Middle of nowhere

Today i redrew the charts for the Dow Jones and the Straits Times Index cos things were starting to get messy. On a personal note, i dun reli like to add in the fibbonacci retracement level cos there are so many horizontal lines so i gotten rid of those on the Dow Jones chart. It still remain intact for the STI chart.

For the latest closing, Dow Jones formed a harami candlestick due to a black candlestick on the 2nd previous closing and a white candlestick on the previous closing whose open and close are within the black candlestick. The harami candlestick formation is slightly bullish so i am expecting the Dow Jones to trend sideways or go down until further technical indicators suggest otherwise. Notice also how the white candlestick has a heavier volume. Dow Jones will be hitting the resistive trendline soon so a break of this trendline will be good news since this trendline has been resisted 3 times.


On a side note, i kinda toy with the idea of the point of death on the chart. It's just a term coined by me cos i was wondering if the Dow Jones failed to break the resistive trendline at all and break the support of 12800 in subsequent closings, this may have very bearish implications. So the point of death is the intersection of the horizontal support line of 12800 and the resistive trendline. But i tink the chances of this happening should be quite low.

Dow Jones Industrial Average Chart:


STI formed a dark cloud cover today and the black candlestick today closed with a heavier volume. I am expecting it not to break the 200d EMA.

Straits Times Index Chart:


CSC has been in the top movers list recently. I spotted something bearish on this chart today. It formed a dark cloud cover on the $0.335 resistance with heavy volume. Notice how the $0.335 is very near to the 100d EMA which suggest that the 100d EMA is acting as a resistance. A dark cloud cover formed near a resistance level is very bearish so a trade exit should perhaps be warranted.

CSC Chart:

Rebounding off resistance

Through technical analysis, we saw how the Dow Jones rebounded off the trendline that was drawn on the chart a few posts ago and it closed down sharply on the latest closing. If the Dow Jones fall, it should land around the area of 13000 due to a confluence of technical indicators.

1. It is near the fibbonacci retracement of 50% and 61.8%
2. 200d MA is quite near the level
3. The previous low for this current trend and the previous high from the uptrend that ended in Feb 07 is near the level of 13000.

We shall see how the Dow Jones approach the 50% fibbonacci retracement which is an important landmark on the charts.

Dow Jones Industrial Average Chart:


Nothing much to say about the Straits Times Index. Currently seem to be supported on the 200d MA and subsequent trends will be dependent on the Dow Jones. I posted a chart for reference and future keepsake.

Straits Times Index Chart:


Ausgroup has retraced back from the breakout of $1.74 and is now forming a hammer testing the upside gap on the support level of $1.59 which suggest that this level is quite a valid support. We shall see how this counter moves in subsequent days.

The main thing to watch now is where will the indices be finding support at.

Ausgroup Chart:

Index forecast currently on track

Currently my forecast from previous posts for the charts of Dow Jones and STI using Technical Analysis is on track. Nothing unusual today, cos the market still singing the same tune and that is index moving up and yet the volume is declining.

Anyway take a look at the purple line which is touching the previous tops. I drew this line in the previous posts and on the latest closing of the Dow Jones, the index failed to move above this purple line and closed just on the line itself. A bit too coincidental ? That is technical analysis in action :)

Dow Jones Industrial Average Chart:

Similiar charts

In my last post, i posted that Dow Jones will have a weak rally due to volume not confirming price action. Today's closing of the STI is just a repeat of my previous post. From the chart of STI, the price action went higher but the volume is very light. Furthermore, it rebounded off the 1.5 years old resistive trendline. So my conclusion is that this rally for STI is very weak. We will be seeing how STI will test the upside gap soon.

Straits Times Index Chart:


I have been feeling very baffled by the chart of DMX Tech. It's my 1st time encountering such a chart like this. This is because of 2 reasons. The 1st reason is that the A/D line is showing huge bullish divergence and yet the price action continues to go lower. So accumulation is probably taking place. The 2nd reason is that when the price action is moving down, it formed a lot of trend reversal candlesticks at possible support levels, mainly at $0.545 and $0.5 but yet the downtrend continues. I can probably count like 5 hammers and 2 dojis in the yellow area i highlighted. I been observing that hammers work well for STI counters and whenever hammers appear near support levels, it is likely a bottom has been reached and a trend reversal is highly possible. So that's why i find this chart so strange. Price action precedes news so we can probably expect to hear some fundamental news soon.

