Sorry for no posts

Announcements
Sorry for not posting in the past 2 weeks. The market has been uninteresting.

Insights and Opinion
In my last post, I mentioned a reversal in both the STI and HSI. It happened but it only lasted for 2 days. The markets have since been down.

STI
The STI has fell in line with the rest of the markets in the first week of August. Fed and Euro rates being held, helped the market to sustain its low levels and not go lower. The past 2 trading sessions have seen strong gains in the DOW but none here. The Prime Minister warns of trying times and a lower GDP estimate. GDP grown rates in Singapore have slightly contracted in Q2 and have aggravated the bleak situation. This has been a case of fundamentals overwhelming technicals. Technically, the short term outlook is good with an expected climb to a the band of 3000 +/- 50. If the DOW and Nikkei post strong gains in the next few trading sessions, it may overwhelm the negative sentiments here and bring the market up a little before more worries set in. That can be an opportunity to exist open positions.

HSI
The recent storm has caused the Hang Seng to close for a day and has not helped the situation as the HSI seems to be tracking the STI in the last 2 trading sessions. I would expect the HSI be a a reactive market in the next few trading sessions.

Nikkei and DOW
The Nikkei has been tracking Wall Street. This makes it relatively easier to chart than the STI and HSI. However, the strong gains of both markets in the last few trading sessions shall reverse on profit-taking as the markets climb towards their short term resistance range.

More substantial views with new charts shall be posted in the coming days. Watch this space ;)

Interim update of the week

Good day, good people!

A little intro, this post to kick start the action and bring a little life at this clean and green site.
Now let's have our market action updates.

Market Action
After 3 trading days as I last wrote about the retracement matter, we see that markets have plunged tremendously, exceeding our expectations of lows. This is partially because the turning points were a little lower than expected. Nonetheless, the expected has happened. We shall now brace for what is to come.

As this is being reported, the STI is at a low of 2886.56, the HSI at 22285.00 and Nikkei at 13159.45 All 3 major Asian indices have fallen considerably since Thursday. On the other hand, Wall street is rebounding from its low.

Insights and Opinion
Moving forward, we have our visual illustrations and opinions on where things are heading.



Starting with the STI, here we see a familiar candlestick. Not that this candlestick is a very special one and that its presence signifies a reversal about to happen, this candlestick after a gap down shows that a reversal is likely to happen. Throughout Tuesday, the market opened much lower and crept up slowly and quite surely, implying short term strength. This
together with our familiar candle is good sign.



On to the HSI. The latest candle is obviously a hammer. Although it is a black one, its presence in a strong bear market is a reversal sign.

Wrapping up, these signs are in line with previous estimates of retracement of the markets and projected short term up trend.

Say tuned for the next update coming soon, within the week, when we confirm this short term up trend and analyse the coming downturn.

Turning Point?

Market Action
Both the STI and HSI shed a bit of yesterday's gains (0.04% and 0.20% respectively) despite Wall Streets gains. The Nikkei is up 2.18% to 13603.31. The Singapore market was supported by gains in the banks, SGX as well as Citydev while other counters closed under the water.

Insights and Opinion
Following yesterday's Ichimoku charts, we have 2 charts on near term support and resistance.


This first chart shows the STI candlesticks. The top and bottom horizontal dotted lines are the near term support and resistance lines while the middle dotted line cuts the level at which a slight reversal is possible. The proportion here exhibits what can be believed to be, sacred geometry. In this case, it is just 1:2, where 1 and 2 are Fibonacci numbers. As the market is currently exhibiting a range phenonmenon, I have assumed the possible length of time this cycle will last.


This second chart shows the HSI candlesticks. The lines drawn here have the same meaning. Notice that the patterns for the HSI are similar to that of the STI. Considering the current macroeconomic climate, it is safe to assume that coupling of the markets shall persist for now.

The circled parts in both graphs give me a basis to believe that a short turning point will occur.

Once again, click on the charts to have them enlarged.

一目均衡表

Announcements
The inconsistent posting is regretted. Be sure to check this space every week. I will update it once a week from now on. No point updating everyday as I am not a reporter.

Market Action
Notice I dropped the "Today". I suppose it is more useful to share a boarder view.

The market seems bullish in the short term. However, near term correction is highly possible. Regional markets like the Nikkei and Hang Seng have had strong gains since last week. As of today, the STI gained 88.32 points to finish at 2978.32. In the region, the HSI gained a whooping 607.07 points to reach 23134.55 and the Nikkei also climbed 127.97 points to 13312.93.

Insights and Opinion
I have had comments that my insights needed to be a bit more "insightful". As I endeavour to upgrade the content on this site, here is the first invention to roll out. Introducing, Mao's Ichimoku.

The 一目均衡表 (Ichimoku Kinko Hyo) was invented in 1935 by a Japanese writer named 細田悟一氏. It is technical indicator used in technical analysis. Its full definition can be found at Investopedia.

For the purpose of my research, I have customised the Ichimoku for my analysis. I have attached 2 diagrams below to illustrate my findings using Mao's Ichimoku. The customised Ichimoku here has had its variables changed even though the lines are used for the same purpose. Mao's Ichimoku is used best to gauge quarterly (3-month) outlook. Click on the pictures to enlarge them.



Here we have the STI Candlestick chart with Mao's Ichimoku overlay. The Blue line is the Tenkan Sen, Red line is the Kijun Sen. These work like moving averages over a period of 8 and 21 days respectively. The Baby Blue line and Pink line are the Senkou Span A and Span B respectively. The area between the lines are the Ichimoku cloud which is a gauge for support and resistance.

From this chart, the STI is likely to retrace when it reaches 3030 to about 2940 levels. The retracement process will take 2 to 3 trading days. After this, it is likely to go all the way to a resistance at 3150. 3150 is the part just above the cloud. Due to the current state of the economic fundamentals, it is not likely to see the market break very much above the cloud. Technically speaking from the trend in the chart, it is unlikely that it will not reach for the resistance level in the short term.



Now for the HSI. The HSI is likely to retrace when it reaches 23300 to about 22400 levels. The retracement process is likely to happen within the next 2 trading days and will take 2 to 3 trading days to complete. After this, it is likely to go all the way to a resistance at 24500. Again, 24500 is the part just above the cloud. Economic fundamentals and technical indicators that apply to the STI are applicable here as well.

Hope you enjoyed this post and found the information useful. Feel free to comment :)

Posting resumes

Announcements
Apologies to those who read this page and did not find something new until now. I seem to be short of Thursday, Friday and Monday. The good news is, you have not missed much as TODAY is what matters now.

Today's Market Action
The market fell by 2.53% today, plunging 73.37 points and finishing at 2830.75. This has not happened since March. The market seems to be going down and completing its head and shoulder cycle. Sentiments are weak considering that Put warrants are in the Top Gainers and Top Losers are the index stocks.

Insights and Opinion
My near term estimate of 2900 +/- 50 has been broken. The market seems to be heading for a rebound, considering it is ranging. RSI and stocastics confirm this. However, I will not be too sure about when the rebound will start and when it will complete. In March, the market spent about 2 weeks at a low and took another 2 weeks to climb to 3150 levels. It will not be surprising if this happens again. I would expect to see "smaller scale ranging" phenomenon at current levels of 2850 +/- 50 for the next few days. But. There could be a chance of a longer recovery completing the U-shaped, temporary recovery. The resistance can be set at about 3050 +/- 50. This can be a good chance to long index stocks for a few weeks.

