FKLI - Market Broken Down But Refuse To "Die" - 4/21/2014

The market reacted to the earlier Dow Jones' weakness and went further down last week. But price was not able to go below the 1845 support level. After several attempts, price was still able to regain lost ground and close above that level. The Stochastic and MACD remain negative and the DMI has just turned negative. But the ADX continues to fall and it has reached 13's and I take note that the Bollinger Band has begun to "squeeze". This is a classic confirmation that the market is caught in a listless mode. But as a band squeeze also mean a monstrous move will be forthcoming soon, so take caution.

I have already engaged in a new short position and I am placing my stop at above the recent high of 1856.50.


 
The weekly chart's indicators are still rising and remain positive. Price briefly went below the top band but was able to close back up above it. But price was not able to go above the previous week's high and it is obvious that it has been caught in a sideway mode for the past 3 weeks. The ADX stays flat at 16's for the past 5 weeks which reflects the current listless situation. Though there is nothing dramatically bearish at the daily chart, the bearish divergence still remain at the weekly chart. So this is something that should keep me from getting bullish above the market. The 1845 support level remains vital for the bull to cling on to their cycle.