FKLI - Bull Flex Muscle Again - 12/30/2013

 

I sold the market on last Monday when price went below the signal day low. It ended as a bad trade almost immediately as price did not follow through the selling but instead went back up on the next day by closing above the prior day high. I have been using 2 types of stop, one is price above prior day high or the next nearest band. In this case, it is either the position is closed off on the next day when price went above the prior day high or on coming back after the Christmas holiday when price went above the top band. A new buy signal only came on last Friday when the MACD and Stochastic turned positive with price went above the top band for the second day. So I will only buy on the coming week when price goes above Friday's high.

Since the ADX has started to rise again which is confirming another new cycle, so the market seems to be getting even more bullish. But I remain highly cautious and will use the prior day low as my stop.

 

The previous week's weekly chart was full of doubts and hinted for possible reversal but how fast things changed ! The Stochastic is hooking up again, so is the MACD. Most important of all is the price which completely cleared off the recent fractal high and closed solidly as a big white body Japanese Candlestick. And it is pulling away from its recent range. The ADX continues to rise which is confirming the beginning of a new up cycle.

 

The monthly chart is also supportive of a continuation bullish move as the Stochastic has gone positive for the second month running. Both the MACD and DMI stay positive. The telling sign here is that the ADX has begun to rise. This may be hinting a new cycle is beginning. Price is also tearing itself away from its recent range, this is definitely a powerful sign for the bull.

So regardless of what I think about nation's economy, the chart seems to telling me that it is going up again. As one of the golden rules of trading :- "never fight the market". So I would just trade the current trading signal and buy.