Theoretical Bearish Market

A quick look at the Dow Jones Chart reveals that there is some weakness in the market. I feel that i can read the last candlestick which looks like a doji in two ways. From a positive point of view, Dow is still holding near the level of 13250 stubbornly despite the latest low reaching a new low for this current downtrend so this level acts as a strong support. From a negative point of view, the record new low for this current downtrend suggest that the market is losing strength since it can reach that new low. Right now, i'm just waiting for it to break the support of around 13250.

Now gotta move on to how Dow has affected the STI so far. STI still holding strong too at the level of 3310 which has been acting as a support on this downtrend. Today, i decided to use the line chart of STI to get a clearer view. Using this line chart, i should have notice earlier that STI is currently in a bearish trend as STI failed to make a higher high and a higher low for the past few weeks already. By Dow theory, a lower high and a lower low means that a bear trend is in place so right now, just gotta wait for it to bottom out and form a bullish trend.

On a side note, STI is showing bullish divergence on the A/D line so maybe this downtrend might be ending but nothing is confirmed by the technical indicators and signs on the charts yet.

Dow Jones Industrial Chart :


Straits Times Index Chart :