FCPO - Bulls Exhausted But Big Picture Still In Their Favors - 11/11/2013

 If you are using the top band as stop , then you would had got stopped out on last Thursday. The ADX has also gone above the DMI, this is a good confirmation that the market is overbought. The ADX has also gone flat, it means the prior trend has stopped, though it may be temporarily. The Stochastic has crossed below the 80's level and the MACD has also crossed down its moving average. I will be selling the market on the coming Monday when if price goes below 2506 as price is now below the top band with the Stochastic crossing down its 80's level. But since the bigger picture charts (weekly and monthly parameter) are still harboring the bull, so I will be cautious on the new sell position. I am adding an additional rule on the sell - if price closes above the signal day high of 2540, I would close off the short position.


 
The weekly chart still favor the bull as the Stochastic and MACD continue to climb upward. The MACD is now solidly above the zero signal line which confirms the bull's control. The ADX continues to rise and it has now reached the 20's level. This is telling the trend remains intact. Price is a black body Japanese Candlestick (close lower than open)  but it has not done any damage to the pattern as it is within the white body of the previous week's big white body candlestick. The former resistance of 2485 now turns into a support. If price breaks below that level, then it may warrant a new analysis of the chart. Otherwise the super bull reading still stand.

There is an item I forgot to mentioned earlier in the past few essays and that is the DMI has turned positive on mid October. This is significant because this is the first time since mid May, 2012. DMI is a very lagging indicator which I use it actively in reading the daily chart. But when at the weekly chart, it is even more lagging. But when it flashes a buy/sell signal, it is usually more reliable than others.

I continue to hold  my super bull reading and view the past week price action as a retracement . Sometime when the market charges too far within a short time, it usually need to retrace a bit before gather more strength for more to come. But having said this,  certainly I do NOT blindly hold on to my earlier formed opinion and continue to hold on long positions even the market has broken down. The US Dollar has resumed its upmove and even the soyaoil and bean have begun to move up again, these may help the FCPO to resume its earlier path.