Singapore Market

We have come to the end of 2008. It has been a turbulent year where trillions of dollars have evaporated in the world financial market.

Market has been pretty quiet for the past week with trading volume hitting historical low due to lack of market participation during the festive season.

Singapore market looks to be stuck in a trading range since hitting a low of 1473 established on 28 Oct 08. The FTSE STI index is now slightly below its 50 day moving average. The market tried to rally above its 50 day moving average and actually managed to close above it for 2 trading days on 18 and 19 Dec respectively. However, there was not enough strength to sustain the up move.

Looking at the charts, the trend is still negative at this point in time.

Oil Price

OPEC decided on Wednesday to reduce production by 2.2 million barrels a day in an effort to stop the trend of falling oil prices.

The aim of the move is to bring oil back to $70 to $80 per barrel. However oil price did not rally based on the decision. It was a typical buy on rumour sell on news trade.

The contract for New York's light sweet crude for delivery in January expired at 33.87 dollars a barrel, down 2.35 dollars from its Thursday close.

The contract dived to an intraday low of 32.40 dollars, a level last seen on February 9, 2004.

The New York contract for delivery in February, which becomes the market reference beginning Monday, finished 69 cents higher at 42.36 dollar.

Oil is still deep “Bearish” phase based on the phase chart of USO. It has stayed in “bearish” phase since 1 Oct 08. So sticking to the trend will mean that we should not be buying oil at this price level.

S&P500

US market closed higher on Wednesday with the S&P500 index ending at 899 points. S&P500 rebounded from a low of 741 (on 21 Nov 08) to a high of 918 (on 8 Dec 08), a 23% move in a span of 10 trading days.

The index is now about 20 points away from its 50 day moving average. If the index is not able to penetrate its 50 day moving average convincingly, then the downtrend will resume. Resistance is at 920 and 1000 points respectively.

The slope of the 50 day and 200 day moving average is still sloping downwards. If the slope of the 50 day moving average is able to turn up and the index is able to move above its moving average, then the chances of having a sustain recovery is stronger.

Let’s see how the index behaves in the next few weeks.

China Stock Market

Is China stock market on a recovery? Judging from the Shanghai Index performance, it looks likely that China stock market will stage a rebound given all the stimulus measures that the China Government has put in place.


The Shanghai Index is now very close to its 50 day moving average and on several occasions in Nov, the index actually went above its 50 day moving average.

The index seems to have bottomed out at 1664 which was the low set on 28 Oct 08.

Hong Kong Market

The Bear trend continues for the Hong Kong market. The Hang Seng Index is currently below its 50 day and 200 day moving average.

There is no end in sight for the world stock market. The number of countries slipping into recession is slowly increasing with Japan being the latest victim.

The Hang Seng Index slipped into Bear trend since 26 May 08. We are 120 trading days into the current down turn.

Bearish Oil

Oil continues to trade with a “bearish” bias. The USO chart shows that oil has been trading in “Bearish” phase since the beginning of October.

With the story of a slow down in economy together with strengthening of the US dollar, this bearish trend looks set to continue.

The chart shows a pivot point at $50.44. If price falls through this level, it will confirm the downtrend and price is likely to fall to the $42 region.

The 50 day moving average is now at $75 and 200 day moving average is at $88. These 2 levels form the resistance going forward.

USDCAD

The stock market turmoil continues this week with wild swings in Dow Jones Industrial Average becoming a daily event.

The CBOE Volatility Index went above 80 points this week, a sign of the fear that is gripping the market.

The current story in the market is oil price will not be able to stage a recovery since the global economy is slowing and demand of oil will drop. Next week we will see the OPEC meeting to discuss whether to cut oil production to stop the slide in oil price.

A direct impact of oil price decline is reflected in the Canadian currency. The USDCAD pair has been on an up move since early October. The USDCAD pair moved into “Bullish” phase on 30 Sep 08.

By being long in this trade, you are betting that USD will rise and CAD will fall. This scenario fits the current story in the market that USD will strengthen and as economy slows down, oil price will drop.

Singapore Market

What a difference a week makes. STI closed at 1948 points dropping a whopping 15% in a week.

The current down swing started on 4 Jun 08 when the index closed below its 50 day moving average after attempting to break out of the “Bearish” phase.

The situation seems to have spun out of control even after the US passed a USD $700 billion package that was supposed to bring relief to the financial system.

It is anybody’s guess whether the market will stage a fast or slow recovery. But as a trend investor, it is not advisable to buy into equity market at this point as the market is clearing stuck in bearish mode.

Hong Kong Market

The bailout package was finally approved by the US Congress on Friday. But it did not bring relief to the stock market.

