FKLI - Is An End Near ? - 12/12/2011

 

 With the lowly ADX of less than 20's, the market has been making some really short lived moves. Again this market is turning around and hit my stop on last Tuesday. Even though price has gone below the top band but I only went in to sell on Thursday when I get an confirmation from the Stochastic when it crosses down. Though the DMI has turned negative, the MACD remains positive. The ADX has begun to fall again and the Bollinger Band is in a flat mode, so I would take this as another one of those sideway market situation. I would  place stop a bit further in order NOT to get whip out . Since price is now below the middle band, so I would place my stop at the top band which is at 1486.

I take note the daily chart has just formed another bearish divergence and with MACD just barely above the zero signal line, so you should be cautious that this market may just collapse soon.

 

The weekly chart's Stochastic and MACD remain positive and still  going up but DMI stays negative with a falling ADX . You should also take note the Bollinger Band has begun to "squeeze" with prices caught inside. So I would call this another sideway mode. I would pay more attention to the Stochastic for a possible negative cross. When if that happens, it would compliment the bearish reading at the daily chart.

With UK and Hungary  opt out of the new treaty and Sweden and  Czech Republic probably follow next,  the  breaking up of EU looks increasing inevitable. Discords among major EU players has surfaced, it would just a matter of time before they start bringing out their hostility in the open. And most important of all is that you should start worrying about their crisis spreading to Asia. Despite what some of our leaders say otherwise, I do not really think we will be able to stand up to another 1998 kind of crisis.