CPO - Going no way again ? - 24/8/0

This market offered us another real time lesson as why a stop is always compulsory. I was forming an opinion that this market is getting more and more bullish as all the indicators are pointing up. Then on last Monday it whack down on our face, gapped down and took out my stop of 2395. Since a pre-determined stop is in place, this kind of abrupt move which is against your position would not leave you in paralysis or tremble in fears.

With prices crossed down the upper Bollinger Band and the Stochastic crossing down its 80 signal line, you would had initialed a new short positions. The MACD has also turned negative and the D- is now above the D+, all indicating a bearish biased market.
But since the falling ADX is fast approaching its 20 level, I think this market could range bound for a while before the next major course of direction is to emerge. Last Friday's candlestick was a long lower shadow which is usually a reversal candlestick, especially it managed to closed back up above the middle Bollinger Band which is the 20 moving average. Of course this depends on the next candlestick. Therefore I would suggest you should close your shorts if it goes 5 ticks above Friday's high and then see what it does next.


The weekly chart's ADX has resumed its fall again and since it is below its 20 level. It is confirming a trendless market. And this is also being confirmed by a positive Stochastic and a negative MACD. Since both indicators contradict each other, this is another classic sign that the market is caught in a range. Watch both the upper and lower Bollinger Band's breakouts for the next possible direction.

Since both the daily and the weekly charts since to telling us that the market is in a sideway move, so I would stay aside and watch out for new evidence before deciding what to do next.