FKLI:- Has The Bear Finally Arrived ? 19/4/2010

As I was saying last week, the recent bull was not too convincing. The market took out my stop on last Tuesday and was trying to close back up above the upper Bollinger Band but failed. Now price is firmly below the upper band and complimented by a falling negative Stochastic and MACD. The Stochastic has also gone below the 80's signal line which is offering an initial sell signal, so has the MACD.

The D+ is fast falling and we may soon see a negative cross down with a rising D-. The falling ADX is confirming the end of the prior trend. So I am now in the short position but with regular bad habits of the people in power refuses to see the market going down, they may choose to push the market up and delay another time for the market to face the bear, so I am keeping a stop at 1346.

But the weekly chart has not confirmed the weakness in the daily chart yet. the Stochastic remains positive and remain above the 80's . The MACD also remain positive while price maintain above the upper Bollinger Band. And we have another smallish  black body candlestick which is not telling us much. The weekly ADX remains flat. So we need to watch the weekly chart for another 1-2 weeks to read  new indications. If prices continue to deteriorate, we may find a new bearish divergence forming at the MACD which could really be nasty.

The current bigger picture is that another bearish divergence is formed with the highs at 6th April and that of 11th. March's. And that Najib had shaken Obama's hand and all that (I can't help sniggering when I typed that line) . With this, I am looking forward for a short term grand slam of some sort in this market. Some of my friends who are in the stock market always scold me for 'glorifying" the return of the bear market, I just  remind them kind heartedly :- if the bear does not return once in a while to ravage the market, how can they expect to pick up stock like Public Bank at single digit price ? Like the old masters say:- big ups or downs are good for the players. Sideway is not. If you are a mature player in the financial market, you should never start curses and reel in fears  when the bears return, just sell short the futures and take profit in the equities. It is great time to make good money.