FKLI -  The Bears Are Testing The Water - 9/2/2012

 

The market continued to dangle until Thursday when it closed below the top band with the Stochastic crossing down its 80's signal line. I entered new shorts on Friday when price went below the signal day's low. both the Stochastic and MACD are negative and complimenting the sell signal.  But since the ADX is still falling and it is at 15's , you should expect this market to drift further before a real trend comes forth. And this listless mode is even "strengthened" by the DMI going below the 20's signal line. I also notice the Bollinger Band has begun to "squeeze".  I am placing a stop at the recent fractal high of 1659.

 I am getting increasing bearish biased because a new bearish divergence has been formed. I would get ready for the next big move when MACD crosses down its zero signal line or D- whips up above 20's or prices close below the bottom band, then I would add on more shorts position .


 
The weekly chart remains same again as the previous weeks. Price stays above the top band and the MACD is positive and still rising . The Stochastic has crossed down but it managed to stay above its 80's signal line.  The ADX is still rising but it is still below the 20's , so I would pay more attention to the Stochastic. I am looking out for a Stochastic crossing down its 80's signal line with price closing below the top band as a sell signal.

I still think the bulls are unconvincing and if i have to trade any new buy signal, I would keep the trade smallish and stop very tight.