FKLI - Still No Clear Direction- 3/26/2012

 

The market went to test the middle Bollinger Band twice during the past week but did not close below the level. So my planned shorts did not materialize. Instead market went back above the top band with the Stochastic turning positive again on last Wednesday which triggered a new long position. I did not engage a large position as the MACD is still negative and the ADX has been staying flat for the past 4 days at 19's. I continue to view this market as a listless market. Place stop at1575 initially, as when the market moves higher, tighten stop to 1585 or prior day low minus 2 .



The weekly chart indicators are still contradicting as the Stochastic is negative and falling while MACD is positive and rising. The D+ seems to be recovering and begins to expand outward again. This is showing the bulls are regaining some strength. Japanese Candlestick is a white body which closing higher than the previous week's closing. With the last week's Doji and a black body Candlestick 2 weeks ago, this week's white body is confirming a reversal. But as ADX is still flat, we should see a slowing creeping market.

Though with the presence of a bearish divergence, it looks like the "market god" is still willing to let the market collapse just yet. So I would continue to play to whatever new signals first before another major sign appear across the horizon. But meanwhile, keep this in your mind:- there is nothing too bullish about our economy as the government is still not willing to bite the bullet by overhauling our nation's economic structure wholeheartedly but continue to give out goodies when we cannot afford them. Another point you should remember is: as the US economy continues to improve , many hot monies will soon leave those so called emerging market and start go home.

Many of Malaysian media may has completely missed out a news last week on the "new Middle East" item as America is confirmed sitting on a hundred years oil and gas reserve and she has already became a net oil exporter. Try visualize  this:- when America starts to pump money into construction of new oil refineries and pipelines (something they have stopped doing so for 4 decades), American economy will enter a brand new phase of super boom. Strange as it may sound, that is exactly what the Eastern Feng Shui masters and western astrologers have been predicting. 2013 will see America begins her next "shock and awe" cycle of super bull.