CPO - 15/6/09 - The bear arrived ?

The daily ADX continues to fall and now find itself below the 20 signal line, so is the Bollinger Band which has started to tighten, both are confirming a trendless market. But both the MACD and the Stochastic are flashing new sell signal (last week they were contradicting each other). The MACD has just crossed down the zero signal line which is usually a powerful confirming sell signal. The Stochastic has also just crossed down its own 50 signal line, that too, is usually another more reliable sell signal. Last Friday's price had closed below the lower Bollinger Band is also one more selling signal.

So the sell signals are all over the daily chart, except there is no strong trend yet. You may want to engage some initial sell positions at this moment, and wait for the ADX to rise again before engaging heavier positions. Place stop at 2550 to protect your short positions.

The weekly chart is not offering much support for the bull side as the Stochastic has already crossed down its 80's signal line which is usually taken as initial sell signal. While the MACD may not has crossed down yet but it is obviously losing its prior momentum as it has already started to dip its head. The more confirming signal would be last week's price closed below the upper Bollinger Band which is another sell signal. The only remaining signals left non-confirming would be the D+ is still above the D- and the MACD is still positive.

With the daily chart already filled with sell signals and the weekly chart is half sided with the bear, I think it would be prudent to switch camp from the bull to bear at this moment of time. The downside support areas would be 2240, 2070 and 1900.