DMX Tech chart:


I am gonna sign off this post with a very important principle in technical analysis and that is
"Volume confirms price action". It can probably save my life in the market next time :)

Volume not confirming rebound

Well, the above title of the post says it all. A very basic tenet of technical analysis is that volume should confirm price action. Basically if the price action goes higher, the volume should expand instead of decline. A look at the chart of Dow Jones reveals though price action broke out of the crucial horizontal resistance of around 13247, the trading volume was light. Thus volume did not confirm price action for this breakout. As of now, i expect this rebound to be weak. Some possible scenario would be that the price action rebound off the resistive trendline and get supported at around 13247.
There may be some profits to be made for ppl who contra or short but my trading time frame is much longer than this so my current position is to stay out and observe the market further.

Dow Jones Industrial Average Chart:


On a side note, i am reminded that the more times the market fails to make a higher high or break a resistance, chances are that the market will be 'lethargic' and a very steep correction will happen. It is like if u bang the wall a few times and the same wall still dun come down, probably u will give up and come back another day. Maybe banging the wall is not a very good example but it's the only apt one i can think of as of now.

Drawing near to end of week

I am eagerly waiting for the Dow Jones to close in a few hour's time as the closing can proved to be crucial for the trend next week. Nothing too technical on the Dow Jones chart for this post. No complex formulas for technical indicators to bother with. Just the simple old-school classical technical analysis and the basic concept of support and resistance with trendlines. There is just one thing to watch out for and that is whether Dow Jones can break the horizontal resistance of 13250 with high volume.

Dow Jones Industrial Average Chart:


Some bullishness spotted on the STI. A hammer or a near-doji was formed on today's closing and it tested the upside gap of around 3320. Notice that this hammer had a very long lower shadow and this contributes to the bullishness of the hammer. Coincidentally, 3320 happened to be the resistance level at around March this year. Thus the level of 3320 should be an important support level for the days to come.

But also take note that the STI still failed to break the trendline and the 50d and 100d EMA. I think i am getting contradictory :p

Straits Times Index Chart:


Today Ausgroup formed a harami which suggest that there may be a change in trend so gotta keep on observing the chart for this counter.

Ausgroup Chart:


The chart for Singtel taught me some stuff which i read before in a book but yet to seen in real charting before. I was reading one of Larry Williams books and there was a concept which i still remember it as the quick profit day. Basically, the price action would be trending sideway or forming a rectangle. If the A/D line suddenly shoot up while the price action is still within the rectangle, a trade entry is warranted.

Notice for the A/D line for Singtel's chart, it broke out of a horizontal resistance with a very steep gradient while the price action gap down. And soon after, price action broke out of the rectangle soon.

Since this is only my 1st time seeing this, i am not proposing that i should always place a long whenever i see this situation happening again. More observation is needed to confirm the validity of such a strategy. But meanwhile, i will just post this chart for reference.

Singtel Chart:

Some light seen

Nothing much to comment on the Dow Jones. It tested the resistance of around 13244 on the latest's closing and close near this resistance. The next 2 closings for the rest of this week will determine the trend for next week. A close above that resistance with heavier volume will prove to be a piece of good news.

Dow Jones Industrial Average:


STI managed to filled up the 2 downside gaps that was mentioned in my previous entries by closing on an upside gap. It tested the 50d and 100d EMA today and close at the 100d EMA. Notice how the today's close was very near the previous high thus a close above this previous high and above the 50d EMA will be great. Not trying to sound extremely bullish, but there are bullish divergences on the indices for MACD, RSI and A/D line. Perhaps the time has come for a trend reversal but main thing to watch out will be a higher high and a higher low.

Straits Times Index Chart:


Ausgroup seems to be breaking out out the horizontal resistance near $1.795 which was a support line on 3 previous occasions. Today it broke out with a high volume. Notice how the MACD is abt to have a crossover and there is a A/D line bullish divergence. If the indices turn bullish on friday, a entry may be warranted if the price retrace back to the resistance of $1.75 with light volume.

Ausgroup Chart:

Rebound halted

Dow Jones made a higher closing but it was on light volume so it is still bearish in the short term. Now waiting for it to test the resistance of 13257.

Dow Jones Industrial Average Chart:


There were 2 downside gaps on the STI chart near 3212 and 3352. The downside gap of 3212 was closed on Monday but the downside gap of 3352 was not closed. STI tested and attempted to close this gap but failed to close it and this is a sign of bearishness.

Another thing was that today's closing was a black candle with low volume and that is a bullish sign actually so i am taking note of it. But meanwhile everything else still looks bad on the charts.

Straits Times Index Chart:


If u notice carefully on the charts, the same story has been repeating over and over again for the past one to two months.