Further, fundamentals are weak considering the coupling of markets in the region with the US where things have not been doing very well. A rebound of equity markets would probably be fueled by a correction in commodity prices as a lot of people are expecting. Market movements are, a self-fulfilling prophesy.

Short Memory, Quick Reaction

Today's Market Action
In the news today, various sources have voiced out opinions that eased yesterday's fears and the US market reversed. This has sparked our local market to gain a solid 31.00 points to 2917.62.



From the chart above, the HSI seems to be experiencing more volatility than the STI. The Nikkei which closed a little earlier did not get to experience the rebound. Markets are currently still closely coupled.

Blue-chips ruled the Top Gainers while index Call Warrants rules TOp % Gainers. On the other hand, Put Warrants dominated both the Top Losers and Top % Losers.

Insights and Opinion



Nothing much happening now is changing the short term range outlook. I read an article about the softening of the commodities market today. Hard commodity prices seem set to correct themselves especially for crude oil, which analysts think, will return to its fair value later in the year to surge again early next year. Not much to comment about commodities as I am not an expert, however, the effects of this could be beneficial to the equities market which everyone seems to be underweighting now.

The major indices around the world have been negatively correlated to the price of oil and even gold. If these hard commodities are set to soften in prices later in the year, we can well expect a late year rally in equities. Even though it is hard to say when this will happen, it may be beneficial to collect what people are dumping now, equities. However, we do have to keep in mind that not everything is very cheap even now when the market is not in a strong uptrend. In fact, most counters in the Singapore market are hanging in a "neither expensive nor cheap, no one can tell what is going to happen so don't rush in" state.

Even though the current sentiment is to hold cash, I cannot help but think that cash in my bank account is depreciating at a rate of about 6% this year. When interest rates are low, fixed income instruments are not attractive. Reasons: 1) At low yields, fixed income instruments are relatively expensive. 2) Liquidity is not optimal (At least for me. As a calculative risk taker, you can see where my interests lie).

Reversal

Today's Market Action
New worries in the US on Freddie Mac and Fannie Mae have caused the US market to reverse from previous gains. The same goes here when the market action from the US is continued in this part of the world. The STI shed a solid 47.50, losing all it gained yesterday to reach a low of 2886.62. The number looks nice but it is not. Put Warrants dominated the Top Gainers and Top % Gainers. Top Losers were blue-chips and Top % losers were Call Warrants.

Insights and Opinion
Feedback from someone who read this space is that we need more than just commentary. So here is more.

As I have mentioned, yesterday's uptrend was not sustainable. Today's worries have brought the reversal back very soon. Looking at the action in the market, it can be noticed that volatility is well managed with the use of CW and PW. A point I failed to address clearly in the last post was the idea of hedging. Warrants are used to hedge the opposite movement (just in case one is wrong). Although the cost of hedging can eat away profits, this cost is well spent when we think about managing our risk. Think of it as this, "it is easier to make less profits than it is to make large profits". So when we hedge and make less profits, risk is lesser and we make profits easier. If this is scaled up, it can make more, in terms of absolute amount of profits, with lesser risk.

Keeping "hedging" in mind, the activity of PW does not necessarily translate into an expectation of a bear market, it also shows that some are hedging against potential downside by shorting the Put when going long on the underlying. This takes into consideration that some may be doing this while trying to take advantage of lower prices.

Rebound

Announcements:
Posts from now on shall follow a specific format. This shall give readers a better and more systematic view of daily insights. And YES! Daily posting shall resume since there is something new in the market everyday.

Today's Market Action:
The local market surged 41.58 points today to close at 2934.12. CityDev led the Top Gainers, up $0.400 or 3.7% together with other index weights. Call Warrants (CW) dominated the Top % Gainers. Gold 10US$ led the Top Losers falling $1.52 or 1.6%. Standing with it are Put Warrants (PW). Top % Losers include blue-chip Calls and index Puts. The STI seems to have moved closely in tandem with the HSI and the N225 for today.



My Insights and Opinions:
The market has kept within my estimated band of 2900 +/- 50, hitting a low of 2862.27 on the 3rd of July. The current uptrend seems strong but a little too strong to be sustainable in the short term. Relative Strength Index (RSI)* from the 3-month chart shows that the market is moving into "range" territory between 40% to 60%. That can be a good sign in times of economic weakness. A future breakout may indicate a start of a recovery.



CW in the Gainers with PW in the Losers are a clear sign of a very short term uptrend. However, due to the implied volatility that CW and PW are subjected to, this clearly shows the volatility and corresponding uncertainty of the current market.

Considering the above points, my view on seizing opportunities still hold for a longer term outlook. However, current prices are unattractive in the short term.


*RSI = 100 - 100/(1 + RS) where, RS = Average of x days' up closes / Average of x days' down closes

Round Bottom Phenomenon?

After 6 "black candle" sessions, there is finally a white candle. Well, when there is a low, a little perk is what we can expect. The market closed on Friday at 2892.54, up 12.09 points from Thursday in a relatively weak upswing. Just when you think it is headed for doom, it crawls back after 330pm.

Right now, I would turn my sight on the US markets. The Singapore market is still reacting to how the US market has moved the night before.

The key word now is INFLATION. Such a simple concept that we often take for granted when all is fine and dandy. Here, I would like to take the opportunity of introducing Mosaic Theory. Mosaic Theory is an idea that people can piece together a picture of what is happening by putting together bits of random, seemingly unrelated information. By putting various sources of information together, here is my opinion of what is happening:

Commodity prices are obviously rising and this has not only driven inflation but also interest in the commodity market. Speculation can be expected to drive prices much higher if no intervention takes place for the short term. The root of all evil now is Oil. Oil is a necessity not only for energy purposes but also for transportation and cooking and it is what we eat too. If oil prices continue to skyrocket, which it probably will in the short term, there is no end to this inflation. Sounds like a non statement? Well, the thing is, I believe there is a price we are all willing to pay for oil and there is a conviction to increase production somehow and also a conviction of commercialising alternative sources of energy. Keeping this in mind, the high oil price will only make more expensive sources of energy more viable and put a stop to this frenzy soon.

That is easier said than done but the point is, the markets are not about to recover that quickly. This further supports my inclination to believe those that talk about a long recovery.

Good news for all. This also means that people have a longer time to seize opportunities when they come. We are all trying to spot a bottom but we don't have to. We just need the guts to tell ourselves to take the plunge in a bad market whether it is early or late and profit in a longer run.

Once again, this is an opinion. Readers, please feel free to challenge or question it. There have been no comments so far but it is welcome to spark a more lively platform.

Lost of Direction

The market seems to have been a little lost today. It opened a little higher and surged about 14 points upwards before crashing about 35 points under the 2900 mark and then recovering to close 0.56 points lower than yesterday at 2906.23. A roller coaster ride indeed.

