FKLI - The Beginning Of The End ? - 1/20/2014

 

The market did an one day reversal to the upside but did not hit my stop at 1842, then it went to continue its previous trend by losing more ground for the next 2 trading days. I am adjusting my stop to the bottom band as to protect the profit. The MACD continues to fall and it is almost going through its zero signal line which is the boundary to mark out the bull and bear zone. The Stochastic has already gone into the oversold zone. I am keeping a close eye on this indicator as the ADX has been falling and it has now fallen to 19's. Together with the wriggling DMI,  they are indicating that there is no strong trend in this market yet , so the Stochastic would be a more appropriate indicator to use to trade the market.

The weekly chart confirmed last week's sell signal by going lower than the signal week's low. The Stochastic has just crossed below its 80's level which is by itself is another sell signal. So is the MACD which has just gone negative. The ADX has stayed flat for the 3rd week now, it may not be a signal for a new trend, but it is confirming the end of the prior cycle. The DMI is staying positive but the gap between the D+ and D- is fast closing.

As mentioned here the previous weeks, there is a bearish divergence formation at the chart so I would getting myself prepared for a possible major market breakdown soon. This should coincide with the fundamental sides of our nation's economy as we may be near to end of our road soon.