1. Index fail to make a new high or break it's resistance
2. It den fall back to next level of support
3. It may hover around support or attempt to rally up but any rally was weak which was confirmed by light volume
4. It fell through support and land on the next support
5. Step 3 repeats again

A few charts caught my eyes today. The 1st one is DMX Tech. I been monitoring it for a few months already. It's interesting cos i never seen such huge divergence before. Look at how the A/D line is trending upwards at an exponential rate while the price action just keeps falling ! I visited some forums and i think there are some rumours of a takeover by other company. Maybe that explains it but it does not matter cos price action always precede news.

DMX Tech Chart:


The next one would be Jardine C&C. It caught my attention cos i saw it in the top price movers list. Well these days, banking stocks keep hogging this list so when i saw this, i tot i better make a chart of it for my observation.

Bascially it had 2 downside gaps and it is attempting to close the 1st downside gap but it failed to close it, forming a bearish engulfing pattern

Jardine C&C Chart:

Technical rebound in process

STI which is the Straits Times Index rebounded indeed today. But i din expect to rebound so strongly. Technically, the last closing was a strong rebound as STI close at it's high with no upper shadow for it's candlestick. I still dun have the volume data for the STI chart from chartnexus so kinda getting frustrated but den they been doing a great job so far and anyway it's free so i can't complain much but to look for the trading volume from other sources myself.

Due to the 2 downside gaps near 3212 and 3352 formed a few days ago, i drew 2 horizontal lines at those levels as they are likely to form a resistance level. STI has already covered up the 1st downside gap at 3212 with an upside gap on it's latest closing. Current closing is near fibbonacci retracement of 50% so things to watch out for in the chart will be the testing of the level near 3352 and hopefully the 100d EMA.

A lot of counters in Singapore, like what i said in the previous post are positioning for a trend reversal and i already saw a lot of bullish divergence in the technical indicators in some of the counters that i am monitoring. But i will only enter if STI makes a higher high and a higher low. The previous high is now near the level of the 100d EMA so the testing of that level will be crucial.

Straits Times Index Chart:

Technical rebound perhaps

Looking at the chart of Dow Jones, there was finally a respite as it finally closed higher last friday. But still, the white candlestick was accompanied by low trading volume and this has been becoming a familiar sight. Notice how Dow formed a very strong hammer which was accompanied by a very long lower shadow and by friday's closing, it formed a morning star-like variation. However, with high volumes accompanying black candlesticks and low volumes accompanying white candlesticks which has been becoming very common nowadays, it is still not looking good technically. We will have to see how the Dow Jones test the 100d EMA and whether it will break the support-turn-resistance level of around 13260. Still gotta remind myself that the Dow Jones has failed to make a higher high and a higher low so i am still bearish.

Dow Jones Industrial Average Chart:


STI formed a hammer-like candlestick with significantly higher volume on Friday's closing. Since the Dow closed higher on friday, i believe STI is likely to have a small rally which will test the 200d MA.

I do believe that there will be a technical rebound going by how the charts are forming a lot of trend reversing candleticks. But i think it will still be short-lived going by the technical indicators so far. So just gotta keep on watching the charts.

A lot of counters are again positioning for a rebound but going by my previous posts, though counters maybe in a position for a technical rebound, it may not happen as a lot depends on the direction of the indices.

Straits Times Index Chart:

A greater gap down !

Today really 'no eyes see' for the chart of STI. It gap down with a even greater gap for the latest closing. Whether STI can close back the gap will depend on the Dow Jones. I noticed that from the chart of STI, it gap down effortlessly through the important 200d MA. Looking at the chart, i believe STI will either test the 200d MA or find support near 2930 due to the 2 factors below.

1. Near 2930 coincides with a fibbonacci retracement of 50%
2. Near 2930 was an area of support during March 07

Right now, STI currently is supported near the fibbonacci retracement of 38.2% and i noticed that around this region was an upside gap that was not filled during March 07 too thus this gap may be acting as a support currently.

Straits Times Index Chart:


I charted the support that Dow Jones can find around 1 month ago and the link is here

Anyway, it is really strange to me that though the stock market is quite bearish now, if u look all around u, u still can see speculators trying to enter the hot property sector where the prices of properties are still increasing and the government forecasting an even greater economic growth in the subsequent months. Analysts are still churning out reports that the fundamentals of the economy and companies are still solid. I do think that the stock market is a leading indicator of the economy so if the current situation turns into an even greater bear market, we should be expecting an economic slowdown soon i guess.

Market is always right

The market is always right and i can be wrong. The support on the Dow Jones at around 13230 was broken and it closed near the 50% fibbonacci retracement. Strictly speaking, Dow has failed to make a higher high and a higher low already over the past few weeks so i consider us to be in a bearish trend already. Gotta see how Dow performs over the week.

