FKLI - How Long Will The Market Waits ? -1/21/2013

Prices hugged along the top band for the first 2 trading days before going a bit lower. Though the Stochastic and MACD continue to fall, the DMI still remain positive. With prices bouncing between the top and bottom band, it looks like this market may need some time to "ponder" on its next direction. I am placing a stop at the top band plus 2 points to protect the earlier shorts positions.
The ADX continues to fall off above the DMI which is confirming the end of the prior bullish cycle. Since it is falling, it means that there is little trend in the market so I would use the Stochastic as the trading tool for now. If price gives way and break below the bottom band, then we may see a new bear cycle begins. If price breaks up above the top band, then the bulls may be making another try to go higher.


Though the weekly's Stochastic and MACD remain positive, the Stochastic has now gone into the overbought zone. I would keep an eye on this one . I am also watching top band support of 1675. If price is to go below that level, it may signal the beginning of another bear cycle. Though it seems that a bear cycle may begin soon, the lowly flat ADX at 12's may make the new trade uninteresting.
Though many of the local "experts" love to tie our market performance to America's Fiscal Cliff crisis, I have said here earlier that it was nothing but a political monkey show.
Now that it becomes official that the Republicans have put up a white flag and stop fighting the President on that stupid game. It would be interesting to see what other "crisis" that the "experts" can come out with in the next few days to frighten the traders and investors. While the "experts" playing out their boogeyman show, of course there are also others on the other camp that have been coming out fantastic ideas that will "save" America. Other than the fast dying trillion dollars denominated coins story, the latest is that  if the American Treasury marked up its gold reserve to current market value (circa $1600), it would create enough of a windfall to allow the Treasury to keep spending despite the ceiling. (America is the world's biggest holder of gold.)
This may be just another theory but fact is that America's deficit has been falling and December's drop is nothing short of astonishment. Yes, maybe America has taken China's advise and start taking their medication and their fiscal health seems to be improving fast.
Maybe it is about time that China should start taking their bitter medication and start addressing theirs. (like stop printing money like that is no tomorrow, cleaning up the banks' monstrous NPLs etc) Otherwise a collapsing Chinese economy is going to hurt many nations in Asia.