The market finished up 26.36 points to close at 3181.92 after a relatively gradual climb from its morning low of 3125.70. The bulls seem to have quickly overcome the bears from today's "tick-like" intra-day movement.
A note on current sentiments in the media, today's front page of the Business Times has an article on "A 'V-shaped' Recovery". Analysts are thinking otherwise that this could be a rebound in a bear market. For general information, the charts that represent "V-shaped" recovery and technical rebound differ in the time scale (and hence the gradient of the swing). Currently, it is hard to tell as the phenomenon is just starting.
Another notable point is that "V-shaped" recoveries that recur end up in range markets. Just go to any good chart provider and look at charts in general. You'll see that bull market upswings are less "V" until the later stages. In the later stages when rebounds look "V", the later finish tends to be higher than the previous peak hence, showing the up-trend.
Outlook in the next few days is rather uncertain even though current trends are indicating further upside. By stance on the markets remain.
Those trying to recoup or cut losses in the previous downswing can look forward to an exit point soon. This may sound foolish. However, from a risk management point of view, you did rather take a small loss and cut your risks considerably than a keep your stakes high in an uncertain market. Your expected return for the moment may be greater by doing the former.
Monday, 7 April 2008
Friday, 4 April 2008
White Knights meet a Black Bird
Today's title sounds crude. Well, sensationalism is what makes writing interesting.
The white candles in the past 3 days have been overcome by a black one. No fret. The market looks like it is going to have good upside in the short term. Congratulations to those who bought in the upswing in the previous days to take advantage of the panic or better, at the bottom about a month ago.
The market took a turn today going down in 2 large swings. Sellers overwhelmed the buyers later in the day to cause the lower finish. Heavy weights like the banks have seen good upside in the pass few days. It is no wonder that a "sell spell" is being cast. Today's black bird is probably the result of reluctance to buy in a time of uncertainty. The general outlook remains bleak, with the US likely to declare H1 shrinkage.
Back to longer term charts, the 2-year STI chart shows an interesting twist. The market seems to have began trading in a range phenomenon. Thus, I upgrade my next 2-month outlook from "Bear" to "Range". Closer scrutiny shows a good chance of range market behaviour between 3400points to 2800points. I shall keep to 1 or 2 significant figures as higher precision, to me, makes no sense. How can anyone estimate a peak or bottom to such precision? Market sentiment changes and it is not surprising that even professional analysts change their stance frequently.
Keeping the current range outlook in mind, I foresee more potential upside in the Singapore market. I would expect to trigger my "stop-loss" measures in the coming weeks and wait for the next low to pick up stock. The rationale here is trading ups. Greater risk takers can try short positions on the dip. A very important point to note is, that shorting is much more advanced technique. I suggest we leave it to the pros.
The white candles in the past 3 days have been overcome by a black one. No fret. The market looks like it is going to have good upside in the short term. Congratulations to those who bought in the upswing in the previous days to take advantage of the panic or better, at the bottom about a month ago.
The market took a turn today going down in 2 large swings. Sellers overwhelmed the buyers later in the day to cause the lower finish. Heavy weights like the banks have seen good upside in the pass few days. It is no wonder that a "sell spell" is being cast. Today's black bird is probably the result of reluctance to buy in a time of uncertainty. The general outlook remains bleak, with the US likely to declare H1 shrinkage.
Back to longer term charts, the 2-year STI chart shows an interesting twist. The market seems to have began trading in a range phenomenon. Thus, I upgrade my next 2-month outlook from "Bear" to "Range". Closer scrutiny shows a good chance of range market behaviour between 3400points to 2800points. I shall keep to 1 or 2 significant figures as higher precision, to me, makes no sense. How can anyone estimate a peak or bottom to such precision? Market sentiment changes and it is not surprising that even professional analysts change their stance frequently.
Keeping the current range outlook in mind, I foresee more potential upside in the Singapore market. I would expect to trigger my "stop-loss" measures in the coming weeks and wait for the next low to pick up stock. The rationale here is trading ups. Greater risk takers can try short positions on the dip. A very important point to note is, that shorting is much more advanced technique. I suggest we leave it to the pros.
What it should have been
What it should have been...
First, I would like to make a correction on the past 2 entries. The opening values of the 1st and 2nd of April, that I have stated on those days, may not be accurate. Reading the 3-month candlesticks on Yahoo Finance reveals that the candle bodies are longer than I quoted. This is due to the lower opening values. I am puzzled why the "Open" value is quoted as such. Anyway, just to share with everyone to be more careful when reading such open-source statistics.
Another weird thing about Yahoo Finance is its "Index Value" and "Trading Time". These 2 may correspond to each other but they don't correspond to the actual day. Please be careful.
Now for the analysis of today...
The market showed strong gains on Thursday, going up by 46.94 points in a choppy session. Nonetheless, there seems to be promise of the market going higher these few days.
Considering the oversight I made on the opening values earlier, the outlook, in the short run of the next few trading days, is not as bleak as previously expected. However, in the longer run of the next 2 months or so, I am still with the Bears. The basis for this is that, on the fundamental front, more businesses are less confident of meeting their targets this year. This translates into a less favourable market sentiment. Moreover, the likelihood of the US declaring a recession due to 2 consecutive periods of negative growth remains probable. This may further lower expectations.
