FKLI - Are The Bears Gathering Friends - 9/9/2013

 

Price failed to go above 1723 , so I did not engage in any new trade. Though the Stochastic has turned positive and rising, but the MACD has remained negative until last last Friday. Throughout that period, we are basically have another one of those contradicting indicators scenario which is telling us it is a listless market. After the week ended, we are now having both the Stochastic and MACD in mutual consent, so I would start to look again at the buy side of the trading plan in the coming week. But since it is still a bear dominated market, I would prefer price to clear its recent fractal high of 1723 before I go in to buy. And as last discussed, I would keep a tight stop and that will be the prior day low minus 2 points.

The DMI remains negative with the ADX has turned flat. The flat ADX is telling us it is currently a listless market and the prior bear cycle has ended, at least temporarily. But since it is at above the 30's level, I would remain very cautious as the prior trend or a new trend may just blow up in our face. But at this moment, the emphasis is still on the sell side.

 

The weekly chart remains bearish as both the Stochastic and MACD continue to fall. The Stochastic is now getting below its all important 50's level which may be viewed as another major selling signal. Price has not been able to close back up above the bottom band. The DMI stays negative. All these are telling us that the bears are in firm control. The only item to watch out for is the flat ADX. The flatness is confirming the current listless market. But when prices hang around below the bottom band for a period of time, it may mean the bears have been secretly gathering more strength to smash down the market in the near future. This possibility is interesting as it also demonstrate the power of government institutions to support the market versus those of the international funds/investors on their resolve to divest the market. Cross referring to the Ringgit chart, I would believe a punishing times may be ahead for our nation.