FKLI - A Storm In Brewing ? 4/1/2010

When the ADX gets too low, we can always expect many false signals for buy and sell. Last week my stops was hit and another buy signal emerged when price closed above the upper Bollinger Band. Even though we have a complimentary signals from a positive MACD and Stochastic, the expanding D+ did not cross up above the prior peak as marked out by me. This method would keep us from many of whipsawing signals that usually occur in a lowly ADX situation.

I would continue to monitor the expanding D+ or D- to enter the next trade signal. Again I am still more bearish biased because of the bearish divergences and the fading Stochastic (already bending its head). The MACD is also near its zero signal line, any breakdown below it would offer a more concrete sell    signal. Therefore  I would pay more attention to a new sell signal.

 

The weekly chart MACD continues to fall , but again it is still relatively "far" from its zero signal line. So I would NOT take it as those "life threatening" type. The Stochastic is also holding below its 80's signal line and prices stay below the upper Bollinger Band. All of which should be read as bearish. But since the D+ is still holding above the D-, so I am NOT too bearish about the chart yet.

Both the daily and weekly chart is waiting for the next clear signal on its direction, so at this moment I would just stay aside and wait and see. With the extremely low ADX and a squeezing Bollinger Band, we can expect some major moves coming on ahead soon.