Is the Straits Times Index ready to do a correction yet?

“We are way due for correction!”

During the Shares Investment Conference on 05 October 2013, experts predicted that the Singapore stock market is due for a correction in 2014. Is the stock market correction of 2014 here finally following today’s price action?

Cover of Shares Investment Magazine Issue 470

Cover of Shares Investment Magazine Issue 470


1-2-3-test-and-resistance price action

At the close of trading today, the Straits Times Index closed lower verifying once again the formidable overhead resistance. Read the back story here and here.

STI ready to fall

STI 1-2-3-test-and-resist price action


What happened to the STI after the conference?

As if on cue from those experts, the Straits Times Index started 2014 with a ‘bang’ moving downwards swiftly from a high of 3169.2 on the first trading session of the year to a low of 2953.01 on 04 February 2014 (see orange box in chart). Timing was impressive but the less than 10% correction was closer to a whimper. If we moved backwards to the high of 2013 at 3464.79, then the market corrected almost 15% by the time it reached low early this year (pink box).

Straits Times Index chart mid-2012 - present

Shares Investment Conference was held on Saturday 05 October 2013 (red star)


Is the big one here yet?

Very hard to say. The term ‘correction’ has traditionally been attached to market falls between 10 to 20 percent. We don’t know if the one experts were referring to are already over. Or may be one BIG one is coming soon.

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