FCPO - Will The Bulls Gate Crash Soon ? -5/13/2013

I went in and engaged a new short on last Monday when price went below the last signal day low of 2243. But the trade quickly turned sour when price went above the prior day high on the next day. I have been keeping a very tight stop for the past few trades because this market has been getting difficult to trade with increasing smaller time range.

The market has made another turn to the bullish side when price went above the bottom band with the Stochastic turning positive on last Wednesday. I bought in on last Friday when price confirmed the signal day high. On the same day , price also broke above the top band which is another bullish signal. By now we have both the Stochastic and MACD turning positive while we may see a positive crossover by the coming week if price continues to advance. The ADX has begun to fall which is signalling an end to the prior down cycle.

I have been extremely bullish about this market since late last year when an extraordinary bullish triple bottoms is found. At around the same period there was already a bullish divergence found at the MACD, but the market was unable to breakout substantially but it has been caught in a giant range. Last week the market went to test a lower low on 6/5 as compared to 22/4 low, both the Stochastic and MACD has formed another new bullish divergence. With these, I am really getting very excited about a possible monstrous bullish move.

I am placing stop at the middle band and when if price advances further, I will move the stop to the top band.

 

The weekly chart is getting oversold with Stochastic inside the oversold zone and seem to be turning around. So is the MACD which has already begun to hook up. Price is still unable to close above the bottom band which is necessary for me to call the whole bear cycle over. The ADX continues to stay flat which is telling us there is no trend in the market. As I said here last week, this market is getting interesting if price is unable to break below the long term support of 2220. If price stays here for a while or start to go upward, the MACD will form a new bullish divergence which usually is a strong confirmation that the prior bear cycle has ended. In another word, if the bull is able to come back, then its forces would be those of shock and awe type.
So I am watching for a possible price break above the bottom band as a strong signal to buy next.

A return of a strong bull in the FCPO market is more welcome than that in FKLI market as this is a more " genuine" move.