Chartnexus din manage to provide me with the price for the latest closing so i took some initiative and drew on the candlestick for the latest closing for the STI chart. It appeared that there was a gap down on the latest closing so i will be observing how STI will attempt to close up the gap over the subsequent days. If not, STI should find support near 3220 due to a confluence of technical indicators such as the 61.8% fibbonacci retracement and the all-important 200d MA which signifies the direction of the major trend.

With all indices down, it should be pointless to look at any counters now. With the indices down, chances are that most counters will be down too.

Dow Jones Industrial Average Chart:


Straits Times Index Chart:

A technical rebound might be on the way

Quite lotsa stuff to post. Haven seen anything like this quite some time already. I was looking at my charts and i saw a lot of counters positioning ready for a rebound with all the technical signs in place.

Looking at the Dow Jones chart, it formed a doji on it's previous closing and add to that another hammer on the 2nd previous closing. Furthermore, the doji and the hammer were formed at the crucial support of 13230, which is also the fibbonacci retracement of 38.2% level. From this confluence of technical indicators, there is a high probability that Dow Jones will rebound off this support unless something drastic like 911 happen. BUT i consider the Dow to be trading sideway now so unless it breaks the resistance of 13700, any rebound is likely to be short-lived.

Dow Jones Industrial Average Chart :


Moving on to the STI, it failed to close above the 1.5 years old trendline, forming hanging mans on 2 previous occasion. However, a hanging man should be ideally confirmed by a bearish candlestick and a gap down so i am taking this with a pinch of salt. But the appearance of the hanging mans suggest there is some weakness since i consider the failure of being unable to close above the trendline being very significant. The closing above the trendline mainly depends on how the Dow Jones will perform in subsequent days.

Straits Times Index Chart:


It is almost queer that those charts that i made from counters that were inside the top volume list a few months ago are now reappearing back in the top volume list nowadays. Since i believe STI is likely to rebound, i spotted a few charts from the property sectors with all their technical indicators suggesting a rebound. It's mainly from the property sector cos the property sector is very hot now with a lot of speculators. Well that's wat i saw on Channelnewsasia but it does not really matter since price action precede news and whatever news there is out there will be reflected in the charts. I notice the hotels sector is showing some divergence too but that will be for another post.

Basically for the charts below, all their technical indicators are showing bullish divergence already. What is left for them now is to break their nearest resistance.

SuntecReit Chart:


CapitaMall:

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 :

Chart of Asia Env

I have been noticing that there are price divergence in the environmental cum water sector and the property sector. Some of these counters dun seem to be affected by the STI recent lacklustre performance. Below is the chart of such a counter.

The end of NDP

I forgot that SGX not trading on National Day so despite the indecisiveness spotted in the Dow Jones for 2nd last closing price action, STI was partially immune to the indecisiveness.

A look at the technical chart of Dow Jones reveals that it closed strongly on it's latest closing. My charting software now has problems displaying the trading volume of the Dow Jones Industrial so can't really tell whether this strong closing is justified. I noted from my chart that the Dow tested the region of around 13770 but failed to close above it and 13770 was a previous resistance on 2 occasions. Thus i believe STI will only rally if Dow break this resistance level. Gotta see whether Dow Jones will break that resistance level later in the morning and see whether STI will break the 100d EMA today.

National Day Parade + Rally !

There is this saying that goes around the trading community that when it is near national day parade and that is STI will rally up during the period national day parade. Tink this prophesy was kinda fufilled when STI rally today with a close that broke that all important trendline that was formed 1.5 years ago and is now above the trendline. But a closer look reveal that things are not rosy.

Why am i saying this ? Firstly we should take a look at the Dow Jones. At the latest closing, Dow managed to close and get supported by the 50d EMA. But a closer look will reveal that there was indecisiveness in the market as the candlestick showed a high and low that was far away from the open and close and forming a doji-like candlestick. Another technical indicator is also not looking that rosy and that is the volume. Volume is still lower than the previous day and was definitely lower than the day when Dow slips heavily on the 3rd of August. Volume confirms price action in Technical Analysis and a higher close should be confirmed by heavier volume. Thus this indicates that things are not actually as bullish as to be seen.

