CPO :- Sell again 11/1/10

As I noticed that the Stochastic was overbought last week and warned of that you should be cautious about the long positions. The market sort of "collapsed" on last Thursday and gave up 72 points. At present, the situation warrants for a call to sell as the negative Stochastic has crossed down its 8 signal line which usually offers as an initial sell signal. The MACD has also turned negative last Friday, but since it is still relatively "high" above the zero line, we would not call it a solid signal yet. Price has also gone below the upper Bollinger Band which can serve as another sell signal. Again the ADX has begun fallen which I would interpret it as the end of the prior trend.

Place your stop at 2650.

 

As far as the weekly chart is concerned, everything seems still to be bullish except maybe the Stochastic has just crossed down its moving average, but then it still remain above the 80's zone. The positive MACD which is above its zero signal line is still rising and prices stay above the upper Bollinger Band. Best of all is the ADX is still rising.

So again the weekly chart which remains bullish and does NOT support the bearish daily chart. So even I have sold this market, I would  NOT commit a large size of contracts and I would close those positions at the slightest warning. The next upside target would be 2850.