FKLI -  A Storm Brewing ? - 4/22/2013

 



 
The market did another false break last Tuesday when it gapped at open and then recover all the way upward. I did not do anything because the Stochastic remains at above the 80's. With the ADX 'dead" (flat)  at 13's, I expect this market play havoc with the traders with many false breakups and breakdowns. But I will still take any new sell signal if when it next appear.
The Stochastic is negative and now slowly drifting toward the 80's signal line. Any crossing down that area accompanied with confirmation from other indicators and prices should warrant a new sell. 1693 level should be watched too as it has became a recent support. The MACD remains positive but seems to be dipping down and we may see a negative cross down by the coming week. The DMI is also remaining positive but the ADX is just dreadful. It has been flat at 13's for the past 9 trading days. I also take note the Bollinger Band is slowly tightening. Both these 2 are pointing to a listless trading mode. But you must also remember a "dead" ADX usually mean a big storm is coming.

The weekly chart's bull remains as all the 3 indicators remain positive and rising and price stays above the top band. But this bull is stale as the dreadful ADX continues to stay flat at 15's which is telling us there is no new trend yet. I would watch the Stochastic for any new signal. Last week's new high failed to erase off the multi bearish divergences, so I prefer to take side with the bears for a possible onslaught.

Now that the greatest election battles are finally begin to play out, it will be foolish to stay invested in equities. I would divest and put aside the cash for some possible great investments ahead in the turbulence. Strictly from the chart view, if the incumbent should win big, we would not see the presence of bearish divergences. I am not too worried about a change of government as I have firmly believe that the government really need some smart people in the cabinet instead of the horde of dickheads that have been occupying the seats . But I am more worried about the possibility of a hung parliament. That can really cause havoc to the local markets.