Even though today's action showed a glimpse of hope between 4pm to 5pm, the downward trend persisted after 5pm. I would expect tomorrow to be a bleak day. Wall Street continues to be weak today as this post is written. Technically speaking, all is not good.

Despite the gloomy days ahead, I would like to keep an optimistic outlook in suggesting that people look out for valuable buys. A point to note is that markets crash faster than they recover. This would mean that bad times are less than good times. Some might wish to go for speculative very short term trades. However, I am not in a good position to comment as a speculator and to advocate that. I am an analyst who looks more at the numbers, not a speculator.

Good news for readers as I am now developing a set of customised indicators that I can soon post a snapshot of and give all readers a picture of what I am writing about. Finally, pictures and explanations! Please do join my poll to give me feedback. I shall be constantly improving this site and providing better insights. Readers can expect posts to pick up in this volatile season however, the standard will still be kept to at least 1 post per week.

The Plunge

The market plunged lower today. The near term looks more bleak than expected. The market has reached 2906.79, down 40.75 in a single day. Although this 1.38% loss cannot be compared to the more than 2% losses 3 months ago, it is rather significant in bringing the market closer to its March levels.

Counters-wise, the 4 winning components of the market were out-numbered by the 26 losers. It is interesting to note that SembMar is now more expensive than Sembcorp. I would expect the price of the parent to be at least a bit higher. SingTel fell to 3.57, the tip of its previous bottom leg in the past month. Looking at the big black candle today and the dark cloud yesterday, SingTel can be expected to fall lower, bringing the index with it. The Banks, interestingly, are just starting to go "bear" from their RSI falling out of the 40% - 60% range.

My near term revision of "the bottom" is at 2900 +/- 50 now, shifting only 50 points downwards. The rationale here is that Wall Street indices are showing signs of a rounding bottom in the near term. The chances of yet another significant plunge is not likely in the near term unless oil prices continue to surprise us as they did last week. Regional indices like the HSI and Nikkei as carefully coupled as well. On the part of the counters here, most index counters have hit their lows. Further downside is possible but may not be very significant. This shall play a part in supporting the index numbers.

Buy period can be soon. I shall be carefully monitoring the situation and providing my reports. Keep watch daily these few days to get up-to-date highlights.

A weekly update indeed

As I mentioned, there shall be weekly updates on this site. There will be. Thank you, the readers.

The Singapore market has seen a little intra-day spike today, in line with the Dow and Hang Seng. The Nikkei seems like it is beginning to decouple however, there is no clear indication of that in the near term.

Blue chips that I have been watching on the local market have dipped significantly with counters like Kep Corp now under $11 and F&N in the $4.50 range. Popular Yangzijiang shipbuilder has fallen approximately 10% in the past few weeks.

The Fed's "hold" stance on Fed funds rate has caused a short live exuberance to the market until the realisation that required rate of return shall remain low or the time being. This has made equities less attractive in this inflationary environment.

Back to the market, today's little "tombstone" candlestick could well spell the death of optimism that started just yesterday. The near term can be expected to be down. However, considering the Singapore market's coupling with the US and regional markets, I would not consider revising my target of 2950 +/- 50. The DOW has reached it's March levels. Market sentiment there is negative but March's recession fears have been softened. Significantly further downside is unlikely. Japan has been doing better than Hong Kong and Singapore, a slight divergence has been noticed in the past month. Hong Kong has been moving very closely in line with the Singapore market which can be observed to be taking cues from the US.

I am currently watching for a bottom, buying spree.

Good news and Bad news

Good news for all who read this blog. I shall be maintaining my posts to at least 1 per week to provide readers with a weekly digest. More details later. Watch this space!

Bad news, the market does not seem to be doing well now, even though there was an early rally this week. It finished 47.43 points lower to 2992.66 falling into my target range of 2950 +/- 50. The RSI on the STI indicates possible bear market to follow. I am considering revising my target range downwards.

On the other hand, current sentiments, as seen from 5-day candle sticks indicate that there are sentiments keeping the market afloat in the very short term. This may cause the market to range in the short term when the bulls keep fighting the bears. Right now, the market is also in a sort of "wait-and-see" mode. This may further affirm the range phenomenon.

A strategy one can adopt now is to follow the "wait-and-see" mode. Afterall, we all hope to ride on a wave. Now, we can all wait for better weather before we set sail. However, those with a longer horizon and are not sensitive to short term fluctuations may want to take advantage of the low prices on certain counters.

Trying times ahead

Our market opened 1.8% lower this morning and closed 0.9% down at 3020.15. The candle however, was a big white candle. Based on these two points, the market seems to be sparingly optimistic to a certain extent.

The very short term outlook however, is relatively bleak. With inflation hitting markets all over the world, sentiments on business for the rest of the year is gloomy. On the other hand, recession fears are not as strong as in March, from the fact that a slowing economy is not a contracting one.

With Fed rates expected to rise, the expectation on the market for return will rise in tandem. This will raise the bar on equities to cause rating downgrades in certain cases. My current outlook on the effects of this will be a slow recovery from the current dip which has yet to find its bottom.

Considering all the above factors, we can expect the next support of the STI to be lowered to about 2950 +/- 50. My reason for this is that with recession fears lifted while inflation fears persist, market value will fall close to March levels but not to March levels or below. Price inflation means that the PV of stocks, as compared to before, should be higher to reflect their old value. That can keep the market afloat at least in the near term.

As long as the hope of a late year rally still remains, there is no reason to fear a collapse. In fact, those who believe in it are likely to buy-and-hold in such a time and fulfill the prophesy.

Back in action

It has been about a month since I posted an entry.

The market has taken a turn and shed about 100 points in the past 2 days. Even though the outlook does not seem bright, in my opinion the support shall remain firm at 3000 +/- 50. Despite the coupling with tumbling Asian markets, there is no reason for the market here to fall far below this support considering the stabilising Dollar and rising US interest rates for the moment.

The short term outlook is that the market shall continue to range and the possibility of a late year rally still lingers. In such a time, it can be a wise strategy to go for yield or total return. Capital gain is difficult for the average retail investor who has limited resources to respond to short fluctuations. In a time like this, cheap buys can be picked up for late growth companies and mature companies. These picks offer stability and assurance in such times as well as decent dividends. A cheap buy can mean a decent capital gain on top of dividends.

Another way to reduce uncertainty is to go for index weights or buy into structured index linked products. However, this is only for those who have a longer time horizon in mind.

Think risk and return.
With US Fed rates about 4% and equity risk premium of 7% on average in the Singapore market, a decent return can be expected for now.

?Good time to buy

Today seemed like a good time to buy, certain big counters were down. It could be merely an issue of tracking but the dividend payout this time of the year could be another reason.

What is left is just to keep watching to check if this judgment is right.

Steady Up?

I had a sudden argue to comment about this. The market seems to have been rising steadily in the past 2 trading days. This is to be taken note of. If such a phenomenon persists for a good length of time, it can be time to trade an upswing. But beware of going in too late cos profits may have been diminished.

Notice

No market wrap today.

I think it is more valuable for me to do good insights once in a while rather than churning out posts everyday just for the sake of it. It makes me no different from a newspaper reporter, which I am not and do not wish to be at least for now and for the purpose of posting here.

