Saturday, August 16, 2014

FKLI - Is The Party Finally Over ? -8/11/2014

the previous week's sell signal did not make good as price failed to go lower than the signal day low. Instead price reversed and went back to the bottom band with the Stochastic turned positive again. I bought in on the next day when it went above the signal day high, but this trade turned out to be a bad one. Price collapsed again the following day and went below the bottom band again so I closed off the trade with a small loss. On last Thursday price continued to go lower below the bottom band and this time I have got a confirmation from the negative Stochastic , so I sold again the following day when price went lower than the signal day low. Friday's itself has yielded some respectable profit on the current trade as it lost 25+ points.

All the 3 indicators are now negative with the MACD going below its zero signal line. This is confirming a new bear cycle. The DMI is even more dramatic as the D- is now above 40's with the ADX rises above its 20's signal line. Both these 2 are telling us a strong trend has begun in this market.

The weekly chart continues to deteriorate as price has now closed below the bottom band. The Stochastic is still falling  and it is fast approaching its 50's signal line. If it crosses below there, it would trigger another sell signal. The MACD is tearing itself away from its moving average which indicating the strength of the sellings. The DMI continues to rise after turning negative last week and as the low went lower than the signal week's low, so this has confirmed another sell signal. Please take note that the ADX has now stopped falling and gone flat, this is a preliminary signal that the prior cycle has ended

As the market may has "over reacted' last Friday, so we may see some short term sideway or even some smallish correction in the coming week. But if the usual herd mentality starts to kick in, then we may see the market collapses further. But overall, as I have been writing here for the past few weeks, the market has been getting ready for a major correction as the signs were all over the charts. But I was not surprise as many of the market analysts were still singing songs of self elusions over the health of our nation's economy . As bank interests need to go up, property and stock market will have to come down, at least for the short term. It is NOT only about local property market, but this also applies to many international market especially those in UK, Australia and China. It is so sad that many people are still got suckered into those market. 

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