FCPO:- Renewed Selling ! -3/14/2011

Last week I warned off the rebound would be one of those short lived one due to the falling ADX. It turned out to be true when market reached a temporary top at the 20 periods moving average on last Monday and then reversed downward for the next 4 days. I applied the stop at previous day low minus 2 points and got out on last Tuesday.

I sold the market again when price went below the lower Bollinger Band with the Stochastic confirmation
on last Friday. I am placing stop at 3477. Please take note the ADX has now begun to rise with the DMI expanding outwards which is telling us that a new trend has emerged. Both the negative Stochastic and MACD are confirming this move. I would pay attention to its previous low of 3336, if price closes below this level, it would mean more intense selling will emerge.

                             


The weekly chart has turned uglier as prices have finally closed below the 20 periods moving average (i.e. the middle band) . Both the Stochastic and MACD are negative and continue to fall . The lower Bollinger Band of 3331 will provide the final support. When if prices close below that level, it would be official that this market has gone to the bears. By the coming week, the DMI negative crossing will be providing another sell signal.

Stifel Nicolaus of equities vs. commodity prices argued the grand super  cycle may be  coming to an end soon. Commodities have falling recently and many of the technical analysts seem to believe that the secular commodity bull market is over. So while some local experts think KCPO will hit 4,000, maybe you should start taking side with the bears ?