So until there is some adverse change happening, I shall keep my posts to be a weekly wrap every weekend.

Look out for that! ;)

100 points off for the week

The STI shed 9.85 points today to finish at 3162.03. All in all, the market has lost 100 points in this week's trading. A bit more than the flat week predicted by analysts in the news.

Heavy weight SingTel fell almost 20 cents this week while SGX almost 80 cents! For the banks which declared their Q1 earnings this week, DBS lost more than 40 cents, UOB almost 80 cents and OCBC lost about only 20 cents. OCBC seems to have been spared a larger drop due to its price and also its release of strong Q1 profit margins.

As usual these few days, my outlook remains bear. I have been contemplating on whether to release my opinions weekly instead of daily, so as to add more value. Day to day fluctuations have not been fantastic recently and it seems to have become a bit less interesting.

Down Down

The market plunged 57.07 points today finishing at 3171.88. The morning session was bad as the market fell more than 75 points before lunchtime. After lunch, market action picked up a little to range until the finish. After 5pm trading was relatively flat as well.

There seems to be no glimpse of a good upside for now. Friday may be a white candle day but in my opinion, this is unlikely. The market tends to be conservative on Fridays. Current short term outlook is bear. No change until the target resistance of 3000 +/- 50 or until any good news changes current sentiments completely.

Down from here?

The market dropped 19.80 points to close at 3228.95. So far, it has kept well to my 3250 +/- 50 resistance estimates. However, I do not rule out the possibility that my estimates can be wrong. We all would wish for a better market.

Today's downturn may mark the start of a downswing keeping the market in range behaviour. This provides it does not break its support, my opinion is that this should be at 3000 +/- 50. This shall signal a range market that might well be the start of a new cycle like I mentioned before. If it does break the support, the next support would be somewhere around 2800 +/- 50 where it was before. Simple estimates based on the charts and using some Fibonacci retracements and projections.

For now, I would continue to monitor the charts for buy signals and opportunity. In this high inflationary environment, investing in business trusts can be a good option as these hold real assets like ships, buildings and infrastructure. I would think of looking for opportunities in these areas.

Overbought?

The market closed 0.71 points up at 3248.75. Yup prices have remained high. Analysts are saying that the market is overbought. Considering the rise in prices of the weights, the "heavier" weights have not advanced as much as the "lighter" ones.

If the market is going to remain bullish. Today's steady trend will signal the start of a new cycle. Otherwise, the market has peaked for now. One can be weary of a breakout at such a stage as there is a good chance that the breakout will signal a turnaround.

The thing I would watch now are the candlesticks. Yesterday looked like a shooting star while today seems like a doji. The market has kind of lost its sense of direction now. I would continue watching before taking any further action.

Matching Expectations

Yes! The market closed at 3248.04 today, up 11.94 points matching my earlier expectations. The STI has been tracking the US markets (DOW especially) and can be expected to continue tracking it.

The dominance of this coupling trends suggests that the worse is not yet over and there might be more bad news coming. That and also the fact that traders are very very careful now and watching and following one another's foot steps. According to a forum which I attended last week, "bankers need time to forget" said the presenter. I totally agree looking at what is happening now. Last year's problems need to be forgotten.

Looking on the bright side, business outlook is still good for the next 6 months as the market remains relatively optimistic and vibrant for now.

On trading and prices of stock. Counters here are showing signs of hitting resistance bands and trading sideways at a relatively high range. This can mean 2 things.

1) Prices are high. Counters are overweight. It is a sell time and not time to put your money in.
2) The hovering prices can mean the beginning of new cycles. This means that the current prices are good for a buy.

Looking at current trading patterns showing that prices are resonating, I would think that "1" is probably the case for now, considering that there is no real sign of a boom period coming very soon. Time will tell but I will still be weary of a breakout as it may not necessary be a positive sign.

Unexpected High

A late post again due to a busy weekend.

Friday was a good day for the market as it rose 88.31 points to a 4-month high to close at 3236.10. This, after it shot up more than 60 points at the beginning of the day.

Alas, I was not able to watch the numbers throughout the day due to heavy work commitment. Double bummer for not being able to comment on trading for the day.

The movements on Friday were a bit unexpected but it seemed to have tracked Wall Street gains. The DOW has not been up above the 13000 since it fell from the spot at the beginning of the 2008. Reports have attributed this rise to be a spark of optimism from the 0.1% fall in unemployment rate, Fed rate cuts and a strengthening greenback . This suggests that the US economy is either turning from a bottom or stagnating and, not tumbling into doom and depression.

Since economists do not expect decoupling of markets to occur anytime soon, I guess we should hold the same expectation. The US market showed moderate gains on Friday after a surge on Thursday. Considering the tracking phenomenon, the STI may show moderate gains on Monday as a result. My current estimate of resistance band holds at 3250 +/- 50.

Falling

The market fell 24.57 points to finish at 3147.79 today. Intra-day charts show that it fell sharply after 5pm. After 5pm, SingTel lost a good 5 cents bringing index south due to its high market capitalisation.

The outlook of the local market seems to be bleak for now based on current sentiments and the loss in capitalisation of other weights like Capitaland, Wilmar, F&N and UOB today. The 3-month chart shows a chance of a near-term support at around 3000, consistent with previous estimates. Speculating a longer horizon of 2 months, there is a chance of range market behaviour.

Tipping Over

I was hoping I was wrong. The market tipped over today finishing 29.27 points lower at 3172.36. Selling was strong. The previous assumption of short selling last Thursday did not hold true.

Yesterday, I mentioned that "the magnitude of the change can well upset the direction of this temporary bull". I hold this view. However, today's fall is what I will call, "in the 'OK' range". This approximately 1% loss probably will not turn the good sentiments around so soon and cause a steep ride to the bottom. However, the near-term support can be estimated at about 3000 points +/- 50.

Today's action can probably be attributed to profit taking from previous lows especially for those who took stock in march and missed the previous high earlier in the month.

As for a longer term outlook, we should not rule out the possibility that this is the early wave of an uptrend. I would suggest people to bargain hunt in the coming weeks when prices hit a cyclic low and go slightly longer on those purchases. I have the following reasons for this:

1) if it runs bull, you profit (of course!)
2) if the market ranges, you profit (much less but still no loss)
3) if the market continues to downturn (more holding power with a longer horizon)

The right stock pick and take your money far.

New Support?

The market resonated around 3200 today and closed at 3204.51, up 15.31 points. This was supported by gains in the counters like Wilmar, SIA, DBS and OCBC.

This is a good sign. If the market continues to oscillate around this level, 3200 could become its next support in the event of a breakout. As of now, it is safe to estimate that the support remains at 2800 +/- 100 and the resistance at 3200 +/- 100. I would expect my estimation to hold in the short-term given the limited options for liquid investments.

Even though the possibility of a breakout remains, one can expect the market to plunge thereafter. The reason for this is that current sentiments remain bleak and such a high, sparks of selling. In the case of last week's drop, it is yet to be confirmed if sellers were going short on Thursday. My guess would be that no matter what the case, today's high can be expected to spark a selling spree tomorrow and that cause the market to change direction. The magnitude of the change can well upset the direction of this temporary bull.