Now moving on to the STI, it managed to close the gap formed 2 days ago and that is a piece of good news. It is of utmost importance to see how high will this rally go. For a lower high and a lower low will therefore confirm a bear market is in place. I tink now everyone is not expecting STI to break it's highest high of near 3650. Right now, i am just waiting for a bear market to be confirmed and when it is confirmed, wait again for it to bottom out. Current stuff to watch is to see whether STI will break the nearest resistance of 100d EMA and see STI should find support on the 1.5 years old trendline which i expect it to be. Chartnexus which is my charting software has not been displaying the trading volume for STI for the past few sessions so i am lacking an important technical indicator and that is volume so i can't reli comment more on the price action from the perspective of trading volume. Hope they rectify the problem soon :-/

More than what it seems

Accumulation seem to be spotted in some properties counters. But take it with a pinch of salt as market is still looking bearish now. Basically a few technical indicators is showing bullish divergence with the indicators making a higher low when price action is making a lower low.

I tink i saw a hole rather den a gap

Today STI gapped down almost 100 points today landing at around 3300. Well, like what i posted in my previous few posts, STI landed at around 3300 but i got 2 of my technical indicators wrong. It landed at 3300 due to a fibbonacci retracement of 50% and most importantly, 3300 was a previous important resistance level in around late Feb. Guess i still got some stuff to learn and i really got to be more observant.

I am really very surprised that STI broke the supporting trendline that was formed 1.5 years ago so effortlessly. Din see STI trying to form a support on the trendline at all. Guess i am expecting STI to hold at around 3300 and it will attempt to fill the gap over the next few days. Gota see how STI will test this important trendline and how it will fill the gap. Otherwise, down and down is the only way for STI to go. Anyway, i realise in a bear market, the trend will just go down very fast in a very steep manner. Maybe this is wat is happening now. If it goes down, STI will likely find support near 3220 at the 200d MA with a 61.8% of Fibbonacci retracement.

Btw, all 3 banks and that is , DBS, UOB and OCBC all made it into the top volume list today. Getting more and more bearish. :-/

Banks falling with high volume

For the past few weeks, penny stocks has been hogging the top volume list cos they are cheap so people can buy lots of it and there was a lot of speculation going on. On Friday, i spotted OCBC in the top movers list. A look at the charts of OCBC, DBS and OUB revealed that all 3 fell with high volume. Some signs in the charts includes :

1. A/D line failing to make a new high while prices made a new high
2. Head and Shoulders formation confirmed
3. Prices hovering near 200d MA with 2 charts already breaking it
4. MACD failing to make a new high while prices made a new high

Not that sure what can be the implications of this. These counters are definitely darn expensive and if they can hog the top volume list, i'm pretty sure something is very wrong.

Anyway i asked myself how come i keep posting and forecasting on the different levels of support which the indices can fall to. The main thing now is to wait for the market to reach it's bottom and enter into it when signs of accumulation and upside momentum are taking place which can be seen by the technical indicators.

Chart of LottVis

LottVis has quite a interesting chart which i hardly see before. Distribution is spotted very early at around the end of May. This is when prices start to trend sideways, yet the Accumulation/Dist start to trend downwards with quite a steep slope. When prices made new highs in June, MACD which measures the momentum of prices failed to make a new high. So the warning signs actually appeared quite early before the price start to spiral downwards. Now the price seems to be supported on a previous support which was made in May at around $0.44. If the price fails to hold, the next support is likely to be at the Fibbonacci retracement of 50% which is at around $0.40. If this fails too, the next likely support is at the $0.33 due to 3 factors.

1. 200d MA
2. Upside gap made in made in early April
3. Fibbonacci retracement of 61.8%

Falling market

Upon reading the papers today and contrasting with how the markets are doing recently, i must say that it is really ironic. Why ? Cos the papers have been reporting that unemployment rate is at a record 5 years low and the economy is doing well but yet the markets are doing badly. Well, the stock market is an early indicator of how the economy will be doing so i guess there will be more news to come.

Since school is starting in 2 weeks time and the markets are doing so badly, no point in looking at the charts of various counters, so i picked up another book to read. It is called 'The secret of selecting stocks for immediate and substantial gains' by Larry Williams. I must say this book has been interesting so far. It is not those run of the mill kind of TA books where they teach u about chart formations which can be found in any other TA books. He offers a new kind of perspective about trading and talks about how he formulated his own technical indicators. Upon reading the 1st few chapters, i realized that the A/D (Accumulation/distribution) line is a refinement of the On-Balance Volume (OBV) technical indicator which i have already found it quite useful in detecting accumulation and distribution. So i will be testing out the A/D indicator for the months to come. Anyway Larry Williams really walks the talk as he won a recognised nationwide competition and he turn i think $10000 to nearly $1000000 in 12 months time and his daughter did the same thing too ! Amazing stuff man :) Think wikipedia has quite a lot of info on him.

Anyway, Dow broke the support of around 13250 and STI failed to make a higher high this time round.