Straits Times Index back in loss for 2016
This might be premature since it is just mid-day. The day’s session hasn’t closed yet and neither is this the index’s close for the week but here it is, the Straits Times Index is now back below 2889.23 which is the opening level of the year on the first trading session 04 January. At 1.02pm, STI printed 2877.65, down 22.63 points or 0.78%.
The level is a resistance but more importantly it is a statement of market sentiment. Bulls will be astonished while bears congratulate themselves.
“Has stock market bottomed?” seen through different time frames
I encountered many individuals asking if the stock market has bottomed. That rally from February-low certainly looks good through short term indicators. Whoever rode that rally should pat themselves on the back. Long term investors should take a step backwards to the larger picture and ask:
- Does a 2-month rally make a trend?
- Where is the market placed at the moment in terms of a 6-8-year stock cycle?
Straits Times Index monthly chart 1988 – present
On a long time frame, that 2-month move is peanuts. The big prize is getting the big direction, target right.
Observations from this weekly chart
In the mean time, some observations for traders/investors to consider.
Straits Times Index weekly chart 2011 – present
- 2015 performance terminated previous 2012-2014 bull run.
- STI now back into red.
- Overhead resistance from prominent 2013-2014 low.
- Moving averages print dead-cross last year and indicates current move is retracement only.
- At best index is printing lower high.
- No prominent bullish reversal/expansion pattern.
- Despite the gains from Feb rally, STI has not beaten top of ‘B’ phase described here, therefore still in ‘C’ phase.
The following two tabs change content below.
Soh Tiong Hum is Director of TerraSeeds Market Technician Pte Ltd. TerraSeeds is a trading educator in Singapore since 2005.
Soh's Twitter account @sohtionghum
was ranked #23 out of The Top 70 Twitter Accounts To Follow In 2015
"I do not have a financial advisor's license. I am not qualified by any regulator to give financial advice. I do not know you the reader. Your investment means and motive may be different from me. My posts here are based on observations and meant for education. I am not responsible for for any consequence from your actions."