STI - Watch out the YEC and window dressing

STI was weak as compare to the others

US market:-

Since Monday, DOW has been kept trying to break 16,000. 

 

Thursday, we heard the news on Janet Yellen is closer to become the next head of the US Federal Reserve after her nomination was approved by US Senate banking committee.  And her appointment is likely to be approved by the full Senate, which is Democrat-controlled.  The news sent DOW broke 16,000 and closed at 16,064 on Friday.  S&P also broke 1800 and closed at 1804 on Friday. 

 

Some economists and analysts are saying that DOW could go to 20,000.  I am not convince with the number.  August, I predicted DOW will hit 16,000 by end of this year.  This time, base on my calculation, I am more likely to look at 16400 as the next resistant level. 

 

Base on TA, I see a divergence on DOW and S&P.  MACD and Stochastic showing over bought.  Can DOW and S&P stand above 16000 and 1800 for 5 to 10 days?  Let’s see.  Take note that this week US has only 3.5 trading days. 

 

ASIA:-
I see 1 plus 2 long white bars and then follow by a 4 days consolidation for the Shanghai index.  The next resistant for Shanghai index is 2240 and 2270. 

Hang Seng had a double gap up and touched 23875 resistant with a retracement.  Hang Seng needs to break this resistant before we look at the next resistant at 24400. 

Nikkei 225.  It is a very unit index.  We need to monitor closely on "yen" to trade the Nikkei.  It gap up, broke the triangle, followed by a retracement and advance further.  15950 to 16000, that is like a high voltage electrical wire.  Watch out on that.

 

 

STI:-
There are numbers of STI stock which fall in box trending, triangle, support level and divergence.  Like Wilmar and Golden Agri, we see great movement on these 2 counter, but I am a bit concern as it has a divergence.  

The trading value for STI is pretty low.  Recent Asiasons, Blumont and LionGold hurt quite a number of traders/investors.  December holiday plus recent internet trading value control, traders were not so willing to pump in more fund into Singapore equity market. 

Therefore, STI is rather weak as compare to the others.  3200 has become a resistant for STI.  On Thursday, it gap down and broke the triangle.  Luckily, 3160 had shown a strong support for the STI. Now, I see 2 similar length hammers formed at the 3160 support level.  Can these 2 hammers revert the trending?  We need a CS confirmation.  Watch out on that.  

 

M1

Noble

Noble dropped from 1.08 to 1.015 (6%) after the released on its poor third quarter report.  However, an hour before the market close, we saw a huge buying, pushing the price up and closed at 1.05.  The next 2 days, we saw low selling volume.  In other word, big fishes are supporting this counter.  Now is near to its 1.025 support. 

Recently commodity stocks are moving.  Just like Golden and Indo Agri, went up even with a poor third quarter reports 

 

Stock Market is directionless?

A lots of traders, economists and analysts warned everyone to stay out, the stock market was directionless.  To me, I see some great movements over the past 2 weeks.  Just look at STI, broke 3200, came down and touched 3160 support and last Friday closed just above 3200. 

 

STI

Second week of October to end October, STI went up from 3120 to 3230 resistant.  Although index were up but if we look at TA, volume was low, 85% of CS were black candle sticks over that past 3 weeks.  That worried everyone.  Because of that, I kept saying market needs a pull back/retracement.  Finally, it happened.  Beginning of November, STI came down from 3230 to 3160 support.  Although STI came down, but again I looked at the volume, it was low.  In other word, it tells me that the big fishes were not getting out.  Since they were not getting out, why must I.  Just be alert and trade with care.  Last Thursday and Friday something happened to US and STI went back above 3200.

 

Today, if we look at the charting, STI formed a triangle.  Second week of October, STI formed an inverted head and shoulder.  As long as STI doesn't fall below 3120, the inverted head and shoulder is still valid.  But then on the other hand, STI recently also formed a head and shoulder.

 

US market

I see some retracement plus little consolidation in DOW.  Its broke record high one after the other.  Especially after Janet Yellen, the nominee chairmen of the next Federal Reserve, said that the central bank should take care not to withdraw stimulus too early.  It's important not to remove support, especially when the recovery is fragile and the tools available to monetary policy, should the economy falter, are limited given that short interest rates are zero.  Her statement shake the global equities market.  It seem like this lady works like Ben Bernanke. 

 

The charting now, show a step ladder on the recently up trend.  Last Friday, Marubouzu white showed up.  This Marubouzu white can be a double headed sword especially it appeared at that high level.   

 

China

Third Plenary Session had ended.  Immediately next day after the session end, China market plunged close to 2%.  Economists and analysts said that they were disappointed with the Third Plenary Session meeting outcome.  The detail has not out yet, but all these economists and analysts started to condemn the whole things.  Gentlemen, as a trader, I need to know how all these institutions, big fishes......how they trade.  Push down the price, hit the support, go in and buy.  Buy low sell high!

 

Analysis / Things to watch out

Dow - watch out for the next 2 days candle sticks plus 5 to 10 days movement/price action.

China -  more detail on the Third Plenary Session will be out soon.

STI - The next 2 week is a critical week for STI.  I would like to see STI broke 3230 to get away from the recent head and shoulder.  

Nothing goes wrong, DOW should be heading 16000 as I mentioned on 15-August.  China and Hang Seng should be interesting.  STI should break 3230 and toward it next resistant at 3250 and the next one 3280. 