As mentioned before, we can well be at the second wave of an upswing but what it looks like at the moment, is a top of a range market. The future is now filled with uncertainty and we can only wait to be sure. My take is to start selling before the selling spree to lock-in profits or cut losses in preparation for the next downswing.

A Late Post

This post is late due to personal reasons. I am just too busy and lack of rest to have promptly maintained this site last Friday.

The Singapore market closed up 11.65 points on Friday after its drastic plunge in the morning after the early gap after the opening. An interesting note is that from 5pm to 530pm, the market was on a downward movement.

The US market was in the green on Friday and I can reasonably expect Monday to be green for us. However, considering the current trend, this moderate upside may not be enough to counter the start of a downtrend as can be expected after Thursday. The HSI closed 0.64% lower on Friday and the movements of our market lately has been tracking that.

If Thursday's selling was sparked by shorting more than profit taking, Tuesday may be the start of a new surge towards the upper limit. My outlook stays at 3250 for resistance and 3000 for support in the short term.

Bearish Engulfing Candle

We see a bearish engulfing candle today signifying a likely peak to the recent upswing. The market hit a high of 3235.24 in the morning and tumbled all the way back to 3177.55 at its close. The 3180 mark seems to be a temporary support for now while the momentary peak seems to be close to 3250, as I have predicted.

Looking at the charts today, in particular the after trading hours trend, I would expect the market to continue in a very short-term downward path. As I have mentioned, this is likely to be a second-wave upswing. This upswing is not without perturbations and corrections. The major fall would likely hit close to the 3000 point support in the short term.

Since November 2007, international markets have been closely correlated. Today's phenomenon marked a strong deviation from this close correlation. As one interesting news article suggests "every day, traders start their guessing game". Today it seems, traders here have made their own mind, in either taking profit or going short, sparking a selling frenzy.

The reason why I do not think this bear market is going to persist is because the current trends suggest good upside and in the worse case, a range market. In these cases, buying will come back when the market feels that stocks have become cheaper or when short positions need to be covered. However, in the former case, the upward trend will take a longer time when buyers are more conservative in their increments than they are at liquidating their holdings at whatever gives a good profit.

Camel Back

Market action today was an undulating camel's back. The market soared to a high at 12pm only to continue lower after lunch. This beautiful camel back shape seems to be a rare sight.

Anyway, the market has broken the 3200 mark. Current trends in the 1-year chart seem to imply that there is further uptrend. The lines suggest that the market has entered the second wave in its upswing. Considering such a trend, previous speculations by analysts of a V-shaped or U shaped recovery seem to be possible. If that is the case, we can expect to see about 5 months more of bull market to go. The basis for this is that the market started its decline from October 2007 and this lasted until March 2008. This gave it an approximate 6 months of bear market. Negative serial correlation suggests a general bull market in the 6 months after, March 2008 to September 2008.

Even though the 6 month outlook may look good, care must be taken in stock-picking. Some stocks have been captialising very quickly on the current upswing and hence may reach their peaks prematurely before the general market does.

A general way to judge whether or not a counter falls into the above category, is to look at its bottom support (lowest possible price for the moment) and upper barrier (highest possible price for the moment). Estimates can be done from looking at the past highs and lows. The way to use these values is to use them as limits of the counter movement together with, the price where the counter is now. For example, a counter has a bottom support at $5 and a barrier at $10, if it is $8 now, there is lesser upside than downside (+$2 and -$3). If we vaguely put our judgment accuracy at 50:50, then our expected return will be, E(X) = 0.5(2) + 0.5(-3) = -0.5. This means that you probably may not be able to make a good return considering the risks. You should not buy the stock. When E(X) > 0, the risk you take is justified and you have a better chance of success.

Charts and data

First of all, I would like to state the inconsistency of my sources. Yahoo Finance is a good source of free data however, yesterday's its data was a bit misleading as already stated once before. Yesterday, Yahoo Finance stated that the market opened at 3162.94 with an intra-day range of 3162.94 and 3201.38. The market closed at 3171.09 according to yahoo and this led to my conclusion of a shooting star. However, today's chart shows a big white candle with a long wick and no leg making it less of a shooting star. Apparently, the market opened lower than reported.

That does not change my outlook for the time being, however, it would have changed the predictions of today. Given that yesterday was not a shooting star, today would not be a down. In fact, it is not. Today the trend was up.

Today the market closed in a white candle gaining 16.14 points. It has now reached the level at which it was at its last peak. Considering the onset of a new cycle, I would place the following supports. Low at 3000, High at about 3250. Not a completely bullish estimate.

Shooting star?

The market opened higher this morning and continued trading upwards until 11am. High prices sparked a selling trend that persists throughout the day. The market finally closed at 3171.09, up 46.22 points.

Today's candle stick resembles a shooting star, a short white candle with a long wick and no leg. If today's selling continues, which can well be the case, the market shall continue a downtrend. However, looking at charts 6-months and a year, a new market cycle seems to be starting. Even though the general sentiment is negative, volatile counters are relatively more stable than before and the winning ones are increasing steadily. Some of these counters, I have noticed are index weights and this is a positive signal for the general market.

Considering the possible shooting start today and general fundamentals, I upgrade my near-term support to be at around 3000. Even though the very near-term remains Bear, there is a chance of the market rebounding into a Bull phase of a new market cycle in the next 6 months. Buying at a low would mean, buying at the breakout of the next down swing because the market can be expected be climbing upwards thereafter.

Yet another roller coaster day

The market is ranging, intra-day at least. Today's roller coaster ride seems to show just that. The market opened slightly lower and finished 1.43 points down. There are steep drops and steep climbs throughout the day in 2 complete cycles.

Candlestick wise, today's action could either be a hanging man or a hammer. Here is my basis of this ambiguous analysis:

Hanging man
A look at the 3-month chart shows a peak in a range or bear market. In this case, our hanging man marks the summit and a downswing that comes next.

Hammer
A look at the 6-month and 1-year chart shows a glimpse of the start of a new market cycle. This makes our like black candle with a long leg a hammer to mark a potential upswing next.


Fundamentally, economic news that hovers around have been less pessimistic than a month ago. Considering this shift in economic sentiment. It is likely a new market cycle is starting. Bullish people can start pyramiding on their long positions while the risk adverse ones can start to cash in on their gains and prepare to make new purchases.

Hovering at a high

The market is up! Opening higher and hovering high today, the market lost a bit of steam at the end to close at 3126.30, up by 38.81 points. The markets in Asia and in the US have been linked relatively closely as I have mentioned before. This part of the world takes the cue from the US and how it closed. The US closed 2% higher yesterday which could have fueled buying today.

I would suggest that this phenomenon is not long lived. Looking at the 3-month chart, the top seems to be near. I do not expect to see the market breaking its previous mark of about 3186.

Tactics we can apply now are, selling to lock our gains and buying them back on the correction. This would be similar to shorting on your own holdings. The rule of thumb to make this profitable is to make sure the difference of the sell and buy price in this "pseudo-shorting" is greater than the total cost of this transaction (sum of sell cost and buy cost). This will give you a higher return than holding on to your current holdings for a longer period (if you are expecting a positive return). Also, your risk is cut when you have "locked-in" your earnings on your gains.

