Straits Times Index (STI) Mid-Week Review

The STI has been going down together with the S&P 500 in an almost similar fashion. I believe that the end of the downtrend is in sight. Let’s look at the charts.

The Primary count that I had previously which called for an impulsive up move is not valid anymore as the STI has moved too deep and invalidated that move.

The previous Alternate count 1 has now become the Primary count and this is depicted in the below chart. The move up from 4 Oct 2011 is an a-b-c corrective move which completes the Minor A. The down move that followed Minor A is Minor B which is either a double zig-zag or a flat. This will be followed by Minor C.

23 Nov 2011 Primary Elliott Wave Chart

Alternate View

The Alternate view is a bearish view and in this count, the down move is depicted as an impulsive move. The labelling denotes this as the early phase of Intermediate (3).

23 Nov 2011 Alternate Elliott Wave Chart

MACD

MACD is clearly heading down but there is no twin peak type of divergence so there could still be one leg up to form that second peak.

Volume

The selling volume in the early part of the down move was higher and now selling has dropped drastically. This indicates waning selling strength. Unless the selling volume picks up, this downtrend will likely pause here or even start to trend up.

Bottoming Process

The STI gapped down this morning by about 20 points and has since closed the gap. This is a good indication for the bulls but the STI may still head a bit more lower from here. Watch the move for the day. If after closing the gap, the STI moves lower but does not hit the 2659 which is the low of the day set so far, and moves higher from there on, this would indicate a bottoming process.

If the low of the day (2659) is broken, that might be the last leg down.

Also, it is important to see the character of the move up and down. If the move up is impulsive which is what it looks like right now and the move down is corrective, that is also a bullish sign.

I’ll try to update again later today if time permits.

Asian Market Mid Week Review 10 Nov 2011

Singapore’s Straits Times Index and Hong Kong’s Hang Seng Index Mid Week Review

This review is for both the Singapore’s Straits Times Index as well as Hong Kong’s Hang Seng Index as both are moving in tandem and are closely coupled with the US Market.

I believe the S&P 500 sell down in the last session is just the beginning of further selling and it could go as low as 1040 from the current 1230 points. Please see the Review of S&P 500 for further details. Both the HSI as well as the STI are expected to follow as well. It is already evident from today’s sell down in this two indexes. Point to note though is that HSI stopped short of 19k which has been providing support and resistance recently. I had published a post titled Battle of 19k and take a look at that post for details of the importance of this level. If the HSI breaks this level to the down side, this could turn into a huge sell down and HSI could go as low as 15700 region. If the 19k holds, the up trend may continue for a while but not much longer. So the upside is very limited at current levels.

We are at a point where those who are bullish or are long term investors should remain cautious and probably reduce their holdings and be prepared to buy when the index is at a much lower level. Again I like to highlight that this is my view and not to be taken as investment advice and every investor should do their own analysis and make a decision based on their own risk profile.

I’ll be updating the 2-Year charts for these indexes when I get some time. Maybe over the weekend. So check back to get updated on that.

SGX Mid Week Review 09 Nov 2011

In the last post on SGX, I had mentioned that SGX seems to be in a Triangle for Minuette wave (b). That Triangle is likely to have completed today. The next move will be a move down to 6.30 (minimum) to 6.07 (maximum) region.

The volume in the Triangle phase was reducing drastically. I’m expecting the move down to be a swift and sharp sell down. The end of that sell down would be a fantastic buying opportunity to go long. But note that it is always very dangerous to pick the bottom and we do not want to be left catching falling knifes. So always practice prudent measures with proper cut loss strategy.

SGX EOD Elliott Wave Chart 09 Nov 2011