KCPO:- Bears Back In Command ? 29/3/210

 
The market took out my stop on last Monday. As I was getting ready to go long again with price closed above the lower Bollinger Band and the Stochastic crossing up the 20's signal line on Tuesday, the following day's price failed to confirm the buy by hitting a higher high but instead went back down and closed below the lower Bollinger Band again. A new signal came in on Friday when price went below the lower Band and  lower than the recent low of 2549.

The daily chart is getting interesting as the negative  MACD has gone below its zero signal line. I usually take this as a more confirming sell signal. The D- remains above the D+, and a very interesting item has developed here is the ADX has risen and crossed above the falling D+, which by itself is a major sell signal. A rising ADX means a new trend in emerging, and I would wait for it to cross above its own 20's signal line and with that, I would add more shorts positions. As long as the ADX continues to rise, you can disregard the Stochastic which has fallen back the "oversold" zone. Remember: when there is a strong trend in the market, ignore those oscillators indicators and watch the MACD instead. I will also add on more sell when price breaks below its recent low of 2528. Place stop at 2568.

The weekly chart is finally come in agreement with the Stochastic falling and  the MACD has crossed down. Price has closed below the all important middle band which is the 20 periods moving average. But the D+ still maintain above the D- which is telling us the bull may be dying but still has some breath in it. I notice the Bollinger Band has begun to tighten which is telling us that a new trend is not yet in place. But a weekly closing of below 2445 may see a new trend setting in.

With the current strength of the US Dollars, most commodities will have a more bearish bias. At the moment the USD is near one of its near term upside target and may hover around here before going for its next targets of 83.70/89.60/100.00 (USD Index chart), so KCPO may just imitate that too before seeing a major move.