FKLI - Still The Same game Plan - Trade Very Short Term Only-2/27/2012

Though I am not too convinced about the latest buy signal but I still stick to the trading plan and bought again when price went above 1565. Almost immediately soon afterward I had to close the position off when price went back below the top Bollinger Band of 1560. I engaged in new short position with price below the top band and a negative Stochastic. This may be a little imprudent as the Stochastic still has not cross down its 80's signal line. So I have to place an immediate stop at 1569 just in case the market flip flop again.

Flip flop in the market is very common when the ADX is flat and below 20's. That is why I have been advocating very short term trading for the past few weeks. As there is another new bearish divergence at the indicators, so I would watch out for a drastic correction soon. But with the low ADX, the market could drag on for a while before that happen. But I would place more emphasis on any new sell signal over the buy signals.

The weekly chart is still fairly nice as price stays above the upper band and MACD is still rising. But the ADX is still falling and now it is below 20's. With this, I am paying more attention to the Stochastic which is now inside the overbought zone. The Japanese candlestick is a small black body  . So I would be extremely cautious for a possible reversal. If you are trading on the weekly chart, be prepared to take profit at the soonest.

the game plan remains same as previous weeks' - trade only very short term and be ready to take profit / loss at the slightest as major reversal may be just across the horizon.