KCPO - Renewed Selling Is Back -3/4/2013

The market collapsed on last Monday when price went below the middle and bottom band in one go. all the 3 indicators, DMI, Stochastic and MACD complimented this move by turning negative. So I have established new shorts by the closing and the next day when price went lower than the signal day low. The current market move is also supported by a rising ADX. This could mean this new bear cycle may get even stronger. I am placing a stop at the bottom band plus 3 points.

The supports for the coming week are at 2328,2290 and 2175.



 The daily chart bears are not getting support from the weekly chart as both the Stochastic and MACD remain positive , though I note that both of them seem to be making a turnaround. The bears are getting their support from the price action as it has closed below the middle band. The D- has again expand outwards which mean the selling is getting stronger. The most damaging item here would be the ADX. It has stopped falling and turned flat. This is warning us the prior bear trend may restart again. Though there is no new sell signal yet as price action is not supported by the Stochastic or MACD, I would watch very carefully if the bottom band can hold. If it fails, then new sell signal may emerge in the coming week.

I must confess I am grossly disappointed with the earlier infant bullish formations at the daily chart should ended so soon  with a mere low hundreds points rally. But I do not stick onto my opinion on the market and hold on my longs position, I turned short when there is a new signal tells me to. It is utmost important that we do not fall into our pre-determined mindset and get locked up with our trading positions. We must react to every new trading signal that the charts are flashing out.