KCPO - It Is A Dead Market - 4/15/2013

 

Prices have been hitting here and there but never actually go anywhere. Last Monday price went above the bottom band which hit my stop. On the same day, a new buy signal was flashed with price above the bottom band and the Stochastic turned positive, so I went in and bought the market the next day when price went above the signal day high. again the trade was another frustrating one as price quickly went back down. Instead using the lower band as stop, I decided to use the prior day's low as my stop as I am getting increasing uncomfortable with the "dead flat" ADX. It is now fallen to 11's. So I am also using the prior day high as my stop in order to limit my losses or protect whatever smallish profit it can generate. The market seems to be forming another double bottoms at 2335. If this holds, then I would have to take a deeper look at the whole situation, but if fails, then maybe we will see some really nasty bang down.

In a lowly or flat ADX situation, most trading text books would advise students refrain from trading. I tend to agree with that but I also notice whenever a flat and low ADX usually will bring forth the next explosive massive move. That is why I would rather take some small losses than misses out the big one. ADX is a dinosaur type of indicator which means it usually a bit slow to react, that is "unfortunately" its intrinsic behavior, so we just have to work around that.

 

The weekly chart remains almost the same as last week's. The Stochastic is negative and still falling. The MACD, though remain positive, is now turning downward. we may see a negative crossdown in the coming week. The DMI remains negative with the ADX continues to fall. Price is still got stuck within the bands. The falling ADX and price within the bands are telling us that there is no new direction in the market. The Bollinger Band continues to squeeze tighter, this is forewarning us that an explosive move may lie ahead.

If the market can explode upward, the next new government will really appreciate the additional revenues and blissfulness that it brings to the planters and their family. But it is going to explode downward, the new government will face the unpleasant task of facing the FELDA and other smallholders as their bring home money will be reduced. And if price is to go below their cost of production, then the government will have some really big problem.