CPO - Return of the nasty bear - 5/10/09

I previously entered some long positions because the previous Friday's price bar closed above the lower Bollinger Band, but this market again took out those positions when it went below my stop at 2110. And I would NOT have re-entered any long position as both the Stochastic had turned negative again. All this while the D- remains above the D+ which is bearish. I would instead sold on Tuesday since price went below the lower band again and used the middle Bollinge Band as my new stops for the next few days.

After hesitating for 2 more days, the market finally gave way to a 79 points sell down on Friday. You should park your new stop at 2135 which is its recent high. I think the bear may be getting stronger because the previously flat ADX has begun to rise. This may imply that a trend has started.



The weekly chart is getting more bearish as both the MACD and Stochastic are negative. An item to be paid attention to is the MACD has crossed down its own zero signal line which is usually more bearish. The next major item is that price has now closed below the weekly lower Bollinger Band which is usually another major bearish signal.

So now we have both the daily and weekly chart complimenting each other, I think the sleepy bear might be awaken and start to show its temper.