FKLI - Is This A Dead Cat Bounce ? - 9/2/2013

 
My  stop was hit when price retraced back above the bottom band. The Stochastic has also turned positive and crossed above the 20's signal line, both these are signaling a new buy. I would turn  long again  on the coming Monday if price can go above 1723. The MACD and DMI remain negative and the ADX has turned flat, I am reading this as a counter-trend move in a bigger bearish environment. So when if the long trade is engaged, I would keep my stop tight at prior day low.


 
The weekly chart remains bearish as the MACD, DMI and Stochastic are negative and still falling. Even though price managed to recovered much of the week's early losses , it still remain below the bottom band. The ADX turned flat again, this means the prior trend has stalled.

 
Recent days there have been many experts started telling us not to worry about the current correction as they think this is not a prelude of a bigger sell down to come. They begin to compare our current fiscal health to 1997's and claim that we are much stronger and healthier than then. They continue to have great faith in the government as if they are god that can save the day. But when I look at the monthly chart, I certainly do not share their confidence. There is a very clear bearish divergence formed at the Stochastic and MACD with the prices. The Stochastic seems to beginning to fall from above the 80's line while the MACD is turning downward. The only saving grace for now is that price still manage to stay above the top band. If price will go below the current month's low of 1653, then we may see price really go down in a horrific way.