FKLI - The Bears Flash Their Claws - 8/26/2013

I was prudent when I wrote here last week that I would prefer to wait for a new sell signal over a buy signal as bulls have been getting stale. I sold again on 19/8 when price broke below the bottom band that came with a confirmation from the Stochastic which turned negative. The already negative MACD swiftly followed by crossing down below its zero signal line which I always use to gauge the border between the bulls and bears zone. The DMI has also done the same by turning negative on the same day. The most powerful signal of all is the ADX which has now begun to rise. This is signalling the beginning of a new trend.

Though the Stochastic is now below 20's which there is already many market analysts begin to call for an oversold market and therefore advising people to pick bottom and buy low. Since there is a new trend (rising ADX)  in the market, I would pay more attention to the MACD over the Stochastic. As long as the trend continues to be strong, there is no stopping the market from taking another another few double digits losses. I am placing my stop at the bottom band.

 
The weekly Japanese Candlestick has been monstrous which took out the middle and bottom band in one go. Both the Stochastic and MACD are in agreement and have been falling. The DMI has also gone negative as the D+ has gone below the D-, if price is to go below 1702 by the coming week, it would confirm another sell signal. The ADX which has been above the DMI is telling me that the market is overbought. And it has begun to tilt downward and this is telling me that the prior trend has ended.

I think the worst is to come for the market as I am expecting international financial "assassins" should turn their attention to us soon after Indonesia and India. Let's be logical here, what is the difference between our fiscal weaknesses and those of Indonesia's ?