FKLI - Market Should Be "Very Dead"- 5/14/2012

The market continues to drift last week. I closed off the longs when market went below prior day's low on Wednesday and did not do anything as no new signal triggers. The ADX has stayed flat for the past 9 days at 17's. The Stochastic is positive but MACD is negative. Contradicting indicators further confirm a listless market. Prices also seem to be caught inside the band.

Due to the ever presence of the bearish divergence, I would continue place more prominence to a new sell signal over a buy. The DMI is also negative, so I would sell when if price goes below 1572.





The weekly chart's indicators are confirming a sell as the Stochastic has already crossed below its 80's signal line and the MACD has just crossed below its moving average. BUT the ADX continues to fall, and it is now at a lowly 13's. The DMI is also continuing to wiggle as the D+ and D- are both at 21's. As explained here last week, when both are of same value, it means neither the bull nor the bear is having the upper hand over the other. I also take note that the value of DMI has also been dropping, when if they go below 20's , it would mean this market would be even "more dead". Also take note that the Bollinger Band has begun to tighten. So like the daily chart, I favor a sell strategy because of the negative indicators .

Everybody is holding their breath for Najib's announcement and the next new direction. The magic of technical analysis is that by  looking at all the subtle hints in the charts, we can educatedly predict market should fall off its bottom after he makes that announcement.