CPO-8/6/09 - Bear is near ?

The first thing I notice from its daily chart is the ADX continues to fall and it may go below its 20 signal line soon. The other prominent item is the MACD is negative and falling again while the Stochastic is positive. Both indicators contradict each other. Both are confirming a lack of trend in this market.

The daily MACD fails to confirm the earlier buy signal flashed by the earlier rising Stochastic which crossed up above 20 signal line last week. So if prices cross down the lower Bollinger Band again, you may want to re-engage short positions. But due to the falling ADX, I would suggest you not to take up too big on your positions. If you engage new short positions by then, place stops at 2605.


The weekly chart also begin to look not too positive. The Stochastic has just crossed down its 80 signal line, offering an initial sell signal. While the MACD is still positive but it has begun to lose momentum as it has started to form a flat top. Prices has closed dangerously just hovering above the upper Bollinger Band. By next week if it goes below it, then it will be flashing another sell signal.

If the current bear moves turn into a reality, I expect CPO to go below 1,900.