On Moving Averages

The market closed 1% higher after a gain of 31.00 points after a higher gain at the beginning of the day. Gainer beat losers 348:260. An analysis of the 3-month chart gives very near-term promise of a short ride upwards if tomorrow ends finishes in a 3rd white knight.

Today's topic is on Moving Averages. These values are obtained by taking the average prices of the past days. A more detailed definition and explanation is given here.

I shall provide the value-add by sharing my knowledge about Moving Averages. When reading charts, some traders chose to use Fibonacci numbers as they represent sacred geometry. Fibonacci numbers that can typically be used are: 5, 8, 13, 21, 34, 55, 84 depending on your investment horizon. Notice that 5 days = 5 trading days and not 5 calendar days. Hence, 5 trading days cover a week.

It is useful to compare a shorter term with a longer term. My choice, from when I learnt this is to use MA8 and MA55. The former in measures slightly more than a calendar week and the other, close to 3 calendar months. The rule-of-thumb here is to BUY at an intersection of MA8 and MA55. However, in my opinion, it matters what direction the lines are heading too. Below is a summary of the characteristics.

	MA8	MA55	BUY?
Direction	Up	Up	Yes
	Down	Up	Yes
	Down	Up	No
	Down	Down	No

The reason for this is that if MA55 is heading down, the general trend tends to be a bit bearish. So in order to cut risk, prudence has to be exercised before a BUY. Conversely, In a bullish market, even though general optimism is there, prudence is also to be exercised to reduce the chance of irrational actions.

Moving Averages is possibly the simplest technique in technical analysis. It is beneficial take them into consideration when investing.

Roller Coaster

The market went through a roller coaster ride today to a higher finish. However, a 13.53-up close was not insignificant in this downtrend.

An article in the Business Times today quoted a near-term support at 2994. I concur to a near-term support around 3000 considering that the market hovered around that region for about 2 weeks last month and is almost within 3000 +/- 50 currently. In a further short term, I still would expect either a lower downtrend or a slow and steady climb from the near-term state if a bear market is to come.

Creeping at a low

The market crept at a low after it gapped lower in the morning. It finished at its lowest in the past 8 sessions at 3042.96. This followed Friday's drop in the US markets.

A 6-month chart of the STI shows a downtrend that would probably find its way down to around 2800 points. No fret here. A range market seems to be highly probable, unless the market breaks its support of around 2750. If the Bear is in, it shall be slamming the market below its support.

Looking on the bright side, buyers can look forward to another buy session coming soon in May. Technically, from a wave principle perspective, this could be the last bump in the Bear trend. There is also a good chance that Leather (or Beef) shall be in vogue thereafter and last for a good few months for us, small fries, to surf on a wave.

In contrast to employment trends, the stock markets are leading economic indicators. Fundamentally in the news, the US expects to pull out from this momentary recession in the second half. This positive sentiment may well bring a ray of hope to the markets to fulfill this self-fulling prophesy.

Trading with Candlesticks

Another day of market info and knowledge sharing!

I have decided to add some fun facts to complement each day's analysis. This is to spice things up. I did like to differentiate myself from the regular columnists in the newspapers.

Before I begin my column on Candlesticks, Friday's market bounced back rather well. The STI closed up 62.27 points to finish at 3126.87 and closing in on what it lost in the past 2 days. This is either a clear sign of a range market or a show of regained strength in a very early part of a new market cycle. We shall continue tracking the performance and sentiments of the market to know for sure. My outlook stands at "Range" in the short-term for now.

Now for Candlesticks.
I have mentioned Candlesticks many times in my daily analysis but have never explained it properly. Candlestick charts are an option for technical analysis of charts. This option can be found in your internet trading account or sites like on Yahoo! Finance.

Now what makes a Candlestick?
A candlestick of each trading day is formed using 4 prices: Open, Close, High and Low. The Open and Close prices make the body of the candle. The gap between opening and closing prices determines the height of the candle. If the day closes higher than it opened, a white candle is formed. A black candle is formed in the opposite situation. The High price determines the point of the top wick and the Low price determines the point of the leg. For example, a counter opens at $2, hits a low of $1, rises to $5 and closes at $4. A white candle of $2 in height is formed, it has a top wick of $1-high and a $1-long leg.

How to use candlesticks?
Candlesticks can be used to judge market sentiment, giving rise to buy signals or sell signals. This is to put it simply. One of the better free resources that I have found is the Candlestick Trading Forum. Here you can find out what candlesticks mean and much more information on candlestick patterns which I shall not repeat here.

I shall be covering other topics regarding technical analysis and simple techniques that are commonly applied to chart reading. Watch this space!

Inflation and you

Inflation. The topic that has everyone talking recently. People are getting more concerned about the value of their money, their assets, their pay and the list goes on. Thursday, the STI closed in a black candle. I have not much to comment on that given that I have no change in my outlook for now. I shall use this entry to discuss a topic which I promised to discuss.

I guess everyone knows what is inflation. Basically, the prices of things go up. Consequently, the money we possess buys us less things.

Inflation is the reason I invest my money. One has to do something to my money in order to maintain its value. A savings account that gives me a 0.25% return annually means that my savings devalues at the rate of (Inflation rate - 0.25)%. This is not good because at a rate of 4%, it will half in 20 years and become a quarter of its current value if I retire 40 years later!

This covers the first 2 concerns listed above and now for the third...

Inflation causes people to panic about their pay. "My earning power is reduced if my pay does not increase more than the inflation rate!" people say. The cruel reality is, that if people maintain the same level of disposable income in a high inflationary environment, prices will continuously be driven upwards. Businesses will find it expensive to produce and supplies do not increase as drastically as demand. This leads us to another cruel reality when it comes to increments. If the proposition above holds true, businesses have no reason to give better increments for 2 reasons: 1) that the inflationary environment will continue and, as a result, drive up operating costs and reduce profits. 2) Profits will be further reduced if human capital costs increase due to increments. There will be no sense in giving staff more than the business can profit. For example, if my profits are 5% before budgeting for increments, there is no reason in giving my staff increments greater than 5% because my business has not been growing that rapidly.

The markets have been uncertain and crawling at a low. The outlook for the coming months is not very bright either. What will you do if you own a business?

2 black crows and counting...

In a time of crisis, capital markets are closely correlated i.e. their betas with respect to one another tends to "1". The markets have been heading south at the same time. The market indicators in my Tiger Dashboard show 5 blue-chips and 5 major indices all in the red for Tuesday and Wednesday. In Asia, markets have been falling with the Hang Seng at the lead, losing 1.35% and the Nikkei close behind with a 1.05% loss on Wednesday.

The STI shed 40.70 points on Wednesday after a good morning of treading above the water. It has been 2 black crows and I expect to see another one coming. The next resistance point to break is 3000 points. Once it starts trading consistently below this mark, I would expect it to remain below for a few months to come.

Unemployment and the market

Today, I shall skip chatting about the 51.50 point loss in the STI by writing on a more interesting topic of employment.

