FKLI - Listless For Now But Are The Bears Waiting To Jump Us ? - 9/12/2011

I thought the market may has been caught in a range again since the indicators contradicted each other. It still look that way for the coming week.The Stochastic seems to be turning down again while the MACD has turned positive and rising. You should also pay attention to the Bollinger Band which has started to tighten which is hinting more sideway moves.

The ADX has begun to fall from above the DMI which is confirming the end of the prior bear trend (at least temporarily) but I would NOT ignore the power of the  lurking bear. If you have taken new long positions when the Stochastic turned positive with prices closed above the bottom Bollinger Band, then you should place stop at 1453. I would be more assured of a new upmove if price can close above the middle band which is effectively the 20 periods moving average. The middle band is also same as the last fractal high of 1471.

I would place new sell positions when if price goes below the lower band with the Stochastic crossing down again.




The weekly chart is getting more bearish with the MACD crossed down below its zero signal line which should taken as the "official" sell signal. The Stochastic maintains its descent. The more powerful signal here is that the rising ADX has just crossed above its 20's signal line. This is usually taken as a confirmation of a strong trend. So I would pay attention to last week's low of 1447, any breach below that level should be taken as a new sell signal.

Some weeks ago while some "experts" were suggesting in the media that the Greek's crisis was "over" , I told you here that practically nothing was resolved. And we have to be realistic enough to understand that more EU country will follow Greece with their own crisis breaking out . Among them, Italy would really be the mother of them all. And the richer EU members have been facing a lot of oppositions from their people on whether they should use their hard earned money to save those happy go lucky spending tomorrow money today members. There have been some interesting development on the currencies front, the Euro has closed solidly below the weekly lower Bollinger Band, its first time since January 2011. At the same time, the US Dollar Index has closed above the weekly upper Bollinger Band. Its first time since  June 2010. So this could be one of those historical pivotal moment putting an end to what the "experts" were telling us the EURO will replace USD as the next global reserve currency.