FKLI - Will Something BIG Happening Soon ?- 4/23/2012

As noted the past few weeks, this market is still whipping around and flashing many false signals but going nowhere. The ADX has again begun to fall again which is conforming this total lack of directions. Though I have been mentioning that I am reluctant to enter new trade, but in order to stick to the trading plan, I had engaged new long on last Tuesday only to see the trade collapsed the next day when price closed below the top band. And I went to engage on new short trade on last Friday when I get a negative Stochastic complimenting the prices below the top and middle band. Will this trade work out ? I am not sure as the ADX is do discouraging. So I will use the prior day high plus 1 as stop.

Despite all that, we may have to start to pay closer attention from now onwards. I take note that both the Stochastic and MACD are negative while we may see a DMI negative crossdown by the coming week. We would need to pay attention to the market's next line of defense at the lower Bollinger Band of 1585. Another vital line of support will be at 1580. If prices fail to hold above these levels, we may see the beginning of the end for this bull market. And since the Bollinger Band has been squeezing, I would say the end would be of those shocking type.




At the weekly chart, the most significant sign would be its the Japanese Candlestick of a shooting star. This usually signify that the prior bull cycle is at its end. Whatever follow in the coming week is very important. Please take note now price has closed below the top band which may be taken as an initial sell signal by itself. The Stochastic is negative and falling. I would pay attention to the Stochastic when if it crosses down its 80's level as another initial sell signal. The MACD is  still  positive but is turning around its top, so watch out for a negative crossover on this one too. ADX has stayed flat for the 6th. week at 16's, so trade with the Stochastic rather than the MACD.

With the presence of the bearish divergence at the daily chart and the MACD falling downward and getting nearer to its zero signal line, my current mental setup has been waiting for a big massive sell down. So if you are still holding those big caps, GLCs and "blue chips", may be it is time for you to review your portfolio and start unloading some regardless how the "experts" are still telling you otherwise.