Unemployment rates have increased recently and this tells a good sign. Economists use employment rates as a gauge of market conditions. When the economy is good, there is more work to be done, hence more jobs and a higher level of employment. In a downturn or recession, the opposite happens. Interestingly, as businesses take a little time to respond to market changes, there is a lag between the market and employment. Employment rates can hence be a lagging indicator of economic and market conditions. When unemployment rates show an all time high, i.e. employment is low, this will be a lag from a low in the markets. This implies that market lows are over and we can expect a better outlook. However, the assumption that employment has reached an all time low is questionable.

Globally, we see that hiring has slowed down and that businesses are keeping a tight budget for manpower. We can expect this phenomenon to sustain for the next 12 months as annual business cycles determine such measures.

I shall be covering the topic of "Inflation" in the coming days if the markets show no interesting signs. Today's big black candle does not affect my outlook as it is still within range of the market movements of the past 5 trading days.

Keep on movin'

The market finished up 26.36 points to close at 3181.92 after a relatively gradual climb from its morning low of 3125.70. The bulls seem to have quickly overcome the bears from today's "tick-like" intra-day movement.

A note on current sentiments in the media, today's front page of the Business Times has an article on "A 'V-shaped' Recovery". Analysts are thinking otherwise that this could be a rebound in a bear market. For general information, the charts that represent "V-shaped" recovery and technical rebound differ in the time scale (and hence the gradient of the swing). Currently, it is hard to tell as the phenomenon is just starting.

Another notable point is that "V-shaped" recoveries that recur end up in range markets. Just go to any good chart provider and look at charts in general. You'll see that bull market upswings are less "V" until the later stages. In the later stages when rebounds look "V", the later finish tends to be higher than the previous peak hence, showing the up-trend.

Outlook in the next few days is rather uncertain even though current trends are indicating further upside. By stance on the markets remain.

Those trying to recoup or cut losses in the previous downswing can look forward to an exit point soon. This may sound foolish. However, from a risk management point of view, you did rather take a small loss and cut your risks considerably than a keep your stakes high in an uncertain market. Your expected return for the moment may be greater by doing the former.

White Knights meet a Black Bird

Today's title sounds crude. Well, sensationalism is what makes writing interesting.

The white candles in the past 3 days have been overcome by a black one. No fret. The market looks like it is going to have good upside in the short term. Congratulations to those who bought in the upswing in the previous days to take advantage of the panic or better, at the bottom about a month ago.

The market took a turn today going down in 2 large swings. Sellers overwhelmed the buyers later in the day to cause the lower finish. Heavy weights like the banks have seen good upside in the pass few days. It is no wonder that a "sell spell" is being cast. Today's black bird is probably the result of reluctance to buy in a time of uncertainty. The general outlook remains bleak, with the US likely to declare H1 shrinkage.

Back to longer term charts, the 2-year STI chart shows an interesting twist. The market seems to have began trading in a range phenomenon. Thus, I upgrade my next 2-month outlook from "Bear" to "Range". Closer scrutiny shows a good chance of range market behaviour between 3400points to 2800points. I shall keep to 1 or 2 significant figures as higher precision, to me, makes no sense. How can anyone estimate a peak or bottom to such precision? Market sentiment changes and it is not surprising that even professional analysts change their stance frequently.

Keeping the current range outlook in mind, I foresee more potential upside in the Singapore market. I would expect to trigger my "stop-loss" measures in the coming weeks and wait for the next low to pick up stock. The rationale here is trading ups. Greater risk takers can try short positions on the dip. A very important point to note is, that shorting is much more advanced technique. I suggest we leave it to the pros.

What it should have been

What it should have been...

First, I would like to make a correction on the past 2 entries. The opening values of the 1st and 2nd of April, that I have stated on those days, may not be accurate. Reading the 3-month candlesticks on Yahoo Finance reveals that the candle bodies are longer than I quoted. This is due to the lower opening values. I am puzzled why the "Open" value is quoted as such. Anyway, just to share with everyone to be more careful when reading such open-source statistics.

Another weird thing about Yahoo Finance is its "Index Value" and "Trading Time". These 2 may correspond to each other but they don't correspond to the actual day. Please be careful.

Now for the analysis of today...

The market showed strong gains on Thursday, going up by 46.94 points in a choppy session. Nonetheless, there seems to be promise of the market going higher these few days.

Considering the oversight I made on the opening values earlier, the outlook, in the short run of the next few trading days, is not as bleak as previously expected. However, in the longer run of the next 2 months or so, I am still with the Bears. The basis for this is that, on the fundamental front, more businesses are less confident of meeting their targets this year. This translates into a less favourable market sentiment. Moreover, the likelihood of the US declaring a recession due to 2 consecutive periods of negative growth remains probable. This may further lower expectations.

One can proceed with "stop-loss" measures in the coming days. Trigger them when the roller coaster starts to tip over. However, don't forget to keep watch of your "stop-loss" targets and move them incrementally to maximise gains. Going into cash is safer for the moment despite rising consumer prices.

Long-legged Doji

The market gapped higher in its opening on Tuesday at 3123.35 and closed at 3124.61. The intra-day high was 3130.39 and the low was 3112.39. This made a 1.26 point white stubby candle with a 10.96 point leg and a 5.78 point top wick - a long-legged Doji.

In candlestick analysis, the market has lost its direction. The bulls were winning most of the day countered by short but deadly bear-slams. Kind of like the bear being poked in the bum and turning around to pin the bull down only to have the bull making a comeback and starting all over again.

I have no change in my forecast of an imminent downtrend approaching soon. RSI (Relative Strength Index) shows that the market is possibly going to turn around and either range or go lower, in the mid-term. Fibonacci retracement ratios indicate a similar trend.

So far, 3 techniques of vastly different basis agree with one another. We should get the message.

False Impressions

The market opened a little higher as expected and closed in what is called, a "Hanging Man". Even though it closed higher, climbing all the way up from under 3000 points during lunch-time, the "Hanging Man" is a bad sign especially when it appears after an engulfing dark cloud yesterday. Like a ghostly figure in the air, the "Hanging Man" is a signal that the reversal is near.

The bears are gaining control of the market. We saw it crash at mid-day and fortunately climbing all the way back up from 3pm. This could be due to buy-backs to stablise the market. Even though buy-backs work for large investors of particular counters and company treasuries trying to kept the price afloat, it generally does have a lasting effect on the general market.

Today's, "Hanging Man" was a small stubby white candle with a long bottom wick. Some may think it is a "Hammer" but "Hammers" appear at downswings. In this case, the market was up these few days and so this little candle is a "Hanging Man". The last 2 "Hanging Men" appeared in October 2007 and December 2007. These were around the pinnacles of the the previous peaks. However, due to the fluctuations at the peaks, the market did not crash immediately the day after appearance the "Hanging Men".

On the above basis, it is rather hard to tell what is going to happen tomorrow. There is a likelihood of the market opening up or down and there is likelihood of it closing higher or lower. Regardless of which, the idea is to cash out soon before the big dip. You did rather take a small loss than a bigger one.

Dark Cloud looms... ...

A dark cloud looms after a day a bearish of trading. This dark engulfed Friday's sunny spot too.

