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FCPO - A Correction
Finally Come - 3/27/2014
While the market experts have all by now turned extremely bullish on this market, I have been warning on an overbought and overheated market for the past 2 weeks. And a correction finally came last week when price closed below the top band on last Wednesday and that closed off my long positions. And this was followed through with the MACD turning negative on the next day. The Stochastic went below its 80's level on last Friday. The ADX has begun to fall from above the DMI, this is the best confirmation that the prior trend has ended. The usually slow reacting DMI remains positive but the D+ is fast falling while the D- is fast rising, this is indicating the buyers are losing confidence fast.
I sold the market on last Thursday when price went lower than the signal day low and place my stop at the top band. I have to be very careful on the selling as it is against the greater bullish trend. The MACD is "far" above its zero signal line which means the market is still a bull dominated market. But since there is a bearish divergence at the Stochastic , I do expect the current correction to be a sizable one.
The weekly chart's bull is still not in trouble as the MACD , Stochastic and DMI stay positive . Price stays above the top band but the black body Japanese Candlestick is confirming the steam losing momentum. The rising ADX confirms the current trend stays intact.
The bigger picture bull cycle is not over yet but the immediate time parameter is confirmed overbought and overheated so we are now experiencing a retracement. And the dwindling US Dollar has been helping to bring down prices.
While the market experts have all by now turned extremely bullish on this market, I have been warning on an overbought and overheated market for the past 2 weeks. And a correction finally came last week when price closed below the top band on last Wednesday and that closed off my long positions. And this was followed through with the MACD turning negative on the next day. The Stochastic went below its 80's level on last Friday. The ADX has begun to fall from above the DMI, this is the best confirmation that the prior trend has ended. The usually slow reacting DMI remains positive but the D+ is fast falling while the D- is fast rising, this is indicating the buyers are losing confidence fast.
I sold the market on last Thursday when price went lower than the signal day low and place my stop at the top band. I have to be very careful on the selling as it is against the greater bullish trend. The MACD is "far" above its zero signal line which means the market is still a bull dominated market. But since there is a bearish divergence at the Stochastic , I do expect the current correction to be a sizable one.
The weekly chart's bull is still not in trouble as the MACD , Stochastic and DMI stay positive . Price stays above the top band but the black body Japanese Candlestick is confirming the steam losing momentum. The rising ADX confirms the current trend stays intact.
The bigger picture bull cycle is not over yet but the immediate time parameter is confirmed overbought and overheated so we are now experiencing a retracement. And the dwindling US Dollar has been helping to bring down prices.
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