FKLI - Is the Mother of All Bears Waiting Across the Horizon ? 16/2/2010

The selling stalled and staged a rebound when news broke on EU will be "rescuing" Greece. The ADX has turned flat which is confirming the prior trend of selling has stopped. The Stochastic has turned promising as it has just crossed up its 20's signal line which offers  an initial buy signal. But the other items are non confirming as MACD remains negative. Price managed to close above the bottom Bollinger Band which usually offering another buy signal, but it was unable to hold above that level but instead closed down below the lower Bollinger band on the last trading day before the holiday. Meanwhile the D- is still in control over the D+.

I would place a stop at 1238 to cut loss on the earlier BBand buy signal. I may try some new sell positions.

 
The weekly chart's Stochastic and MACD both continue to fall and the D- has just crossed above D+ which is flashing a strong signal. If prices go below 1219.50 in the coming week, it would trigger another major sell signal.Another item to watch out for is the Stochastic crossing down its own 50's signal line which is also a more confirming sell signal. You should pay attention the weekly Bollinger Band which has been squeezing, this is usually a sign that a very violent move may lie ahead.
 
The herds think EU would play the Superman's role and rescue Greece, so on that news "market confidence" suddenly returned . But as usual, this new found "confidence" can evaporate as fast as it comes. I do not think EU can do much as there are many other possible sovereign defaults waiting in line to explode.  Other than the "Mediterranean  Crisis Club"  ,  some eastern bloc and  South American and South Asian nations, these people may not be aware that there may also be more than half of  US states that may already be technically bankrupted. As soon as those news emerge, everybody will sell again.