Weekend review for DJIA and STI

This coming week will be a pivotal week for the Dow Jones as it is very near to a major resistance level. Such major resistance or support level offers a good reward to risk ratios for taking up positions. Major resistance level for the Dow Jones is around 12760 and volume has been declining for this current uptrend. Another bonus is that the A/D line and the MACD histograms are showing divergences. I will be watching the 12760 level closely to be tested successfully as a resistance level.

Anyway, i drew the vertical lines to show the divergences in the indicators more clearly. It can be seen that as price made a higher level. these indicators did not manage to breach their highs.

Dow Jones Industrial Average:


For the Straits Times Index, it is not converging well with the Dow Jones. It broke through it's prior resistance level though it seems to be done with declining volume. Currently there are no divergences in the STI and there is a continuation gap acting as a support at around 3064. My opinion on the STI is rather unclear now though.

Straits Times Index:

Weekend review of DJIA and STI

Dow Jones look pretty suspicious to me. It seems like a healthy retracement is taking place with the declining volume being seen. On the other hand, I was expecting it to test the trendline as a supportive trendline with the retracement at least but it just fell through the trendline as though the trendline was not there. I am not certain about the direction as of now but it seems to me that the breakout of the resistive trendline was just a facade and this breakout did not carry on with strength.

Dow Jones Industrial Average:


I went to Bear's blog and took a look at his latest posting and his sentiments were the same as mine. It is strange that DJIA had 3 black candlesticks in a row while the STI had 3 white candlesticks. STI seems to be diverging from DJIA and i suspect this is due to the bullish sentiment in the s-shares. If that is the case, we should see STI converging back with DJIA soon. Once again, the breakout of the resistive trendline look suspicious since there was no volume to support the rally after the breakout. Maybe one should take a waiting stance first.

Straits Times Index:

Weekend review of DJIA and STI

Currently, Dow Jones is near the major resistive trendline. I was expecting it to dip back to it's major support level after thursday black candlestick closing but it rallied on friday but failed to close above the major resistive trendline. Last friday's white candlestick was done with heavy volume so that adds to the risk of going short but on the other hand, since DJIA is now near the major resistive trendline, there is a good chance that it will rebound off this trendline. Furthermore, notice that for the last 3 days, DJIA failed to hold fibbonacci retracement of 61.8%.

Dow Jones Industrial Average:


For the Straits Times Index, the support level seems to hold and it remains to be seen whether the minor resistive trendline will hold as a resistance level. Otherwise, nothing much to comment since STI takes it's cue from DJIA.

Straits Times Index:


I been tracking Sembmar on my watchlist. Currently, it seems to have rebound off the major resistive trendline and notice that the black candlestick was accompanied with heavy volume.

Sembmar:

Weekend review of DJIA and STI

I been busy with my school work so I have not been updated my blog for the past week which i apologize for that. For the past week, the piece of important news that came out was that the Fed will pump in money and that cause the Dow Jones to register it's highest gain in 5 years. On hindsight, i should have shorted the rally since following the rally, an inverted hammer was formed on the trendline following the breach of support for the descending triangle and i failed to see that on my chart.

Currently, DJIA is being resisted by a minor resistive trendline and this was done with heavy volume. DJIA is now in the middle of a major support level and a major resistive trendline. My trading strategy still remains the same as my previous post; short at major resistance or breach of support.

Dow Jones Industrial Average:


For the Straits Times Index, the chart is quite similar to that of the Dow Jones so I am not going to comment much on it.

Straits Times Index:


The next date to look forward to will be the Fed meeting which is on the 18th of March or rather, this coming tuesday. We shall see what happens next but I am beginning to have doubts of the ability of the Fed meeting to swing the market up and down since the market is getting relatively immune to it.

Weekend review of DJIA and STI

There has been some important movements for the Dow Jones. On thursday, it broke the 61.8% fibbonacci retracement support level. This means that technically speaking, we are likely to see it testing the January low level of around 11700 somewhere this week. The only thing is that the volume is not that heavy with this current dip so it's a minor thing in my humble opinion.

