KCPO:- Is The Market Getting Overbought ? - 11/2/2010

Last week was another week of Mexican Jumping Beans action. Even if you are in the buy side, you would still need a very strong heart to sit through all those intraday actions and openings of gaps here and there.



 

Please take note that the ADX has gone on top of the D+, this is usually a good indication that this market is overbought. Since the current trend has been an extremely strong one, I would not use the Stochastic to tell me when it is overbought. And if it starts to drop from here, it would mean a  temporary or otherwise,  end of the current bull trend. Meanwhile the MACD has also started to roll over its top.

Place stop at 3043.
 

 
The weekly remains as bullish as ever. MACD and ADX are still rising. But you should pay attention a bit as prices are getting "too far away" from the upper Bollinger Band which is a sign that the market is getting overextended, it usually come back down to hug the band again.

As the US Dollars may need some more time before it starts its path to return to its mighty throne, so I think CPO bull may still have a little more time.