Whatever it is, trade with care.  Today market is mend for trade.  Before you buy any counter, make sure you know and have a stop loss with you at all time. 

   

 

DOW Wednesday broke record high, Thursday down 153 point, then Friday up 168 point, can your heart take it?

DOW broke history high on Wednesday.  Down 153 point on Thursday.  Then up 168 point on Friday, crossed the previous (Wed) high.   How about it?  Can your heart take it? 

Since I started this blog in August, I mentioned that today equities market is mend for trade rather than invest, put on your belt and be prepare to ride on roller coaster.  June, the first correction for the DOW.  Then followed by August and then mid September.  Rewind back the past 5 months trending for DOW.  Do you realise something similar?  The pattern on how it went up and came down.  Yes, DOW 怎么样上 就怎么样下。That's why I said that last week "The pattern that DOW moved up plus its trading volume is not in favour.  It needs a retracement with consolidation.

This few days, traders are watching closely on China Third Plenary Session.  The outcome will affect the China and Hang Seng markets.  While we are waiting for the outcome, let's look at some of the economic data and politics action over the past one week. 

China:-

• Third quarter GDP 7.8% versus 7.5% in second quarter.
• Manufacturing PMI rose to 51.4 in October from 51.1 in September.
• Non-manufacturing PMI rose to 56.3 in October from 55.4 in September.
• Industrial output rose 10.3% in October from a year earlier, beating market expectation.
• Retail sales up 13.3% in October.
• Exports rose 5.6% from a year earlier, while imports jumped 7.6%
• Real estate investment rose 19.2% in the first ten months of 2013 from the same period a year earlier.
• CPI accelerated slightly to 3.2% in October which led by higher food prices.
• China needs o sustain an economic growth of 7.2% to ensure a stable job market, Premier Li Keqiang made this remarks on last Tuesday "We want to stabilize economic growth because we need to guarantee employment essentially." 

US:-

• Third quarter GDP 2.8% versus 2.5% in second quarter.
• ISM Manufacturing PMI rose to 56.4 in October from 56.2 in September.
• ISM Non Manufacturing PMI rose to 55.4 in October from 54.4 in September.
• Unemployment claims last week 336K versus 345K in previous week.
• Unemployment rate up by 0.1% to 7.3% in October.
• Non Farm employment change 204K versus 163K in September.
• FED Chairman Ben Bernanke said on Friday that there was still an "awful lot of slack" in the US labour market, but cautioned that economic data did not do a good job of providing an accurate measure.

Europe:-

• Eurozone factory order rose for a fourth consecutive in October with a Manufacturing PMI of 51.3 in October, up from 51.1 in Spetember.  Only France and Greece, out of the 17 countries that use the euro, failed to enjoy improved condition. 
• S&P down grades France rating from AA+ to AA

Analysis:

• China will not go back to double digit growth.  The Third Plenary Session meeting should be on economic reform, rather than economic planning.  Therefore, I am expecting to see some announcement from the central government exercise about price control and policy on banking sector.  Chinese parents are concern about the housing price in China.  Their worry and concern are similar to us.  Can their children afford to purchase a housing if estate price keeps going up. 
• As long as tapering date is not confirm, the roller coaster ride will always be there.  Traders will make use on whatever possible news and data to push the index high and low.   Therefore trade with care.  Know the S/R lines before you get in to the market.
• Europe is improving but all those outstanding issues are still there.  Watch them closely. 
• Last but not least, Middle East which has been quiet for quite a while.  Watch out for them as well. 

Happy trading.  As what I keep reminding myself  - do not be a goal keeper, catching stocks/counters that the professional traders and investors release.  Also trade with care.
 

DOW, Hang Seng, China Market and STI

On 10-October, I mentioned that DOW is a side way market.  Ranging from 15700 to 14760 / 14650.  18 to 20-October, I said to watch out for Shanghai and Hang Seng index which were approaching its resistant level of 2270 and 23650 respectively.  I also mentioned that STI shouldn't have a problem to cross 3200.  But 3230 will be a resistant to STI.  My warning and analysis turned out to be correct. 

See how powerful is the support and resistant.  When I was working, my colleagues used to ask me "can I buy this stock?"  Instead of telling them the answer, I asked them back "what is the S/R lines for this counter?"  A lot of retailer buy that particular stock because they heard someone telling them this is a good stock and that it can go up to certain price range.  And a lot time retailer buy at near its resistant level.  This is very dangerous.  Do not be a goal keeper, catching stocks/counters that the professional traders and investors release.  I mentioned this many times. 

Knowing the S/R lines is the first basic thing that a trader needs to know before he buy any particular stock/counter.  And it is also the first basic TA that he needs to learn before he goes into trend, triangle, hammer......and so on. 

The pattern that DOW moved up plus its trading volume is not in favour.  Its needs a retracement with consolidation.  Hang Seng, is going to test it 23650 again.  When?  Let's look at the other index/market.  Shanghai or I so called China market is waiting for its Third Plenary Session which will be held on 9 to 12 of November.  Economists and analysts have high hope on this.  Hopefully Chinese Communist Party and the People's Central Bank won't upset anyone, otherwise the market may...........so watch out on how its market move on this coming week.  If nothing goes wrong and things will smooth, STI should break 3230. 

Back to US.  US Fed will be having another meeting in somewhere mid of December.  This meeting may be the last meeting for Ben Bernanke.  Watch out for this as well.  Will there be any announcement by him regarding tapering since he was the one who initiated QE. 

Happy Trading.