I dun profess to be able to predict the future so I reckon there are 2 ways which the DJIA can move in subsequent closings. 1st of all, the Fed meeting which can swing the markets is on the 18th of March which is 9 days away from the time of this post. During this period of 9 days, we should see DJIA dipping to around 11700 and hover for a while. It may swing up slightly depending on any rumors of the outcome of the Fed cuts but that is not important. If the Fed cuts are to the satisfaction of the market, we should see it bounce off the 11700 level to sustain a technical rebound. Likewise, if the Fed cuts are not to the expectations of the markets, we will see it break 11700 level into the middle of nowhere. This should conclude the macro trading strategy for the next 2 weeks. In short, if market bounces off 11700 level for a technical rebound, hold your horses for a while before placing a short at expected resistance such as the resistive trendline. If the market falls through 11700, capitalize on the downwards momentum by shorting it.

Dow Jones Industrial Average:


Nothing much for me to comment on the Straits Times Index. I'm just expecting it to hit the level of 2700 soon if DJIA break through it's support.

Straits Times Index:


SGX is looking very attractive to short. It broke it's January low of around $7.56 with heavy volume. Notice $7.56 has been a prior support twice and this looks like a good opportunity to short.

SGX:

Weekend review of DJIA and STI

In my last post, i spotted a doji forming on a resistive trendline on the Dow Jones. And the very next thing was it rebounded off the resistive trendline and it closed very badly on last Friday's closing. I am more inclined to suggest that the candlestick for DJIA on monday should be relatively small since it is unlikely for very bad closings to repeat over and over again.

Currently, DJIA is supported on a minor trendline but last friday's candlestick was done with heavy volume so the move downwards should be relatively huge if it happens.

Dow Jones Industrial Average:


Currently, the Straits Times Index is forming a ascending triangle formation after rebounded off the resistive trendline. There is a slight MACD histogram bearish divergence. Similarly to the DJIA, there was a huge volume for last Friday's closing.

Straits Times Index:


I spotted quite a few counters trending with regularity. Sembcorp is one of those counters. It just rebounded off it's resistive trendline. Notice that there is a breakaway gap at $4.97 and we can use that as a resistance level to short. However, I think the current price has gone too far south so it may not hit this level again.

Sembcorp:

Weekend review of DJIA and STI

Actually there isn't much of a review to do for this week cos next week is the decisive week for the next subsequent trend. The earning report season which accounted for the rally last week is almost over. There will be subsequent US economic data being released along with the Fed meeting and that will be the deciding factor.

Well as a lot of technicians like to say, all news will be reflected in the chart. For the chart of the Dow Jones, it closed just below the resistive trendline last friday. There isn't much valuable information for me to gleam from the chart. Current trend is the market is showing indecisiveness since it has formed higher lows and a lower highs and that coincide with the news that the market should be waiting for next week before deciding on the trend.

Dow Jones Industrial Average:


The same goes for the Straits Times Index. Currently it is resting on a support level created by the previous two gap up. It seemed to rebound off the resistance at around 3150 but nothing is pivotal at this point of time. Let's see how the trend will be confirmed next week and we will be riding a trend hopefully soon.

Straits Times Index:

Weekend review of DJIA and STI

Since my last post, there has been a short term rebound as mentioned in my last post from the point of technical analysis and there has been new development. What can we expect from the chart at this point of time ?

For the Dow Jones, it is now forming a triangle formation and this shows even strength between the bulls and the bears since the DJIA has been forming a lower high and a higher low. It will be prudent to see which side of the triangle it breaks out from. If it breaks from the downside, a new downtrend will begin and vice versa. The next support level will be around 11620.

Dow Jones Industrial Average:


Onto the Straits Times Index, the previous gaps down has been negated or covered back in the last few days. This is due to the bullish sentiment for the budget day thus for that few days before budget day, STI's movement is diverging from the DJIA. Now that the budget is out, the movement of STI is likely to converge back with the DJIA with the DJIA taking the lead. The next resistance level to watch out for will be around 3150 . There are also other resistances such as the resistive trendline which has been tested thrice and the 50d EMA.

Straits Times Index:


Sembcorp caught my attention since it is now at a pivotal point. The prior support level of $4.87 has now become a resistance level which has been tested successfully once so far and now it is near this level. At this level, it formed a hanging man candlestick which is bearish by nature. However, there is also bullish divergence in the A/D line and the RSI so it is conflicting in this sense. Whether it can break out from this resistance or bounce off this will probably depend on movement of the indices.

Sembcorp:

Poising for a technical rebound

From the looks for the Dow Jones chart, it seems that DJIA is poised for a rebound soon. Currently, it is residing on the fibbonacci 23.6% support level. The last 3 candlesticks had a long tails which resemble tweezers bottoms so in my opinion, these factors suggest a rebound should be near soon. The next resistance level will be around 12750.

