FKLI -  More Sightings Of The Bears In The Bushes - 8/27/2012

 

The market reopened last week after the long holiday and tried to make another push upward, but again it was not able to stay there. Both the Stochastic and MACD are negative , with price closed below the top band, I would sell this market when the Stochastic crosses down its 80's signal line by the coming week. The ADX continues to fall with DMI gap dwindling into a narrower range, both are pointing at a listless market.
But you should take note that with last week's high, the chart has formed another bearish divergence. The real action of massive selling may occur when the MACD crosses down its zero signal line.

The weekly chart remains almost the same as the previous week's. Price is able to maintain above the top band with a positive MACD and DMI. The ADX continues to rise, so that is lending some strength to the bulls. But it is still below the 20's, so its strength is doubted. I would continue to watch the top band as a support. Any breaking down below there should be considered as a signal to sell.

The market continues to drift higher without much conviction. The bearish early warning signs are already there. So if you are buying, keep stops tight. Even though I can see the bears lurking behind the bushes, still I would trade the long signals when they come on. But taking caution on those trades would be prudent.