STI saved by a holiday ?

The Straits Times Index was indeed saved by the Deepavali holiday. Dow Jones closed with a huge black candlestick. Given the volatility and the sentiment of the local market now, STI would not be spared from a drop if it had open on holiday.

Looking at the Dow Jones, the long black candlestick seems to be supported on a trendline which was drawn from around one year plus ago and one which has been tested thrice so far. Close to the trendline, there is a red line beneath it which is the 200d MA. The 200d MA which acts as a strong support or resistance, is a gauge on whether the market is a major bear market or a bull market. Any close beneath it will signify that the market is in a major or at least a intermediate bear sentiment. Furthemore, we can see that a higher high and a higher low has been formed and this means that currently, Dow Jones is in a short-term bear market.

In my opinion, due to the confluence of these technical factors, i.e the support of the trendline and the 200d MA which are close to one another, Dow Jones will be supported around the 13200 region. Any break below this will be disastrous. I dun have the volume displayed in ChartNexus for the past 2 closings so i'm unable to tell whether this drop was significant or not.

Dow Jones Industrial Average:


For the Straits Times Index, i said long ago that there was a possibility that the index may retrace back to do a double bottoms. I guess it is happening now though it was faster den i expected. Currently, STI is supported on the 50d EMA and RSI has hit it's prior correction oversold level so STI should hold around the level of around 3630. Given the current market sentiment now, it is hard to gauge whether this support will hold around 3630 since STI is now driven mainly by the Dow Jones and the HSI. This situation now for STI is more of a "see how it goes before taking any action" kind of situation.

Straits Times Index:


On a personal note, i dun have a good feeling about the market sentiment now. It is like the market is slowly dying instead of dying a sudden death as in the case of a major correction. Counters are slowly dipping back to their previous support levels. I just have this nagging feeling that something big is gonna happen soon.

There were some interesting reads on the CNA rallyartist thread. One of the gurus, ccloh noted something is happening for the counters Wilmar, IndoArgi and GoldenAgri which are linked together. These 3 stocks are in play now and they often rally together. Below as what he observed:

"suspecting these ang mos are trying to swtich their fund out from defensive counters temporary to help pump up the price for those 3 counters. why i suspect that. as the name mentioned defensive stocks, their price range won't move much even fund are selling. once they pump up the price of the 3 of them, sell with a gain, they can always come back to buy back those defensive stocks practically at not much the price they are being sold. why they need to do that ? the ang mos are having their backyard caught in the fire with the subprime, they dont have excess fund to pump in and obviously they want to get some "profit" from here to fight the fire back at home."

I guess this is something no amount of charting can tell u about. This is done by using 'tester' lots. This thread has been an interesting and an informative read for me and i have learn stuff through it :)