Dow Jones Industrial Average:


For the chart of the Straits Times Index, it formed a island reversal formation and that signifies a downtrend. Following this, there was a huge gap down and this gap will be acting as a resistance level. Since i expect the DJIA to be rebounding soon, i believe STI will be following suit.

Straits Times Index:


However, both of the intermediate trends for both STI and DJIA are still down. Remember that the subprime issue is not something which can be resolved easily so i believe the coming rally will be still a technical rebound.

Chinese New Year gloom

First of all, a very happy chinese new year to all of you :) But i guess the festive spirit somehow did not spread to the markets.

For the Dow Jones Industrial Average, it broke out of it's rising bearish wedge formation and it closed with a shaven black candlestick with heavy volume. It is expected as it failed to broke through the resistance level that was highlighted in my previous posts. The next support level is likely to be at around 11620. This also register as another time where the Dow Jones failed to make a higher high.

Dow Jones Industrial Average:


For the Straits Times Index, it opened with a huge gap downwards below the psychological support level of 3000 easily despite STI opening only for half a day today. Next likely area of support is 2744.

Straits Times Index:


Cosco Corp seems like a prime candidate for shorting. It bounced off it's resistive trendline with a inverted hammer and it broke the gap support at $4.4. Furthermore, the A/D line is also showing bearish divergence. The likely support level or the target price is around $3.83.

Cosco Corp:


Yangzijiang seems to be ready to be shorted too. It broke out of it's triangle formation but it rallied back to touch the support now turned resistance trendline. Notice that it failed to close back above this trendline. However, this counter seems to be slightly riskier than Cosco Corp in my opinion since the support level is quite near.

Yangzijiang:

A week of whipsaws

This week has been a week full of whipsaws. Whipsaws in technical analysis, in my own layman term is that price action seems to break through a crucial level but it only broke through slightly thus giving the impression that it has broken through it, only to discover in subsequent closings that it din go in the forecasted direction.

This can be seen in the Straits Times Index. There was a gap up previously and this act as a resistance. Subsequently there was a closing above the gap and it seems that this resistance has been broken but it headed south again. Now there was a gap down too previously and this acted as a support. The closing on thursday seems to suggest that this support has been breached but on friday, it managed to climb back to land on the gap down.

Straits Times Index:


For the Dow Jones, it has broken it's resistance level which was acting as a support previously. The channel seems to be forming a rising bearish wedge and it remains to be seen whether it will break out from the downside or from the upside.

Dow Jones Industrial Average:


I am tilting towards bullishness in the short term though i am still bearish on the long term. A higher low and high has been formed for the Dow Jones and a higher low was been formed for the STI. Furthermore, it seems all news has been discounted into the price action already and this is perhaps the recovery phase but I believe the market cannot recover back to it's previous high.

Ferrochina has been good for shorting since the testing of the gap at $1.46 has failed and the result is that this counter is plunging downwards. This price action of this counter is very regular and it might be worth taking another look.

Ferrochina:

Middle of nowhere

Straits Times Index did not rally back to the resistive trendline that connected the previous 3 peaks or rather, it has not return back to test the resistive trendline yet. Gaps can act as technical levels of support and resistance. For the STI, it can be seen from the chart that the gap up is acting as a resistance and the gap down is acting as a support level and STI seems to be sandwiched between both gaps. Furthermore, the gap down is at the psychological level of 3000 points where a lot of speculators are sentimental towards this level. The trend can only be judged depending on whether STI breaks it's support or resistance level. However, i am still bearish since the rally a few days ago was a false one since it was done with declining volume.

Straits Times Index:

Market reversal

Today, a lot of technical factors suggest that a market reversal has taken place. For the Dow Jones, it appears to pierce the February support level but it formed a hammer candlestick with a very long tail. This hammer was formed with very heavy volume and this increases the probability of it being a technical indicator showing a market reversal.

Dow Jones Industrial Average:


The Straits Times Index gap down on 2 closings ago and it opened with a gap up today. The gap down acted as a resistance technically and today's closing covered back this gap down and this is bullish. Furthermore, by candlestick theory, an morning star formation has been formed with heavy volume and this is bullish too. For the technical indicators that i have chosen, both the RSI and the A/D line are showing bullish divergence.

