FKLI:- Can We Stay Clear Of An International Crisis (Euro PIIGs, war in Koreas )  ? I Don't Think So. - 11/29/2010

This week I would like start with the weekly chart first as I feel there are important signals flashing in there. You should pay attention to the prices as they have now closed below the upper Bollinger Band. For the more strong heart traders, this is usually taken as an initial sell signal. The Stochastic has already turned negative and now falling toward the 80's signal line. When if it crosses down there, it will provide another sell signal. Even the MACD has begun to turn around and may be turning negative by the coming week. The weekly ADX has also started to turn downward , confirming the prior bull trend has lost momentum and may even signaling its end.

Overall the weekly chart has started to withdraw from its previous  bullish mode.

The daily chart Stochastic is turning positive one day and negative another. I would pay great attention to this indicator as if when it crosses down its 20's signal line, a bigger bear may just jump out. This is especially so when the negative MACD is now fast falling towards its zero signal line.  The ADX has stayed flat at 24's, indicating there is a lack of trend in the market. This explains prices jumping above and below the lower Bollinger Band. But a word of caution here, as the ADX is at 24's and not below the 20's, any new directional changes here could be one of those frightening type. This is especially maybe the case here when the D- stays above the 30's.

The current readings is that with all the indicators turned negative and falling and price closed below the lower Bollinger Band. On top of all these, there is the overhanging bearish divergence, I firmly remain convinced on the sell side. And if you have already committed the sells, place stop at 1518.

As the Euroland PIIGs crisis coming back in prominence (unlike a local "expert" claimed that they do not matter a great deal, when with most of Germany and French banks' high exposure, any meltdown  matters very much) , by the coming week we may see their next candidates , Portugal and Spain taking the centre stage. And we may even see a re-appearance of Greece. On our side of the world, with Australian Dollars finally breaking down , coupling with their high inflation and property bubble, I would not be too surprise that Australia becoming the first in Asia to face the music.