FCPO - It Is Still A Listless Market And Maybe Some Correction - 10/20/2014

 

The market has gone for some correction. Last Monday price continued to stay below the top band and then got a confirmation from the Stochastic. But the filter rule only kicked in on Wednesday when price went lower than the signal day low. I initially use the middle band as stop and then lowered it to the bottom band as price continued to fall. The position was taken out by Friday when price went back up above the bottom band.  A smallish profit trade but expected in a listless market mode. The ADX stayed flat for most of the week and it has now begun to fall again. The D+ and D- are within the 20/30 band, both are telling us that the market has no strong direction yet. Since the MACD and Stochastic are still falling, so pay more attention to sell signal over buy.


 

The weekly chart's MACD and Stochastic stay positive but the DMI remains negative with the D- hooking up again. The D- is telling us the sellers are getting brave again and came back in the market. The ADX has stopped falling and gone flat, so this is hinting that the prior upward correction cycle may has ended. I would watch the bottom band of 2070 as an important support.  If price is to go below that level, then this market may see another round of massive bear cycle again. Bear in mind that I have mentioned here numerous times that the MACD is still below the zero line, so any upward moves (as happened in the last month) are merely a technical rebound in an established bear cycle.

I have also mentioned the longer time parameter chart seems to be subtly hinting a new bull cycle may be forming, so I would actually "welcome" another round of strong sell down so that the whole cycle can be completed so that the brand new cycle can begin to kick in. Of course these are merely a projected opinion and never to be applied in trading. In real world trading, I obey obediently to my trading signals and never allow my own or others' opinion to cloud me.