FKLI - How Long Will The Market Holds Up ? - 3/3/2014

 
The previous week's one day spike was just that - a one day spike. The market never went back up to retest the 1841 level, instead prices just drifting sideway for the whole week. I closed off my position when price went below the prior day low and as there is no new signal, I just sit aside and wait.
The Stochastic is negative and look like it may go below its 80's signal line. The MACD and DMI remain positive but the ADX went flat again after the previous week's one day spike. And as it is also below the 20's signal line, so Stochastic is the indicator that we should watch closely and trade by.  The next probable trade signal should be a sell signal, watch out for a Stochastic cross down below its 80's signal line accompanied by price going below the prior day low or middle band. A new buy signal would be to have the Stochastic turns positive again with price closes above the top band. If position is done, use the recent high or low as stop as the ADX is low, so you should expect many false turns.
 
The weekly chart's MACD is negative while the DMI remains positive. The Stochastic has turned positive but it is below its 20's signal line, so I would get too excited about it yet. Price remains below the top band, so there is no buy signal yet. As in the daily chart, the ADX stays flat at below the 20's signal line, so it is a "dead" market that is NOT going anywhere far. This is also been confirmed by the contradicting indicators.
 
As we are at the end of the month, so I am taking a look at it for the bigger picture. All the 3 indicators remain positive. An interesting item would be the price action which went down below the top band but was able to go back up and close above it. By the Japanese Candlestick action, we may call this a sign of reversal up pattern. But the ADX as like the daily and weekly chart, it is flat and below the 20's level. So nothing much here too. It is basically in a tired mode.
Though all the 3 time parameter charts are saying there is no new trend, but I am staying very alert for a possible market meltdown as there are numerous bearish divergences already formed at each of the time parameter chart. Fundamentally speaking, the current RMB meltdown as I had mentioned many times earlier has already begun. And anything bad happens to China is going to affect the whole South East Asia. As massive foreign funds have been leaving the market , I am skeptical that the local funds are able to continue to hold up the market for long. There may be a war breaking  in Ukraine as Putin would find it very hard if mother Russia loses their only warm water naval port at Crimea. Though a war there would hardly affect Malaysia, but the fear factor would emerge in the markets. Fear usually means selling.