FKLI:- Trade On Short Term Signals; Continue To Keep A Watchful Eye On The Bear - 12/13/2010

The market went up a bit but then nothing much spectacular. The ADX continues to drift downward which is telling us there is no trend in this market. Now as the Stochastic has gone into the overbought zone, I would suggest you should take out the long positions at higher or below the 2 day low. As the lowly ADX prevails, I would sell on any new Stochastic signal when it crosses down the 80's signal line.

The weekly chart Stochastic has flashed a sell signal as it crosses down the 80's signal line. The MACD stays negative. But price stays above the upper Bollinger Band and the D+ is still above the D-, so these are contradicting signals. In the coming week if price goes below the upper band, it would be a more confirming sell signal.

I must emphasize here again that the bearish divergence is still hanging over the daily chart. And if prices are to do a new high or a double tops here and then reverses, then we will see one more bearish divergence formed. Technically I am more bearish biased because of the divergence. Fundamentally speaking I continue to be very cautious on the EU financial crisis that continues to play out.  I do NOT think the richer EU countries can possibly hope to bail out every member that is going down the gutter. And the list of candidates are just getting mighty crowded by each passing week.