FKLI - The US Market Exuberance Faded- 10/21/2013

Last Monday price failed to confirmed the previous day's buy signal as it did not go higher than the signal day's high. Instead it gapped below the top band. But the confirmation finally came on after the holiday. So if you had bought in , then use the top band as stop. But if you are like me who is a little doubtful of our market, then you should use the prior day low as stop. By which the position would has taken out on last Friday.
As far as the indicators are concerned, they are all behind the bulls. The Stochastic continues to rise, but we may see it going into the overbought zone. Remember that the ADX is still below 20's, so this indicator is still in charge. The MACD and DMI remain positive and price stays above the top band. So the game plan is :- if price goes above prior day's high, buy again. Otherwise watch whether the price can stay above the top band for possible shorts entry.
The ADX has begun to rise and I hope to see it goes above its 20's signal line in order to call it a new trend in this market. I hope price can continue to rise further and preferably strongly, otherwise if price starts to fall from here, then you should pay attention to what the MACD will do next.
 
The weekly chart finally managed to have the indicators coming into an agreement. The Stochastic stays positive and rising. The MACD finally turned positive and price just managed to close above top band by a fraction. So if I am trading the weekly chart, I would need a confirmation by the coming week with price goes above last week's high of 1808. Also a closing of above the recent fractal high of 1808. The ADX has stopped falling and turned flat and it is below 20's, so at best I would still call this a listless market.
With the oncoming budget, I think many market players would prefer to play the wait and see game. But for us traders, we would just buy/sell on any new signal and apply tighter stops as there is no new trend yet.