FKLI:- The Bear Is Officially Back - 1/31/2011

Last week I told everybody that the daily chart is screwed with practically everything calling for a sell. This week the D- finally crosses above the falling D+ and prices went below the bottom Bollinger Band. These are the final bits of confirmation for the bears. You should pay attention to the MACD which is about to cross below its zero signal line which usually add more weight to the bears. What may be adding more power to the bear is the ADX which has begun to raise its head. As its current value is at 28, whatever follow may be a very strong trend.

Place stop at 1534.


The weekly chart finally flash new sell signal as the Stochastic crosses down its 80's signal line while the MACD does a negative cross down. Price has also closed below the upper Bollinger Band. You must pay attention to the bearish divergence formed in this chart. Whenever this kind of formation plays out, it is always a passport to make respectable money for your shorts trade.

Last week someone wrote in the papers trying to "explaining" (maybe more to himself) that the foreigners have not left the market but only liquidate part of their holdings in the local stocks. But I note he did not provide any evidence to support his claim. Whenever the market take a serious beating, there are always people who try to lie to themselves by saying "it is ok, ABC stock is a blue chip with solid earnings , reliable management etc , so I can hold on to them.  But unfortunately those good conditions still do NOT stop their prices getting trashed.

Same here as the futures market. Technical analysis allows us to trade the market without any emotional attachment. When the "writings on the wall" says sell, we just sell. And we can do it without getting influenced by all the "experts" rantings about how high can the market goes. Maybe the market may do another extended wave and reach newer highs later, but TODAY, it is all about selling.