FCPO - Oversold Market Gets More Oversold - 8/25/2014

 
The "oversold" market continues to get oversold. Price continue to fall without hitting my prior day high stop. The MACD falls further with the gap with its moving average getting wider. This is confirming the strong strength of the selling. The Stochastic stays in the oversold area without any hint of hooking back up. Since the ADX is strong now , I would ignore this indicator. The DMI is still expanding outward with the D- reaching 45's  and the ADX reaching 56's ! These are really signs of extremity. So I would continue to call the current market overdone but it certainly does not mean the market will rebound any sooner, but I would not get too carried away with the selling.

 
The weekly chart is firmly in the grip of the bear as ever. All the 3 indicators are negative with the MACD falling deeper below its zero signal line with the gap with its own moving average getting wider. The D- has risen to 46's which is considered as an extreme level, so I would want to take caution here. I also take note that price is falling "further" away from the lower band, and sometime when this happen, price could snap back toward the lower band. But as long as the ADX is still rising, the bearish trend stays intact.

Price may go down further to test a historic low of 1964 done on mid July, 2009. If that level fails to hold, then it is going to really a havoc for this market. And the current US Dollar strength has failed to bring up this market.