This doesn't look good. The technical signs are clear. The bears are grabbing the bulls by their horns and flipping them around. It makes you wonder why you ever loved bears when you were a kid. These big and cuddly creatures can be quite fierce.

This marks the start of the formation of a third peak on the downswing for the STI ever since the first bearish peak formed in December 2007. Considering that fundamentally, the markets in the region and the US are weak, the general trend shall remain negative for now. Further considering the market cycle from a wave principle perspective, the market is likely to dip under 2800 points to its all year low and range for a while after that.

No worries for bargain hunters out there. Bargain hunting season shall come in due time (next 2 months are so). It really depends on how you look at it. One can start a shopping spree when the market hits a low and starts to range for a while, or join the crowd on the onset of a breakout (which is likely to be a good one this time). From a "risk and return" point of view, there is no advantage in going in to early and waiting the range-market out. You'll have to endure the pain of inter-mitten paper loses for the dividends.

For now, the outlook for tomorrow is that the market is likely to open a little higher. This phenomenon has happened 4 times in the last 6 months. Twice it closed higher, twice it closed lower. This time however, my take would be that it will close lower. The basis of this is that, in a bearish market, there has already been 5 nice white candles and a doji in the last 6 trading days before this.

This ends today's insight. Watch out for a face lift to this website very soon.

Bearish Reversal?

The market closed 6.70 points in the green. A plunge from its midday rally of 30.53 points higher after its 17.00 points lower opening. Today's candle is a white candle with the top wick as long as its white portion. This is the reverse of Thursday's white candle which was one with a bottom wick but no top wick.

Considering current market sentiments, this could be the start of a reversal. Parties who have bought at the previous low will take the opportunity to sell. This shall further be fueled by the those who are inclined to take short positions.

I would expect the STI to reverse downwards next week. Even though some stocks remain value buys, the pessimistic market sentiments can be expected to overwhelm the purchasing. Risk-takers can start to take short positions while value investors should continue waiting for a better buy. Adventurous parties can seek for stocks with a negative beta to ride a possible upswing but these cases are rare in our marketplace.

1.00% Higher!

The STI closed 1.00% higher on Thursday, climbing continuously since 1530hrs. From my previous post, I did not expect this to happen. The index has broken my (and also other analysts) previous estimates that the highest rally will peak at about 3000 points. That assumed peak happened on Tuesday.

One of the reasons for today's rally could be due to the buying for trades that were short. The market opened lower today. Fuelled with the need to settle the short position (which started on Tuesday), traders were inclined to buy when the opportunity presented itself.

Looking at the Dow today as I am writing this (just like Tuesday), I would consider tomorrow to be a good day with the Singapore market opening a little above today's closing. There could be a chance of the STI hitting a high of 3100 in the new few trading days. If anyone has bought anything in the last downturn or wishes to short the market. SELL signals should come in due time.

Prophesy fulfilled?

The STI closed just 4.97 points today after opening lower by 13 points. This fulfills my expectations of it, for now. It has been a rather boring day considering the narrow variance and intra-day fluctuation.

The market dipped and rallied higher after trading hours fueling my expectation of it opening at about the same point as it closed tomorrow morning. I expect that tomorrow will be another small black candle. I hold my stance on the current situation as I did yesterday.

In order to make this website more interesting and informative, I shall soon extend my market watch to cover industries and even specific counters. Capabilities will be added gradually as I have more time and resources.

Another bright day?

The STI opened about 33 points higher on Tuesday and closed at what may seem to be a breakout at 3000.19. The last known candle stick from good sources indicate a white stub with a longer top wick than bottom wick. Considering the last few candles, the market was starting to down turn at the end of the day. This is true from sources with after-trading data. The aggregate candle for the day is a white candle with a stubby bottom wick and a top wick of about 23 points. Could this be the last bright day for now?

I have the privilege of looking at the DOW while writing this. I am a little late today due to personal commitments. The DOW opened lower today. Currently, the day looks like it is going to end in a hammer. This suggests that there may be further upside in the US markets, which is good news for us in Singapore when the market sentiments seem to follow the US rather closely especially now. However, the "hammer" today is a black one with a considerable top wick. Caution has to be taken when assuming that this is a positive signal.

My take is that STI may open lower at 9am later (Singapore Time) and close not far below 3000 points. The basis for this lies in the closing trend and the fact that the hammer on the DOW is black and not a clear one. The chances of breaking the 3000 point barrier, substantially upwards, is low for now. I hold my view that the coming 3 months is in general "bear". BUY signals or market bottoms can be expected become clearer in the later half of April.

Strong gains - a Sign of Relief?

The STI gained a good 102.88 points today after gapping up by 52 points at the start of the day and having an additional boost after 5pm. Could this be a sign of relief for the Singapore market in what is perceived as gloomy days ahead?

STI chart for the last 2 years looks like a classic Elliot wave - 3 distinct upswings between June 2006 and November 2007 and down swings after. Considering the "bear" sentiment from end of 2007, the wave can be expected to reverse direction in a series of downswings, which is what is happening now. From November 2007 to February 2008, the STI charts show 2 distinct "humps" on the downswings and a little "bump" between February and now. These can be considered corrections to the "bear market". The "humps" are clear corrects but what the "bump" suggests has yet to be confirmed. While generally pessimistic news looms around the stock markets for the moment, it is unlikely that todays gains signify a turning point. On the other hand, todays gains may in the longer term future become a part of the third "hump", which signifies a ride to the bottom.

At this point, I would like to point out that this website seeks to provide day-to-day analysis of the Singapore market and insights for the common people, you and me who have no foothold on the inside but make do with as much information and knowledge we can obtain. Every evening, I shall share my analysis of the day and anticipations for the next day.

Now for the anticipations for the next day...

Intra-day candle sticks today show that the market is relatively upbeat for the moment considering the large white candles that scatter throughout the day. The last candle stick was a white stub. In total, today's movement has resulted in a large white candle with no wick on either side. Looking at the candlesticks for the last 3 months, what we can expect tomorrow to be a little stub for the day and a series of dark days to come. Further, considering the candles of past 3 months, the top of the short upswing should be between 2900 to 3000 points. Today's 2927.79 is already within range.

Verdict:
BUY or SELL, you decide (it really depends on what you BUY or SELL). For value investors, you may wish to wait a bit longer before you decide to pick up something.

1st post

Decided to create this website today.

The purpose of this website is to consolidate daily "kopitiam" and "pasat" talk among my friends and myself on the stock market and share it with fellow investors and speculators alike. These entries are intended to be free with the motive of sharing ideas and knowledge about the markets. This website is dedicated to friends who have limited information and resources when investing.

Here at "Lau Pa Sat" I intent to create a platform where readers can share their opinions after reading my daily entries. I have dedicated myself to watching the markets everyday. Opinions are my own.

I shall gradually upgrade the features of this website to provide a one-stop-shop for like-minded investors and interested parties.

*Disclaimer: The opinions on this website are the author's own and DO NOT constitute as investment advice. Caveat emptor. Actions based on opinions given in this website will not necessarily result in gains. Please practice due diligence before making any investment action. The author takes no responsibility of the outcome of the reader's decisions.