KCPO - Market's Moves Getting More Short Lived- 4/2/2013

This market definitely kicked sand on my face as my previous week's bullishness was misplaced. The market opened last Monday with a solid black body Candlestick which engulfed the previous Friday's white Candlestick which put me on alert. The market went below the top band and took out my longs positions. I only entered new shorts on last Thursday as when price went below the middle band with the Stochastic complimenting by turning negative. I am placing my stop at above the middle band and when if price continues to go further downward, then I will adjust the stop to the bottom band plus 2/3 points.

By last Friday, the MACD and DMI have also turned negative. But as the ADX remains flat at 12's, I would continue to use the Stochastic to manage the trade. The 2366 support level is important as it was tested twice recently, if prices manage to stay above , it would mean the bulls may still remain valid. But if that level is breached, then bears would rule.

 
The weekly chart is still of contradiction as the Stochastic is negative and falling while the MACD remains positive and rising. The DMI is also negative but the D- continues to fall which is indicating the bears are getting weaker. The ADX continues to fall from above the DMI, this is continued to confirm the prior bearish trend has ended. Last week's Japanese Candlestick failed to close above the previous week's white body Candlestick, no I failed to get the confirmation of a subtle bull. The Candlestick remains inside the top and bottom band. Together with the contradicting indicators, this is telling me that there is no new trend yet in this market. Despite all these lack of trend readings, my heart has been pounding a bit harder as I notice the Bollinger Band is getting tighter and tighter. A sure sign that this market is going to blow soon.

 

The monthly chart is dominated by bearish reading as all the 3 indicators are negative . Price remains below the bottom band. Generally it is read as a sideway market as the ADX remains flat at 18's.

I remain bullish biased as the previously formed bullish divergence still remain intact but the 2366 level has to be watched closely.