KLOFFE 23/2/09

Last week I warned of the ADX was falling below its 20 signal line that we have to watch the Stochastic closely. It went above the overbought zone and then turn down below its 80 signal line thus triggering an initial sell signal. And I also have a confirmation with price closed below the Bollinger Band top. By Friday, the MACD has also crossed down and the D+ has also crossed below the D-, both giving another sell confirmation.

Since the ADX continues to fall and stays below its 20 signal line , this mean this market has entered into a trendless situation. So you should continue to watch the Stochastic closely for your short term trading. Since the MACD is doing its bearish cross down near to its zero signal line, there may be a chance that this sell signal may become something bigger.

On the coming week, if price goes below Friday's low or prices go below the Bollinger Band bottom ,you may want to add on your short positions. Most important of all - watch the ADX, if it rises, there will be bigger fireworks.

Kloffe's weekly chart Stochastic has already crossed down, thus flashing its initial sell signal. But we would to bring your attention to the increasing squeezing Bollinger Band thus supplementing the daily chart's trend less reading. But like we always say - a squeezing Bollinger Band is always extremely profitable. So monitor this closely. By the coming week, we hope we can begin to discuss this market's next major direction.