FKLI:- Market Cannot Decide Yet - 16/8/2010

The market hit my stop on last Monday when it closed below the upper Bollinger Band. With the Stochastic also crossing down its 80's signal line, I turned short. Then on Thursday, the  market reversed up again and closed above the bottom Bollinger Band and then went above the middle band on Friday, I would suggest you should close off the short positions even though it may mean you suffer some losses. I take note that the ADX has started to fall. I suspect it may be going into another one of its range bounding situation. 

Both the indicators still remain negative. But if it manages to close above the upper Bollinger Band again with the Stochastic crosses up, then maybe you can try again with some long position. BUT I would NOT engage a heavy position as the ADX is not too encouraging. If turn long , place stop at 1362.

The weekly chart MACD may has gone positive but the Stochastic has gone overbought. I am paying more attention to the Stochastic because the lousy ADX which has kept falling and now at 15's. At this kind of level, we can safely conclude there is NO trend in this market. The weekly candlestick is a Doji Star which again belong to one of those candlestick that mean indecisiveness. We would have to wait for the next candlestick to make a decision.

I would  wait out for another 1-2 week before making up my mind as what this market may be going next. Basically I remain more bearish biased than otherwise. There may be some new crisis developing at Ireland as the European Central Bank has bought short-dated Irish government bonds over the past 24 hours in a bid to calm rising market volatility stemming from concerns on the creditworthiness of Irish banks. Players may get jittery again. This is reflected in the current drop in the Euro/CHF/GBP and USD surges in the last 2 days .