7599 on Jun 2, the daily bar chart pattern of FTSE 100 has been in a down trend (marked by purple down trend line) that has entered its 6th week.

An oversold Slow stochastic triggered a technical bounce on Mon. Jul 3 (the possibility was mentioned in last week's post), but the index faced resistance from the 7385 level.

For the rest of the week, the index consolidated sideways between 7300 and 7385 - closing about 0.5% higher for the week. (At the time of writing this post, the index is testing resistance from the 7385 level.)

All three daily technical indicators are in bearish zones, and showing slight upward momentum. A convincing move above the 7385 level and the falling 20 day and 50 day EMAs is required for bulls to regain control.

The index is trading above its rising 200 day EMA in a bull market. However, a breach of the 7300 level may lead to a deeper correction and a test of support from the 200 day EMA.

On longer term weekly chart (not shown), the index bounced up to close at its 20 week EMA, and above its 50 week and 200 week EMAs in a long-term bull market. Weekly MACD and Slow stochastic are showing downward momentum in bullish zones. RSI has bounced up after receiving support from its 50% level.

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