FKLI:- Has The Correction Completed ? - 10/4/2010

As I was explaining the significance of a MACD's 'death cross" does not necessarily mean the market is dead for good but rather to see where does the crossing take place. As the 'death cross' happened at a relative high and faraway spot from its zero signal line, I warned that it may be just one of those minor corrections. And it turns out to be true as the market went back up and took out my stop 1471 on last Monday.

As on last Friday, I went back to long as price closed back above the upper Bollinger Band and the Stochastic complimented it. When the MACD can follow through with a positive cross up, this would be a more solid buy signal. I would now place stop at 1455.

And I would also watch the ADX closely. It is still falling which could be interpreted as this could be another counter trend move.

The weekly chart remains same as last week's. The MACD is still rising and the D+ holds above D-. And most important of all is the ADX is still rising. It is now almost breaking up above its 20's signal line which usually mean a strong trend is forming. The Stochastic , though negative, but as long as it is still above its 80's signal line, I would not worry about it too much.

I cannot think of any particularly bullish reason for the market to go further up except to say I would ride this trend until it fizzles out. Watch for 1536 as its next likely target.