Saturday, October 4, 2014

FCPO - Retracement Next But Big Picture Continues To improve - 10/6/2014

My buy position was stopped out on last Monday when price went below the prior day low. Price has been stumbling along and then it went below the top band on last Thursday with the Stochastic gone negative. I would enter a shorts trade when if price go below 2137 with the Stochastic preferably goes below its 80's signal line. Please take note the Stochastic has already formed a minor bearish divergence with lower peaks. The MACD stays positive but has been tilting its head. The DMI manages to stay positive too, but the D+ has now crossed below the 30's line. This means the buyers have been leaving. But then the D- has also been falling, so that is telling us the sellers were not sure of their power yet. The ADX is still falling, so the end of the prior cycle reading stays legitimate.

The weekly chart continues to tilt toward the bull. Price stays above the bottom band. The MACD is still marginally negative but we may be seeing it turning positive by the coming week. The Stochastic continues to rise. The slower reacting DMI is still negative but the D- continues to fall and it is coming nearer to its 30's signal line. This is confirming the sellers have been running. But the D+ stays flat below the 20's line, so this is telling me that the buyers are so not as brave as they look. Overall as long as price can stay above the bottom band, then the bull will still have a chance to go further.

At the monthly chart, all the 3 indicators stay negative. But there are 2 signs that may pointing to a possible reversal soon. First is the MACD which has begun to show sign of making a turnaround. Second is the D- which has dropped off from above 30's signal line, this is telling us the sellers have begun to leave. Of course both these 2 are merely "slight possibilities". But there is one piece of evidence that may be considered as the MOST bullish would be the monthly Japanese Candlestick which has formed a Piercing Line. This means price went below August's low but managed to closed back up significantly higher at the end of September. This is usually read as an extremely bullish sign that there may be reversal soon. So I would watch out for a close above the bottom band or a close above 2222, those could confirm a major reversal.

The short term market may see some retracement but the big picture continues to get rosier.

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