FKLI - Don't Get Misled By Politicians -1/3/2010

The market continues to move upwards last week. The Stochastic has crossed up its 50 signal line while the MACD has also crossed up its moving average, though it is still below its zero signal line. The D+ has also gone above the falling D-. All of these are confirming additional buy signal. Further closing above the upper Bollinger band of 1274 will add more weight to the buy side. But the ADX remains unimpressive as  it is still falling, which is telling us the momentum strength is not too convincing.

But since all signs are supporting the buy side, we shall stay with it until we are stopped out at 1256.

 

The weekly chart remains on the bearish side as both the Stochastic and the MACD continue their descent. The Stochastic has now crossed below its 50's signal line which is usually a more confirming sell signal. I would pay attention to the MACD since it is now fast approaching its zero signal line. Once crossed down, I would think the bears will come out for the party. I would stay more alert as the Bollinger Band has started to squeezed and price bars stay within the high-low band. Any subsequent weekly closing above upper band or below the bottom band  would probably confirming this market's next major move. And a squeezing Band usually signaling big move ahead.

Last week our beloved PM declared the "trouble is over". Same as Obama who also made some similar statement on their economy. I personally think these are more a political statement rather than an economical one. Looking at the  continuing fast  deteriorating European economies (include that of UK's) , it is difficult to imagine we can stay unscathed from their fallout. And already some American Elliot Wave technicians are talking about possible stock indies breaking several support levels within  days type of situation. Since many of them have been right to the dots accurate in their recent readings, I think we should at least keep as alert as a tiger and not to be taken in by political statements.