KCPO:- The Bigger Picture Getting Bullish - 10/31/2011

 

This market also reversed last week. It gets interesting as price successfully closed above its recent tops. The ADX has now turned flat which mean there is no solid trend in the market yet. So the next item to pay attention would be the Stochastic. It is now near the overbought zone so I would be very cautious with the long entered on last Tuesday when price went above upper band with the Stochastic turned positive. It is especially so with the last 2 days' black Japanese Candlesticks.(close lower than open)

Place stop above its recent resistance turn support now at 2945.

 

The weekly chart continues to improve bit by bits toward a possible new bull. The Stochastic has turned positive again and rising. The MACD, though remains negative, is still turning around. Price has finally closed above the lower band, by which it has flashed an initial buy signal. The ADX remains flat for the past 3 weeks, this continues to reaffirm that the bear is losing power. I am a bit concerned about the tightening Bollinger Band which may be telling us that the market is not yet ready to go.

There is a very interesting item found here in the weekly chart. While prices have been drifting from one low to another lower low (12/8 to 7/10), the Stochastic has been forming higher troughs. So at this moment, we have already a nice bullish divergence formed. So I would start to get ready for a major bull market for KCPO in the intermediate term.

Commodities market may be reacting to America's latest sets of data where they seem to be re-entering a new phase of growth. Their cars sales is roaring; new construction orders is surprising picking up; domestic buyers seem to be rushing back to the housing market; corporates' cash position and productivity figures are still up. Maybe the authors of a new book "The American Phoenix " are right when they think America is the best bright spot in the global crisis.