FKLI - Selling Continues As QE3 Fails To bring Joy - 9/24/2012

 

The market was not able to follow through but instead started to go down again. I got stopped out on last Thursday when it went below the prior day low. But I have not enter any new short because the Stochastic has not complimented the price going below the middle band signal.

We may seeing another sideway market situation as the MACD has gone negative but the Stochastic is still positive and rising - a contradicting indicators scenario. The ADX has turned flat. Both these are classic signs of an undecided market. I would start selling if when price crosses down the lower band. This is because both the MACD and DMI are negative and the with the bearish divergence, so taking side with the bears would be of more prudent. But again I would keep the prior day high as stop for my new position.


 

 The weekly chart is getting increasing bearish as  the MACD, Stochastic  and DMI are negative. The Stochastic is fast falling and may be crossing down the 80's signal line. If so, that would flash an initial sell signal. But the ADX is continuing to fall and the DMI seems to be wiggling, both these are signs that the market is caught in a sideway situation. I am paying attention to the bearish divergence formed at the MACD. When this is formed in the weekly chart and it usually mean the whole bull cycle is coming to an end. If price breaks below the middle band, it may mean the beginning of an  end.

Some may begin to wonder if the latest QE is failing to bring joy to the market.