As I mentioned, there shall be weekly updates on this site. There will be. Thank you, the readers.
The Singapore market has seen a little intra-day spike today, in line with the Dow and Hang Seng. The Nikkei seems like it is beginning to decouple however, there is no clear indication of that in the near term.
Blue chips that I have been watching on the local market have dipped significantly with counters like Kep Corp now under $11 and F&N in the $4.50 range. Popular Yangzijiang shipbuilder has fallen approximately 10% in the past few weeks.
The Fed's "hold" stance on Fed funds rate has caused a short live exuberance to the market until the realisation that required rate of return shall remain low or the time being. This has made equities less attractive in this inflationary environment.
Back to the market, today's little "tombstone" candlestick could well spell the death of optimism that started just yesterday. The near term can be expected to be down. However, considering the Singapore market's coupling with the US and regional markets, I would not consider revising my target of 2950 +/- 50. The DOW has reached it's March levels. Market sentiment there is negative but March's recession fears have been softened. Significantly further downside is unlikely. Japan has been doing better than Hong Kong and Singapore, a slight divergence has been noticed in the past month. Hong Kong has been moving very closely in line with the Singapore market which can be observed to be taking cues from the US.
I am currently watching for a bottom, buying spree.
Thursday 26 June 2008
Thursday 19 June 2008
Good news and Bad news
Good news for all who read this blog. I shall be maintaining my posts to at least 1 per week to provide readers with a weekly digest. More details later. Watch this space!
Bad news, the market does not seem to be doing well now, even though there was an early rally this week. It finished 47.43 points lower to 2992.66 falling into my target range of 2950 +/- 50. The RSI on the STI indicates possible bear market to follow. I am considering revising my target range downwards.
On the other hand, current sentiments, as seen from 5-day candle sticks indicate that there are sentiments keeping the market afloat in the very short term. This may cause the market to range in the short term when the bulls keep fighting the bears. Right now, the market is also in a sort of "wait-and-see" mode. This may further affirm the range phenomenon.
A strategy one can adopt now is to follow the "wait-and-see" mode. Afterall, we all hope to ride on a wave. Now, we can all wait for better weather before we set sail. However, those with a longer horizon and are not sensitive to short term fluctuations may want to take advantage of the low prices on certain counters.
Bad news, the market does not seem to be doing well now, even though there was an early rally this week. It finished 47.43 points lower to 2992.66 falling into my target range of 2950 +/- 50. The RSI on the STI indicates possible bear market to follow. I am considering revising my target range downwards.
On the other hand, current sentiments, as seen from 5-day candle sticks indicate that there are sentiments keeping the market afloat in the very short term. This may cause the market to range in the short term when the bulls keep fighting the bears. Right now, the market is also in a sort of "wait-and-see" mode. This may further affirm the range phenomenon.
A strategy one can adopt now is to follow the "wait-and-see" mode. Afterall, we all hope to ride on a wave. Now, we can all wait for better weather before we set sail. However, those with a longer horizon and are not sensitive to short term fluctuations may want to take advantage of the low prices on certain counters.
Thursday 12 June 2008
Trying times ahead
Our market opened 1.8% lower this morning and closed 0.9% down at 3020.15. The candle however, was a big white candle. Based on these two points, the market seems to be sparingly optimistic to a certain extent.
The very short term outlook however, is relatively bleak. With inflation hitting markets all over the world, sentiments on business for the rest of the year is gloomy. On the other hand, recession fears are not as strong as in March, from the fact that a slowing economy is not a contracting one.
With Fed rates expected to rise, the expectation on the market for return will rise in tandem. This will raise the bar on equities to cause rating downgrades in certain cases. My current outlook on the effects of this will be a slow recovery from the current dip which has yet to find its bottom.
Considering all the above factors, we can expect the next support of the STI to be lowered to about 2950 +/- 50. My reason for this is that with recession fears lifted while inflation fears persist, market value will fall close to March levels but not to March levels or below. Price inflation means that the PV of stocks, as compared to before, should be higher to reflect their old value. That can keep the market afloat at least in the near term.
As long as the hope of a late year rally still remains, there is no reason to fear a collapse. In fact, those who believe in it are likely to buy-and-hold in such a time and fulfill the prophesy.
The very short term outlook however, is relatively bleak. With inflation hitting markets all over the world, sentiments on business for the rest of the year is gloomy. On the other hand, recession fears are not as strong as in March, from the fact that a slowing economy is not a contracting one.
With Fed rates expected to rise, the expectation on the market for return will rise in tandem. This will raise the bar on equities to cause rating downgrades in certain cases. My current outlook on the effects of this will be a slow recovery from the current dip which has yet to find its bottom.
Considering all the above factors, we can expect the next support of the STI to be lowered to about 2950 +/- 50. My reason for this is that with recession fears lifted while inflation fears persist, market value will fall close to March levels but not to March levels or below. Price inflation means that the PV of stocks, as compared to before, should be higher to reflect their old value. That can keep the market afloat at least in the near term.
As long as the hope of a late year rally still remains, there is no reason to fear a collapse. In fact, those who believe in it are likely to buy-and-hold in such a time and fulfill the prophesy.
Tuesday 10 June 2008
Back in action
It has been about a month since I posted an entry.
The market has taken a turn and shed about 100 points in the past 2 days. Even though the outlook does not seem bright, in my opinion the support shall remain firm at 3000 +/- 50. Despite the coupling with tumbling Asian markets, there is no reason for the market here to fall far below this support considering the stabilising Dollar and rising US interest rates for the moment.
The short term outlook is that the market shall continue to range and the possibility of a late year rally still lingers. In such a time, it can be a wise strategy to go for yield or total return. Capital gain is difficult for the average retail investor who has limited resources to respond to short fluctuations. In a time like this, cheap buys can be picked up for late growth companies and mature companies. These picks offer stability and assurance in such times as well as decent dividends. A cheap buy can mean a decent capital gain on top of dividends.
Another way to reduce uncertainty is to go for index weights or buy into structured index linked products. However, this is only for those who have a longer time horizon in mind.
Think risk and return.
With US Fed rates about 4% and equity risk premium of 7% on average in the Singapore market, a decent return can be expected for now.
The market has taken a turn and shed about 100 points in the past 2 days. Even though the outlook does not seem bright, in my opinion the support shall remain firm at 3000 +/- 50. Despite the coupling with tumbling Asian markets, there is no reason for the market here to fall far below this support considering the stabilising Dollar and rising US interest rates for the moment.
The short term outlook is that the market shall continue to range and the possibility of a late year rally still lingers. In such a time, it can be a wise strategy to go for yield or total return. Capital gain is difficult for the average retail investor who has limited resources to respond to short fluctuations. In a time like this, cheap buys can be picked up for late growth companies and mature companies. These picks offer stability and assurance in such times as well as decent dividends. A cheap buy can mean a decent capital gain on top of dividends.
Another way to reduce uncertainty is to go for index weights or buy into structured index linked products. However, this is only for those who have a longer time horizon in mind.
Think risk and return.
With US Fed rates about 4% and equity risk premium of 7% on average in the Singapore market, a decent return can be expected for now.
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