FKLI:- The Market Is Still "Thinking"-6/20/2011

The market fell to a lower level but still there is no major directional move yet. The ADX fall to a new low of 9's which is confirming the current lack of trend. Both the Stochastic and MACD are negative but the DMI is positive, another classic sign that the market is in a difficult stage to trade.

The current game plan is that you should trade one time parameter lower, that is go trade the intraday chart where you may still able to make some money. Unless a new trend emerges, I would keep off the daily position trading for the time being.

 

The weekly chart remains as like the previous week's. The Stochastic has reached the overbought zone, I am watching out for a reversal at around this area. The MACD stays stalled and remain negative. The bright spot is that price is able to stay above the upper Bollinger Band. The ADX stays dead at 10's while the DMI continues to wiggle. All added up to a conclusion that this market remains directionless.

As both  the daily and weekly  ADX stays at these low levels, the more explosive I expect the next move would be. This seems to be coincident with the current financial crisis happening in the EU PIIGs . Currently our market seem to at the fight or flight mentality junction when we are still contemplating.  What happens next would be either our market eventually "believe" the worst is yet to come and start selling the market or they "believe" the worst is already over and the market go do another wave of buying. But with the presence of a bearish divergence found at both the daily and weekly chart, I continue preferring to place my bet on the sell side rather than on the buy side.