One can proceed with "stop-loss" measures in the coming days. Trigger them when the roller coaster starts to tip over. However, don't forget to keep watch of your "stop-loss" targets and move them incrementally to maximise gains. Going into cash is safer for the moment despite rising consumer prices.
First, I would like to make a correction on the past 2 entries. The opening values of the 1st and 2nd of April, that I have stated on those days, may not be accurate. Reading the 3-month candlesticks on Yahoo Finance reveals that the candle bodies are longer than I quoted. This is due to the lower opening values. I am puzzled why the "Open" value is quoted as such. Anyway, just to share with everyone to be more careful when reading such open-source statistics.
Another weird thing about Yahoo Finance is its "Index Value" and "Trading Time". These 2 may correspond to each other but they don't correspond to the actual day. Please be careful.
Now for the analysis of today...
The market showed strong gains on Thursday, going up by 46.94 points in a choppy session. Nonetheless, there seems to be promise of the market going higher these few days.
Considering the oversight I made on the opening values earlier, the outlook, in the short run of the next few trading days, is not as bleak as previously expected. However, in the longer run of the next 2 months or so, I am still with the Bears. The basis for this is that, on the fundamental front, more businesses are less confident of meeting their targets this year. This translates into a less favourable market sentiment. Moreover, the likelihood of the US declaring a recession due to 2 consecutive periods of negative growth remains probable. This may further lower expectations.
One can proceed with "stop-loss" measures in the coming days. Trigger them when the roller coaster starts to tip over. However, don't forget to keep watch of your "stop-loss" targets and move them incrementally to maximise gains. Going into cash is safer for the moment despite rising consumer prices.
Thursday, 3 April 2008
Long-legged Doji
The market gapped higher in its opening on Tuesday at 3123.35 and closed at 3124.61. The intra-day high was 3130.39 and the low was 3112.39. This made a 1.26 point white stubby candle with a 10.96 point leg and a 5.78 point top wick - a long-legged Doji.
In candlestick analysis, the market has lost its direction. The bulls were winning most of the day countered by short but deadly bear-slams. Kind of like the bear being poked in the bum and turning around to pin the bull down only to have the bull making a comeback and starting all over again.
I have no change in my forecast of an imminent downtrend approaching soon. RSI (Relative Strength Index) shows that the market is possibly going to turn around and either range or go lower, in the mid-term. Fibonacci retracement ratios indicate a similar trend.
So far, 3 techniques of vastly different basis agree with one another. We should get the message.
In candlestick analysis, the market has lost its direction. The bulls were winning most of the day countered by short but deadly bear-slams. Kind of like the bear being poked in the bum and turning around to pin the bull down only to have the bull making a comeback and starting all over again.
I have no change in my forecast of an imminent downtrend approaching soon. RSI (Relative Strength Index) shows that the market is possibly going to turn around and either range or go lower, in the mid-term. Fibonacci retracement ratios indicate a similar trend.
So far, 3 techniques of vastly different basis agree with one another. We should get the message.
Tuesday, 1 April 2008
False Impressions
The market opened a little higher as expected and closed in what is called, a "Hanging Man". Even though it closed higher, climbing all the way up from under 3000 points during lunch-time, the "Hanging Man" is a bad sign especially when it appears after an engulfing dark cloud yesterday. Like a ghostly figure in the air, the "Hanging Man" is a signal that the reversal is near.
The bears are gaining control of the market. We saw it crash at mid-day and fortunately climbing all the way back up from 3pm. This could be due to buy-backs to stablise the market. Even though buy-backs work for large investors of particular counters and company treasuries trying to kept the price afloat, it generally does have a lasting effect on the general market.
Today's, "Hanging Man" was a small stubby white candle with a long bottom wick. Some may think it is a "Hammer" but "Hammers" appear at downswings. In this case, the market was up these few days and so this little candle is a "Hanging Man". The last 2 "Hanging Men" appeared in October 2007 and December 2007. These were around the pinnacles of the the previous peaks. However, due to the fluctuations at the peaks, the market did not crash immediately the day after appearance the "Hanging Men".
On the above basis, it is rather hard to tell what is going to happen tomorrow. There is a likelihood of the market opening up or down and there is likelihood of it closing higher or lower. Regardless of which, the idea is to cash out soon before the big dip. You did rather take a small loss than a bigger one.
The bears are gaining control of the market. We saw it crash at mid-day and fortunately climbing all the way back up from 3pm. This could be due to buy-backs to stablise the market. Even though buy-backs work for large investors of particular counters and company treasuries trying to kept the price afloat, it generally does have a lasting effect on the general market.
Today's, "Hanging Man" was a small stubby white candle with a long bottom wick. Some may think it is a "Hammer" but "Hammers" appear at downswings. In this case, the market was up these few days and so this little candle is a "Hanging Man". The last 2 "Hanging Men" appeared in October 2007 and December 2007. These were around the pinnacles of the the previous peaks. However, due to the fluctuations at the peaks, the market did not crash immediately the day after appearance the "Hanging Men".
On the above basis, it is rather hard to tell what is going to happen tomorrow. There is a likelihood of the market opening up or down and there is likelihood of it closing higher or lower. Regardless of which, the idea is to cash out soon before the big dip. You did rather take a small loss than a bigger one.
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