FCPO -  The Correction Gets Intense - 2/2/2015

 

The market continues its correction. Price is staying below the bottom band. The MACD has fallen below the zero signal line which mean the market is now in a bearish cycle. The Stochastic has fallen into the oversold area. Though the ADX is low but it has begun to rise, so I would still be watching the Stochastic over the MACD.  The DMI stays negative with the D- above the 30's and rising. This confirms the sellers are getting very strong. The D+ has fallen below the 20's, this is also confirming the buyers are really running.

I continue to place my stop at bottom band. But if price can go back up for 2 days, then I will adjust my stop to prior day high.


 

The weekly chart confirmed the previous week's sell signal as price went lower than 2222. The MACD remains positive but it has begun to turn downward. The Stochastic stays negative and falling. I take note that the Stochastic has completed a bearish divergence formation with lower peaks. If price closes below the bottom band of 2144 in the coming week, then we may see a new cycle of serious selling emerging. The DMI has just turned negative with the ADX goes flat. 



 

The monthly chart is in a listless mode as price went back closing below the bottom band. The MACD is negative but the Stochastic went positive. So this pair of contradicting indicators is confirming a listless mode.

I have been harboring some bullish thoughts on this market as the longer term was forming some subtle signal. But obviously this is not to be the case now, but it is extremely important that traders must obey all the signals that their trading systems flashes. Though my supposedly bullish scenario did not materialize, but I was still able to make some decent profit from that previous long trade , just as the current short trade is as rewarding.