FKLI - The Selling Finally Begins -9/10/2012

 

After drifting for the first 2 days, the market suddenly decided to act out the bearish setup that I have been talking about for the past 2 weeks. Price started to collapse below the bottom band on last Wednesday and went further down in an even bigger drop on the following day. The Stochastic and MACD are falling and the MACD is about to fall through its zero signal line. That line is usually viewed as the place to determine the bull and bear boundary.  The ADX and D- are  jumping up confirming the strong new trend .

Last Friday Japanese Candlestick is a Doji which basically mean price closes beack near to the open. This should be read as the market players were undecided of what to do next. So if you want to protect your profit, then maybe you would want to place a stop at the day high of 1618 and add some. Get back in to sell again when price goes below the prior day low.

Looking at the indicators I  think price would stay around here before going further down again.
 

 
The weekly chart is turning ugly as the MACD has crossed down the first time since mid May this year. The Stochastic has also crossed down but it is still above the 80's level. Price has now closed solidly below the top band. All these are flashing an initial sell signal. DMI is at an equilibrium now but if price can down further by the coming week, we should have another sell signal. And we also should look out for when the Stochastic crossing down its 80's line. The ADX has turned down comfirming the prior trend has ended.

Now that we get to see all the fundamentalists scuffling over each other trying to explain what is happening to the market and putting the blame on the Prime Minister's indecision of election date, rating agencies threats to downgrade us and EU crisis among other 'creative thinkings". All these are just pathetic. If one knows how to read the chart, they would seen this coming some weeks back.