FKLI - Super Bear May Be Already At The Door - 11/21/2011

 

I take note that the ADX has stopped falling and has been staying at 13's for the last 2 days. This coincides with prices closed below the lower Bollinger Band. With a falling MACD and Stochastic, I am asking :- could this be the beginning of the great fall ? A stalling ADX usually mean the end of the prior trend or a likely beginning of a new directional move.

With the presence of bearish divergences, I would like to test the water with some initial shorts placed in positions. Since the trend is not yet started, I would place my stop a little higher away in order NOT to get whipped out by erratic emotion in the market. Placing stop at above the middle band or top band would be logical. It depends on your risk appetite.

The DMI has gone bearish and I would add on to the shorts when I see the D- crosses 30's or the ADX crosses 20's .

 

The weekly chart looks like it is turning indecisive as the Stochastic continues to rise but the MACD seems to be losing momentum and may turn around by the coming week. The ADX continues to stay flat and the DMI remains bearish. A damaging piece here is price has failed to hold above the middle band which is the 20 periods moving average. If prices close below 1440 by the coming week, then it would mean the prior up move  has officially ended.

Now that the PM has announced the election would not be held in near term, the "experts" have ran out of excuses to talk up the market. Chart wise, there are bears written all over it. The only other possible scenario would be more side way movement before the big one arrives.

Meanwhile the EU fires continue to spread all over their kingdom, now Belgium and a few smallish eastern European countries start to appear on the "next to blow" candidates list. And yes, Spain is also back on the list too. The deeper the  EU is going into the abyss , the more likely America is likely to be in position to re-draw the whole future global power landscape according to their image.