Monday, May 26, 2014

FKLI -  It Is A Bad Feng Shui Year - Expect Bloodbath In Markets - 5/26/2014
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I began to tighten my stop by using the prior day low instead of the original top band. It is because the Stochastic has already gone into the overbought zone and since the ADX is low at 14's area. So my stop was hit on last Tuesday. A new sell signal is flashed on last Thursday when price went below the top band with the Stochastic turned negative. But since it was still above the 80's line, so I would wait for another day to see it crossing down below the 80's signal line which I finally got it on Friday. So I would sell on the coming Monday if price can go below the signal day low.
As at last Friday, the MACD has also gone negative. The DMI remains positive but the D+ is declining and D- rising above the 20's signal line. This means the sellers are getting brave while the buyers have begun to quit their positions. But the ADX has been staying flat for the past 5 days at 14's, so there is no confirmation of a new trend yet.

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The 3 weekly chart indicators stay positive. But the Stochastic may turn negative by the coming week. Since it is already inside the overbought zone, so I would pay a lot of attention to it. The Japanese Candlestick is a black body. It merely reflect a close that is low than the open. There is nothing of significance here yet. But if price closes below 1863 or the top band, then the Japanese Candlestick would confirm a reversal. The ADX continues to stay flat at 17's at the 7th week. No strong move indicated here.
The bearish divergences formed at both the daily and weekly chart are very clear. All I am waiting now is a confirmation from a price breakdown. Despite all the "rosy" statistics that came out on the country's growth, I have been getting more and more bearish. When a negative divergence appears in a daily chart, it could just be a major correction. But if they appear in a weekly chart , it usually mean we are near/at a major market terminal point. This kind of correction could last for months or even years. And if you subscribe to the Feng Shui school of thinking, you may have noticed that this year is really bad - there are conflicts and disasters popping out everywhere . So do not be too surprise when disasters also spread to the financial markets.

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