Straits Times Index:


Technically speaking, i am quite convinced that the market has reversed or is already reversing. Right now, i am just waiting for a higher high and a higher low. But i cannot forecast whether this will be the next bull run or just a longer term technical rebound simply because technical analysis is not a crystal ball which allows you to gaze into the future. Thus it is better to be cautious still. Personally, i don't think that the subprime issue is something that will go away easily and i believe it will still be an issue for this year so i am still expecting turmoil on the markets.

Weekend review of DJIA, STI and HSI

Volume is an essential tool in technical analysis since in technical analysis, volume confirms price action and this was important tool for market action for the past week.

For the Dow Jones, it broke the August closing support level and is now heading towards the February support level. The striking thing about the chart is that as the index action plunges down all the way, the volume increases with this action and that is confirmation of a very bearish trend.

Dow Jones Industrial Average:


I took a look at the weekly chart and the chart reveals quite a number of things. A trendline was drawn connecting the peaks in 2006 and this trendline was a resistive trendline which turned into a supportive trendline for 2007. This trendline support was broken this week with very heavy volume and currently it is landing on the February support. Let's see whether this support will hold.

Dow Jones Industrial Average Weekly:


Since the Straits Times Index has been revamped with the addition of new components and a downsizing of the total number of components, i am playing safe by choosing only to evaluate the STI after the 10th Jan. The new STI in my opinion is less useful since it has less components though there are other new indices which were created along with the revamp of the STI which can overcome the shortcomings of the new STI. However, STI still plays a huge part since most speculators are still sentimental towards the STI. This can be seen in forums where people suggest that 3300 is an important support level though the STI has been revamped.

There was a gap down on 3 closings ago which can act as a resistance technically and this gap was not covered back so things are still bearish.

Straits Times Index:


The same goes for the Hang Seng Index which had a gap down but this gap was not covered back at all. However, HSI seems to be resting on the 200d MA.

Hang Seng Index:


Overall, i am still bearish on the indices. There is still no higher highs and higher lows for the indices. Furthermore, the volume has not decline yet although i must say that the market is getting used to the downfall. Barring a market capitulation, i believe in my humble opinion that there is still some more downfall to go.

Weekend review of STI and DJIA

Dow Jones did not hold the trendline dat i posted for my last post. It broke the trendline convincingly and now we are looking at at the Aug and Nov correction support levels again.

The level of around 12710 is the level for the prior corrections as seen on the chart and we shall see how DJIA approach this level. This level is a very significant level so there is some chance that it will bounce off this level by showing a hammer candlestick perhaps. If it breaks this level, it will be very bearish since this will result in a lower low according by Dow theory.

Notice that the trendline for the A/D has been breached and there is also a MACD crossover.

Dow Jones Industrial Average:


For the Straits Times Index, it rebounded off the resistive trendline. Similar to the DJIA,
the level of around 3300 will be a crucial level since it was the support levels for the August and Novemeber correction levels thus this level is likely to act as a support. We shall see how STI test this level too.

One thing is for certain and that is STI will gap down for the opening on Monday since DJIA closed so badly on Friday.

Straits Times Index:


Lian Beng broke out of it's historical closing level on last thursday and we saw a doji on friday. The candlesticks were unshaven which implies that they did not close near their highs so this does not give a good signal of a strong breakout. It is likely we may see some retracement back to $0.78 before the start of any other movement. $0.78 is a significant level since by technical analysis, resistance levels often converts to support levels. It was a resistance level twice thus now it has turn to become a support level. Notice also dat the volume has become light again.

Lian Beng:


For ChipEngS, it's hard to determine where it is heading. It is falling with declining volume and that is very typical of a flag formation. Gotta see what this develops into.

ChipEngS:


ChinaXLX broke out of it's resistive trendline on friday. This counter has been under my watchlist for a long time. It should land around the 50% fibbonacci retracement level which is also near the resistive turn support trendline.

ChinaXLX:

Start of the new year !

This will be my 1st post of the new year ! :) Quite excited about it though i can't say the same for the markets now.

For the Straits Times Index, it closed well with a shaven white candlestick with a heavy volume. Notice that STI only opened for half a day, so i consider that volume to be relatively heavy.

However, STI broke it's channel support 2 closings ago and notice that it rebounded off the resistive trendline. We shall see whether STI will break this trendline in subsequent closings. Meanwhile, STI is still forming a higher high and a higher low.

