KCPO - Bull Losing The Script ?-7/16/2012

 
As warned here last week, the Stochastic was getting overbought so I wanted to protect my profit. I closed off my long positions when price went below prior day low on last Tuesday and went in for a new short position when price went below the top band with the Stochastic turned negative on last Wednesday. As the ADX continues to fall, I am worried that this market may be going into another sideway mode, so I am keeping my stop tight. As price closed below the middle band on last Thursday, I applied either the prior day high or the middle band as stop. Thus again I closed off my short positions on last Friday when prices met both my methods.

Please note the Stochastic is falling and negative but the MACD remains positive. The ADX now has fallen to 20's. All these are classic confirmations of a trendless market. So either you stay out of this market or you should trade very short term.


 
The weekly chart initial bull seems to losing steam fast. The MACD failed to continue with its hooking up and went flat and stays negative. So is the DMI. The Stochastic is still trying to cross up its 20's signal line. If succeeded, it may offer an initial buy signal providing price stays above the bottom band. The ADX stays flat  which reinforces last week's reading of this is merely a counter trend move.

With the weekly Stochastic hooking up, we may still see a up move. But the market needs a few weeks more to determine whether the bull will regain a real upper hand or this is merely a flash in the pan.