Strong gains - a Sign of Relief?

The STI gained a good 102.88 points today after gapping up by 52 points at the start of the day and having an additional boost after 5pm. Could this be a sign of relief for the Singapore market in what is perceived as gloomy days ahead?

STI chart for the last 2 years looks like a classic Elliot wave - 3 distinct upswings between June 2006 and November 2007 and down swings after. Considering the "bear" sentiment from end of 2007, the wave can be expected to reverse direction in a series of downswings, which is what is happening now. From November 2007 to February 2008, the STI charts show 2 distinct "humps" on the downswings and a little "bump" between February and now. These can be considered corrections to the "bear market". The "humps" are clear corrects but what the "bump" suggests has yet to be confirmed. While generally pessimistic news looms around the stock markets for the moment, it is unlikely that todays gains signify a turning point. On the other hand, todays gains may in the longer term future become a part of the third "hump", which signifies a ride to the bottom.

At this point, I would like to point out that this website seeks to provide day-to-day analysis of the Singapore market and insights for the common people, you and me who have no foothold on the inside but make do with as much information and knowledge we can obtain. Every evening, I shall share my analysis of the day and anticipations for the next day.

Now for the anticipations for the next day...

Intra-day candle sticks today show that the market is relatively upbeat for the moment considering the large white candles that scatter throughout the day. The last candle stick was a white stub. In total, today's movement has resulted in a large white candle with no wick on either side. Looking at the candlesticks for the last 3 months, what we can expect tomorrow to be a little stub for the day and a series of dark days to come. Further, considering the candles of past 3 months, the top of the short upswing should be between 2900 to 3000 points. Today's 2927.79 is already within range.

Verdict:
BUY or SELL, you decide (it really depends on what you BUY or SELL). For value investors, you may wish to wait a bit longer before you decide to pick up something.