FKLI - The Market May Possibly Reverse Again - 2/17/2014

 



I went in and bought on last Monday when the signal day high filter was met. But the trade turned out to be a dud because after price went above the top band, I had placed my stop below the top band and it was immediately taken out on the next day when the market lost 17.5 points. Of course I am not going to offer any excuse here except to say it is just one of those things in life. As at last Friday, there is no new buy signal as price is still below the top band. I should buy again when price is to go above the top band again, but I am a bit cautious as the Stochastic has already reached into the overbought zone. This is becoming vital as the ADX has now fallen below the 20's line. This is telling us there is no trend in the market. The Stochastic and MACD stay positive. The DMI went back and become negative again and it has been wriggling like a worm the past 2 days. This is another sign that the market may be caught in another sideway mode.

With the overbought Stochastic and listless ADX, I would suggest you would only buy if price can close above its recent high of 1827.50 and if that is done, you should place your stop at the signal day low.

 
All the 3  weekly chart's indicators stay negative. After the previous week's encouraging Japanese Candlestick, last week Candlestick was a Spinning Top. This could spell trouble for the mild recovery we had recently.  I would monitor the coming week's Candlestick closely as if we get a big body black Candlestick, then it may bring back the bear.  Meanwhile the ADX stays flat at 18's , so this may mean we are getting stuck in another listless situation.

The foreigners' money continue to pour out of the emerging markets which include Malaysia, so my market mentality has been more inclined to the sell side. Argentine and Venezuela already started to collapse in pieces, South Africa may be next and China's megaload of shadow banking defaults have already started to burst out of the seam. And again I hear "experts" telling us how we are "different this time" and "we are strong" as if a marginal country like Malaysia has the ability to stay out of the approaching storm.