FKLI - Market May Turn More Violent Next- 3/16/2015

Price continued to go lower and it went below the bottom band. I lower my stop to above the bottom band. Price then corrected upward for the next few days and hit my stop on last Friday. But price failed to stay high but instead went and closed lower. I would go back in and sell the market on the coming week if price goes below 1772.

The MACD stays negative and is crossing down below its zero signal line. If it stays below there for a longer time, it would confirm that the FKLI market has gone into a new bear cycle. The Stochastic remains negative and continues to fall. The DMI is also negative with the ADX stops falling and turned flat. The ADX may be signalling the beginning of a new cycle. But since it is still at a lowly level, I still not able to call it a new trend yet.

 

The weekly chart begins to show more weaknesses as price has now closed below the middle band which is the de facto 20 periods moving average. The MACD remains positive but it has begun to turn downward. Since the MACD is still below the zero signal line, any negative crossing would bring a more severe selling. The Stochastic stays positive but it is also begin to get weaker. We may see both indicators turn negative by the coming week. The DMI stays negative with the D- rose above the 30's. This reflects last week's sellers power. The D+ has been falling and it has reached 20's. This means the buyers are leaving fast. Since the ADX is still flat and lowly, I would pay attention to the Stochastic. If it turns negative by the coming week, it would mean a new sell signal. The other item to watch out will be the bottom band support, if price closes below there, it would really mean the return of the big bad bear.

As mentioned here last week, the new bearish divergence has already completed, and this is among the many bigger negative divergences. So that would mean the selling, if materialize, would be a very very serious slam down. Government officers may claim that the market does not reflect the "real situation", but as any experienced market traders can tell you:- the market ALWAYS reflect the real situation. It is people who choose to deceive themselves.