FKLI - Market Players Lack Convictions - 4/2/2012

As I mentioned here last week that this is still a listless market. It merely struggled on and did not actually find any major trending direction. My initial stop stays intact and on Friday, market went up again. But then the Stochastic has already gone into the overbought zone. So I would advocate profit taking whenever we can. Otherwise, tighten the stop further. Prior day low minus 1 should be sensible.

The MACD remains negative and the ADX is really lousy. It is flat and below 20's. Please take note that the Bollinger Band has been tightening. This usually is signalling some kind of explosive move ahead. So be careful. 1596 level is crucial, the market may be forming a double top.



As the weekly chart's ADX continues to stay flat and below 20's, we could not expect this market to fly high. I am paying more attention to the Stochastic which is in the overbought area for sign of a correction. If price goes below 1576 or previous week's low, it may mean the bull is in trouble.

Fundamentally I continue to be bearish biased as the government continues to mount up  debts and splashing out cash to please certain sectors of the population. It is exactly a duplication of those EU members which are in deep shit load of trouble now. Maybe this market will continue to drift or even go a little higher with no conviction backed, but after the election, we should see the market correct downwards in a big way.