FKLI:- It Is Bouncing But Do Not Get Too Blissful - 3/28/2011

Yes, we do get a minor rebound so I went back to buy on last Monday. Both the Stochastic and MACD are positive and keep rising. But the ADX is really discouraging as it has now fallen below 20's. I expect whatever "rally" we are seeing now will be flippy and short lived. So I suggest we should keep stop tight, like previous day low minus 1-2 points. Maybe you should also adjust the Stochastic to a faster version for the time being.

                        

The weekly chart's ADX continues to fall and is below 20's. With prices lingering between the upper and lower Bollinger Band, both are confirming a classic case of a trendless market. MACD is still falling , but the Stochastic seems to be turning, this may augur for a short term bounce. Unless we see prices close above the upper band and the ADX start to rise, we cannot say there is a bull in this market.

I continue to pay attention to the bearish divergences in the chart as I think the PIIGs crisis will eventually spread to more countries. The next one after Portugal should be Spain. I do not think Germany , no matter how strong they are, can forever go to save these poor cousins. I am also keeping a keen eye on the Middle East, I suspect that a war may be looming as the Syria/Iran bloc may want to take advantage of the regional crisis to further their political boundaries. I am watching intensely at any Israelis responses. It may look strange that the US does not want to lead the current offensive against Libya, maybe they are getting ready for another ? Many of the FX and major commodities charts are still displaying major terminal signs. So with all these, I think they will eventually break our market's back.