FKLI - Waiting For a Big Bash Down ? 14/12/09

  With the ADX has been lying flat at 18's which is telling us there is no trend in the market, prices generally remain within the range  within 2 horizontal lines as marked out last week.  We would have to pay more attention to the Stochastic which is now got a bit oversold. There is some possibility that we will get some minor rebound on the strength of the overnight DJIA . On the other hand you should pay attention to the MACD which has now almost fallen through its zero signal line.  I usually take that as a more bearish sign. So I would place my stop at 1258 just in case the market reverses but add on more shorts at 1250.

 

The weekly chart has deteriorated as price has closed below the upper Bollinger Band for the first time since  the bull commenced  its current run on April.  Both the MACD and the Stochastic  are negative and falling. Another early sell signal would be when the Stochastic crosses down its 80's signal line. The weekly ADX is also flat as its daily's which is not confirming any strong trend.

So now we may have the weekly chart backing the already bearish daily chart, you should tune your mental state from a bull to a bear. As I have been forewarning on the return of the USD's bull which has already  been confirmed last Friday , you should start to be cautious on stocks side.