FKLI:- Will The Market Collapses Further ?-2/15/2011

Even price managed to closed above the lower Bollinger Band with a positive Stochastic, I waited for the next day for price  to take out the previous day high before entering new long position. But market failed to fulfill that condition, so I did not do anything. Instead I took a new short trade when the Stochastic turned negative again with price went below the lower Bollinger Band. The trade is in line with the bigger bearish picture.

Place stop at 1514.

I take note that now the ADX has resumed its ascent which is confirming a trend and a strong sell. Since the ADX is now at 29, so I would pay more attention to the MACD instead of the Stochastic.The MACD is solidly below its zero signal line and seems to be picking up more momentum. This is the first time that it has gone below zero signal line since May last year.



The weekly chart is getting more confirming bearish signals as price has now closed below the middle Bollinger Band which is the de facto 20 periods moving average. The next immediate support will be its lower band of 1482 which was briefly tested last week. Any weekly closing below that level would definitely bring out more intense selling. Both the MACD and the Stochastic continue to fall. Another new signal is the DMI which the D- has just crossed above the D+. If any new low hit by the coming week
would confirm Wilder's extreme rule for selling.

As I have warned on several occasions on the presence of bearish divergence found at both the daily and weekly chart, I feel after one whole year of bull rally, the good times for KL stocks may finally be coming to an end. With a bearish divergence found in the weekly chart, it usually mean we should be entering a brand new bear cycle. And my experience tells me that this kind of bear cycle will not be those of minor corrections or retracement type. It is usually more about those of we last seen during  1997 and 2008.  Last week I warned you of the possible return of US Dollars bull, many international financial markets  may be at major terminal point. With that my readings on the  AUD , JPY , CHF and Rinngit charts is telling they may be depreciating soon. And you should keep an eye on commodities and interest T-notes. These are  interesting times indeed .