Stocks and indices quarterly update end Q2 2017

Stock indices have beaten off most bearish signals/overcome resistance levels till date. I am not a a stock perma-bear who is out to deliberately looking for short signals. However with all major indices at or hovering near to all-time high, it pays to be more alert to weakness than ever. Additionally, without any correction even if it is 5%, how can any bull enter the market without a discount as incentive?

Just buy at all time high with ‘faith’ that market will continue to rally or buy based on ‘faith’ that there is a sucker to unload to if shit hits the fan?

So this Ra-Ra rally will have to go on without me.

In this update, we look at STI components end-June and end-Q2 performance. Additionally, charts of DAX30 and XLRE (US Real Estate ETF).

 

STI component stocks: winners and losers end Q2 2017

  1. Straits Times Index is up 1.62% in the second quarter.
  2. Among component stocks, there are 16 winners and 14 losers. This is a notable change from the Q1 with 27 winners and 3 losers.
  3. Gain leaders are OCBC and SIA Engineering.
  4. Loss leaders are ComfortDelgro and Keppel Corp.
  5. Q1 2017 winners and losers here.
STI Components Q2 2017 performance

STI Components Q2 2017 performance

Coming back to the numbers of winners versus losers, this is what I wrote back in April

How much the STI goes up or down is not the only indicator of a health stock market. Market breadth is equally important. Market breadth describes the number of companies that are advancing versus declining. An advancing index accompanied by strong number of advancers is healthy. An advancing index accompanied by strong number of decliners shows bearish divergence.

From a shift of 3 losers in Q1 to 14 in Q2 in conjunction with a steep slowdown in the STI’s gain, I believe the index itself might be coming to a consolidation if not turning point. Whether or not, it is a good exercise to look at the number of winners versus losers to get confirmation.

 

End of June 2017 performance by STI constituents (by month)

  1. Straits Times Index finished June 2017 at 3226.48, up 0.49% from end of May 2017.
  2. 16 companies end the month positive, 13 companies in the red.
  3. Capitaland ended the month unchanged.
  4. UOL and Hutchison Port Holdings are gain leaders up 9.1% and 6.2% respectively.
  5. Genting Singapore and Yangzijiang Shipbuilding are loss leaders down 8.1% and 6.3% respectively.
Straits Times Index constituents end June 2017 performance

Straits Times Index constituents end June 2017 performance | Source: Sginvestors.io

 

Sectors to watch

Two markets I am very keen – DAX and XLRE. Year to date, XLRE (real estate) is the next weakest sector after XLE (energy) in the S&P basket. I wrote about Energy here ‘XLE ‘buyer’s remorse’, loses post-Trump election gains‘. XLRE is still in the positive territory but conspicuously did not make new high and is now printing a rising wedge.

DAX30 weekly chart

DAX30 weekly chart

 

XLRE rising wedge. Did not make new high (that itself is a bearish divergence from the S&P500).

XLRE (top) and SPY from 2016 - present

XLRE (top) and SPY from 2016 – present

Here’s an explanation of rising wedge from Investopedia.

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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 by MahiFX.   Disclaimer notice: "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."
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