STI closed at 3167. US stocks, star of the year. What about 2014?

We see another roller coaster ride by STI before the end of 2013.  Today STI closed at 3167.  Remember I said that “Down, down, down….I like it” and I highlighted a few trending pattern on the charting on 12 December (http://achua138.blogspot.sg/2013/12/down-down-downi-like-it.html).  I also posted a STI chart showing only one indicator which was the 2012 YEC and I mentioned to watch out for this number together with the December window dressing (http://achua138.blogspot.sg/2013/11/sti-watch-out-yec-and-window-dressing.html).  知己知彼。  This is how the game been played by those fund managers.    

Finally we come to the end of 2013.  We see a great performance on the US equities markets.  However for ASIA, beside Japan, countries like China, Hong Kong, Singapore…..were under performance.  Especially STI, it was one of the worst performance index amongst the ASIA indices.  What happened to STI? 

Over the past two years, we have seen numbers of “first time” incidents in 40 years that happened in Singapore.  Like the result for the two bi-elections, strike that happened earlier this year which involved bus drivers from China ……to the recent riot at Little India.  Our government acknowledged all these and take it very seriously.  We saw couples of actions being taken by the government.  Whether it is reforming or restructuring, the beginning is always tough and painful.  But if they do it right, in long term it will benefit the country as a whole.  China is also going through a crucial stage of restructing.  And that was why we see a similar situation happen to China equities markets too.    

So what about 2014?  Why I keep saying next year小心， 小心再小心。 Majority of the economists and analysts think that it will be a great year to both economic and stock market for 2014.  Half of the traders and investor see it differently.  So what about myself?  How I look at it?

When talk about stock market, I like to look at our “Big Brother” US DOW.  When it up, some might follow, some might not.  But when it sneeze, everyone feels the chill. 

Because of the tapering, we used to see good economic numbers as bad news and bad economic numbers as a piece of good news.  But today, we already know that the tapering will be kick off in January 2014.  So how do traders, investors, fund managers…….going to response to the December economic numbers which will be released over the next two weeks?  Look out on that. 

Next, watch out for March.   In history, US market from its lowest to its highest peak, the time frame were 5 years.  Global markets crashed in December 2007.  DOW free fall all the way down to 6400 in March 2009.  From March 2009 to March 2014, it is exactly 5 years.  To understand more, you may visit (http://achua138.blogspot.sg/2013/08/dow-close-to-5-years-bull.html).

If nothing happen to March, look out for May.  There is a curse “Sell in May and go away”.  Over the past 3 years, there wasn’t any exceptional case on this. 

What if nothing happen and the global equities markets blooming like sun flower…..all the way to June and everyone goes wild and crazy.  If that happen, you better put on your parachute before others do so.  We shall discuss about the second half when the day comes nearer. 

Today, DOW is trading at a PE ratio of 20 times.  It can be quite fragile.  Any bang on it could cause the glass to either crack or break.  Base on TA, whether I am looking at 6 months chart or 15 years charting, DOW has formed an Opera House pattern. 

January tapering is only the beginning of the game.  After this first round of tapering, what’s next?  This topic of tapering will be back again.  10 years US Treasury, now standing at 3%, commodities price will stay low for even, you think gold price has already bottom, you think properties price will stand firmly there with those governments cooling measures………….interest rate, inflation……. Game has just begun.   

Stock market move ahead of economic.  Stock, gold, currency, interest rate…….property, they are co-related with one and the other.  Today, the world is fill with “artificial sea of liquidity”.  With politics involvement, if the glass break, it can be worse than year 2008.  Major correction has not took place for quite sometimes.  So trade with care. 

Do not follow the crowd.  If you want to, make sure you get out earlier than anyone else.  And do not listen to others whether he is an economists, analysts ……or even Warren Buffett.  Do your own homework.  Lastly, monitor the fund movement.