FKLI:- The Worst Is NOT Over But Maybe We Can See A Last Grasp Fightback - 8/15/2011

Last week the market spiked to a new low before consolidating. Though the Stochastic has begun to rise and even form a minor bullish divergence, I do not think this is the end of the current bloodbath yet as the MACD continues to fall while the ADX is still rising. This means the bears  still dominate. But on the short term, there is a possibility that we may see a minor technical rebound.

As we are now having a rising and positive Stochastic and a falling negative MACD - a contradicting indicators situation. So we may see a sideway market before it decides on its next course of action. Place stop at 1492.

Sell again or add on your shorts position if prices go below 1426.

 

The weekly chart's bear is getting fiercer. Price finally closed below the lower Bollinger Band which is a strong sell signal. The Stochastic is fast approaching its 50's signal line. Crossing down below that level would bring out more selling. The MACD also maintains its fall, watch out as when it crosses its zero signal line which will be another major sell signal. The ADX continues to rise which is confirming the current bear trend. We may see the market goes back to 1,200's.

Nothing in the Euroland is resolved. Whatever ECB has done so far are merely dispensing plasters to treat cancers. Panics will hit again and again when  more severe Italy and France problems surface. As days pass by, even the mighty Germany is starting to lose her "safe" status as the spreads on German five-year CDS contracts jumped 83% to 73 basis points in the month to August 4, with a 16% move in the preceding seven days alone. Meanwhile America's fundamentals may remain as what it was a month ago, but DJIA may be near to a temporary bottom that we may see a mild rebound. But it is not out of the wood yet. We may need to see 9700 area before we can consider a real bottom in place. America can wiggle herself out of the crisis easier than the Euroland because the Americans has total control of their own currency while Euroland does not. Most important of all is that America is a single nation entity while Euroland consists of multiple nations entities. Worst of all , some of their members are so like Malaysia which always expect handouts and subsidies.

At this moment, if you are itchy to go back into equities, do only short term trading and banish the thoughts of "investing". The big stocks have plenty more space to go further down. And NEVER listen to the "experts" who have already started to spread their sick gospel of "accumulate at low" and "buy anti-gravity stocks" - always remember this:- if they know where are the lows, they would NOT be working for people. They would be "investing" with their own money and go holidaying in the Caribbean 6 times a year.