KCPO - Bulls Failed For Now But Don't Lose Hope Yet - 11/26/2012

Last week as I was expressing my excitment on the double bottoms formation and bullish divergence, I also mentioned that the MACD was relatively "far" from its horizontal line, so I would be cuatious about my long positions. And I was right on that one, the market began to soften again since last Monday and continued to dip lower and lower. I closed off my long positions when price went below prior day low on last Tuesday. So far I did not engage in any new positions as both the Stochastic and MACD has failed to compliment the price below the middle band sell signal. Both has remained positive.


 

The weekly chart remains bearish biased as MACD, DMI and Stochastic are negative. The ADX is still rising and has not gone flat  so this is telling us that the bears are still in control. Though the lower D- peak and higher Stochastic trough which act as subtle warnings to weakening bears, but I would need to see price closing above the bottom band in order to abandon the bears.

I am still a little bit biased toward the return of the bull analysis of this market. Last week I had already bought in US bean oil and so far that trade has been rewarding. Of course I do not get emotional or egotistic but I am basing my "feeling" on the KCPO's double bottoms formation and bullish divergence. This is very important if you want to make money from any market, always ask yourself :- "show me the evidence !" Recently I was telling my friends that I think Obama will win again. Some of them laughed at me saying I begin to talk like a Feng Shui Lo. But I explained to them I said so because the DJIA chart shows whenever the market rallies 6-9 months before the election, the incumbent will always win 95% of the time. So that is like reading a chart, it is all about evidence in historical "data".