KCPO - Market blows up as anticipated - 23/11/09

Unlike fundamental analysis, the beautiful aspect of applying technical analysis to the market is that it can usually foretell you what is likely to happen next. I have been taking about a possible new violent move for the past few weeks on - " The beautifully squeezing weekly Bollinger Band is signaling that a major move may be forthcoming ." This market just blown upward on last Monday and made a tiny gain of 150 points within a week.

The Stochastic and the MACD continue to rise. The MACD is above its zero signal line which make t more bullish. And the most important item is that the previously sleepy ADX has now risen and crossed up the falling D-. It has now reached the 20 signal line which is confirming the trend. But the toppish Stochastic would probably mean this market see some retracement or consolidation in the coming week. I would place my stop now at 2330 or last bar low minus 5 to take profit.



The weekly chart is also bullish as the MACD has just turned positive and crossed up its own zero signal line which is a more solid buy signal. The Stochastic remains upward. Prices has now closed above the upper Bolliner Band. The D+ has also crossed up the falling D- which may be interpreted as another buy signal. The previously falling ADX jas now turned flat, signaling a possible reversal of the trend.

There could be a possibility that this market may go back to test its previous peak of 2799, but somehow I doubt it as the currency markets do not seem to support this scenario. If my reading that the USD should strengthen soon, equities and commodities market would soften. Since the picture is not too clear on the magnitude of its next move, I will just ride it and keep a very clear mind on my stops.