KCPO:- Wheat Supply Scare Story Fizzles Out - 8/23/2010

Last week I made a serious mistake as I did not notice  the presence of a double tops which is usually very bearish. The market acted out on that and went below the upper Bollinger Band on last Tuesday. The move was supported by the Stochastic crossing down below its 80's level. The MACD has also turned negative. Both of these are supporting a new sell signal. The ADX is above the D+ and has started to fall. This is confirming the end of the prior bull cycle.

By the coming week when the D- crossed above the D+ or the Stochastic crosses below its 50's signal line, both would offer another sell signal. Place stop at 2602. Once prices go below the lower Bollinger Band, bring down stop to 2525 to protect profit.

The weekly chart's Stochastic and MACD have begun to stalled, though both of them remain positive. Price has closed below the upper Bollinger Band. Once we get a confirmation from the Stochastic turning negative, that would offer us another sell signal. As the ADX remains flat and below the 20's, pay attention to the Stochastic for trading signal.

As usual ,all those "fundamentals" failed to stick.  Last week's wheat supply scare fundamental stories started to fizzle out and CPO started to drop like a rock.