Straits Times Index:

Weekend review of STI and DJIA

By the Dow theory, a higher high and a higher low is confirmed for the Dow Jones thus an uptrend is still in place despite the dips recently. I believe DJIA should rebound off from it's current level technically.

DJIA has tested the 200d MA and has successfully close above it for the past 2 closings. Furthermore, the formation of a doji candlestick suggest that a short-term bottom has been reached. Moreover, DJIA now lies on a trendline that was drawn connecting the prior two higher lows thus i believe DJIA will not dip anymore beyond this level technically.

Dow Jones Industrial Average:


What is being said for the DJIA is different for the STI. The Straits Times Index tested the 200d MA on thursday and failed to close above it and i consider that to be bearish. Notice that this also rebounded off the resistance trendline drawn connecting the prior two highs. There was a prior small gap up which will act as a support technically so there is a chance that STI will dip til this level. However, for both the DJIA and STI, the trading volume still remains light overall.

I am still bullish overall going by the charts and if one still believes that the DJIA is a leading indicator of the STI.

Straits Times Index:

Rally led by retailers

Dow Jones broke above the 200d MA and along with the other MAs used in my chart, namely the 50d and the 100d MA and that is a bullish sign. Next resistance will be the prior peak level around 13767. Overall, it's a good sign that DJIA is finally recovering.

Dow Jones Industrial Average:



I do have more observations on the Straits Times Index. STI is still below the 200d MA but given that DJIA is now above the 200d MA, STI should be testing it soon subsequently. Next resistance level will be the prior peak level which is at around 3621. A breakout above this resistance will result in a double bottoms formation technically.

Today's trading volume was exceptionally light though it was a full trading day. The 2nd last closing's volume was light because STI only traded for half a day. This would mean that the rally was led by the retailers and the funds are still not back yet and that does not sound very good to me. I can't predict when will they be back though most speculate that they will be back after the new year. However, it will be reflected in the chart technically.

Straits Times Index:


Anyway, congrats to all those who bought near the November prior support level. That support level held and those who had bought den should be sitting on some profit buffer now :)

AdvSCT caught my attention on my list of charts. The level of $0.935 is an interesting level. Notice that there were 2 prior gaps up on the chart at this level thus they are acting as a support at this level technically. Furthermore, the level of $0.935 was tested successfully as a support level by the candlestick tweezer bottoms. This level should be safe to buy in.

AdvSCT:

Weekend review of STI and DJIA

This post will be a very simple one. The Dow theory worked relatively well in the previous corrections though by the time it is confirmed, it is a bit late in catching bottoms. Rather it can be used to confirm bottoms. A higher high and a higher low will confirm a uptrend and a lower high and a lower low will confirm a downtrend.

For the Dow Jones, it can be seen from the chart that a higher low has been confirmed. Going by how it pierces the peak of the index action, a higher high has also been confirmed thus this implies that a uptrend is in place. Notice that the latest closing was done with heavy volume.

Dow Jones Industrial Average:


For the Straits Times Index, a slighter higher low has been confirmed and a higher high is also in the making. Thus this should signifies a uptrend is taking place.

Straits Times Index:

A Merry X`mas indeed ?

Yesterday, i saw the Dow Jones broke the 200d MA and i tot that was ominous enough. To my surprise, STI and HSI did not plunge further but STI rallied instead. Now as i am looking at the Dow Jones, it opened on a gap up. I must say i was quite taken aback since usually Dow leads the HSI and STI and now the vice versa has happened.

STI was supported on the previous support level made in the Nov correction. Today's volume was heavier den the previous down days and that is good. That is a good chance that it may hold at this level.

Straits Times Index:


Today, a lot of counters tested their November correction level successfully. This represent a good chance to enter at a good reward to risk ratio. Nothing is absolute in any analysis so if this November correction level fails to hold, it will be time to get out to limit losses. Below are some counters which are at a strong level of support.

China Hongxin is supported on the 200d MA and a trendline that goes all the way back to March. Notice that this trendline has been tested 4 times successfully and these are signs of a valid and a strong supportive trendline.

China Hongx:


For the STX PO, the level of $2.59 has been a important level. It started off as a resistance level in July before this resistance became a support level in Sepetember and November. It tested this level successfully today. However, this is a very volatile counter as it can move up and down a lot of bids in a single trading session.

STX PO: