After a high volatile week, the STI started the week with weak sentiments. The market retraced after hitting the 20d MA and 2 black candle was formed yesterday and today. The world is now waiting for the result of the hearing of US bail out plan.
If congress give a green light to go ahead on the plan, I believe there will be a boost to the worldwide stock market. If the congress hold back a bit, I am the stock market can possibly resume its down trend.
While waiting for the US hearing, let’s take a look at the Singapore Straits Time Index and stock market trends!
Singapore Straits Time Index (STI) Immediate Support at 2,307
Based solely on technical analysis now, I am seeing a lower low in formation after hitting the 20d MA resistance. There is a high possibility that the S’pore market is resuming its down trend. The immedate support I am seeing will be 2,307 which was the low created last week.
The next support level would be the 61% Fibonacci support level near 2,238. This is an important level to watch because breaking this crucial fibonacci support suggests that the market can dive down to the 100% which was the low found in 2003. That would be a scary event to happen.
Anyway, the US is still planning on the bail out plan now. Look like that will definitely give the market a boost short term if a green light is given from the Congress. However, the depth of the financial crisis is really a big unknown and there are lots of uncertainties ahead of us.
Personally, I do not that the bail out plan will end out down trending bear market. Such a big crisis cannot be possibly cured in just a few days. We need time to prove the prescription is really effective to turn the economic around. In view of this, I believe there is a high possibility that market would resume its down trend again.
So, trade with care! I am continuing to monitor the few Singapore stock counters that are near the resistance yesterday and I am waiting for a trigger signal to short, if possible!
Singapore Straits Time index hitting 20d MA resistance
DISCLAIMER: This information is used for learning purposes only. It does not constitute an offer or solicitation to buy or sell. You should do your own analysis on top of my postings.
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