The market sold down on the news and Dow closed down 157 points on Friday. There are still lots of fear in the market as indicated by CBOE Volatility Index. The market has moved from uncertainty of whether the bailout package will be approved to whether the bailout package can relieve the pain investors are experiencing.

The turmoil in the US market has caused pain to Hong Kong market as well. The phase chart is still showing a bearish bias.


The Hang Seng Index moved into Bearish mode on 26 May 08 and has stayed in Bearish phase for 90 trading days. It pays to trade with the trend.

US Market

We have an incredible market recovery thanks to a potential rescue package from the US regulators. The US government plans to restore calm to the financial system by rescuing banks from billions of dollars in bad debt.

A temporary ban on short selling of selected financial stocks likely added to the up move as traders cover their short position. All in, the Dow managed to rally 370 points to close at 11388.

The index is down just 0.3% this week. If not for all the effort by central banks around the world, the scenario would have been worst.

The index is still in “Bearish” territory and is resting at the 50 day moving average. Hopefully the rescue package can be approved next week to lend further support to the fragile market.

Singapore Market

The Singapore market ended the week at 2570. The US government intervention only managed to spur the market on Monday by 120 points and we are actually down 4 points for the week. Traders are using any rebound as a means to get out of the market which is not a good sign for the bulls.

The STI is still firmly in “Bear” territory. The market did try to climb out of the down trend but the moved ended on 4 Jun 08. The market has stayed in “Bear” phase for 72 consecutive trading days.

US officials have been working overtime this week to cook up something to help Lehman Brothers. Hopefully they can make it in time before the Asian market open on Monday.

US Financial Sector

It was another terrible week for the stock market. The Dow Jones Industrial Average hit a low of 11038 before recovering to end at 11220.

There was news that US Government are working out plans to help mortgage giants Fannie Mae and Freddie Mac and the plan may come out during the weekend. That news help Fannie Mae to rise 9.66% and Freddie Mac to rise 3.03% during the regular session. However, the aftermarket action suggests that both stocks will be hammered come Monday. Freddie Mac was down 20% aftermarket Fannie Mae was down 21% in aftermarket action.

The financial sector recovered on Friday. The XLF rose 3.62%. The XLF managed to stay above its 50 day moving average for the whole of this week. An incredible feat given that Dow was down 2.7% for the week.

The XLF is now in “Recovery” mode and it has been oscillating between “Bearish” and “Recovery” phase for the past few months. Unless it can overcome the 200 day moving average and moved to “Accumulation” phase, the advantage still goes to the Bears.

Gold Update

Price of commodities has soften a bit and gold has not been spared the downward move.

streetTRACKS Gold ETF has moved down from a its July high and is now below its 50 and 200 day moving average. It is currently in “Distribution” mode and looks like to move into “Bearish” phase.

It has stayed in “Distribution” mode for 14 days in a row, not a good sign for the Bulls.

Singapore Market

Congratulations to the Singapore Women’s Table Tennis Team for winning a Silver medal. The nation is rejoicing from the medal win but stock traders are experiencing a mood of a different kind.



The Singapore Market is going through a difficult patch for the Bulls. Trading volume has been on the decline and there are no signs that the market is going to rebound strongly anytime soon.

The phase chart is still showing a “Bearish” trend. Maybe when it comes to the last quarter, which is traditionally good for the stock market, the market will rebound. But at this moment, those who want to enter the market must trade with caution.

The 50 day moving average is at 2926 and 200 day moving average is at 3140.

US Market

Dow ended a volatile week on Friday. The index was up above 400 points for the week.

The phase chart is showing a recovery for the Dow since it moved into “Bearish” mode on 21 May 08. It closed above the 50 day moving average for the first time in 55 trading days. The 200 day moving average is now at 12512.

It is possible that this may be a false breakout but the “Bears” will definitely be on their toes this week to see if they need to cover their positions.

Shanghai Market

The Shanghai Market tested a low of 2566 on 3 July before rebounding to 2952 on 10 July. The index closed at 2801 on Friday. It looks likely to test its 50 day moving average which is at 2953.
The index is still in “Bearish” trend. If it can gather enough momentum to break the 50 day moving average, it will move into “Recovery” mode. The index entered “Bearish” mode on10 Mar 08 and has stayed in this mode for 99 trading days.

Let’s see whether the Olympics fever can help to propel the market higher next week.

Oil - Warning Phase

The current stock market is much dependent on the direction of oil prices. Higher oil prices increases the risk of higher inflation which is detrimental for stock market.

Crude oil prices has corrected from a high of $147 to $122 last night. That is a correction of around 17% in 2 weeks.




Looking at USO (US Oil Fund ETF), the price moved from $119 to $98 dollars in its recent down slide. The phase chart is showing warning signs having moved into “Warning” phase since 17 July 08. A similar pattern occurred in early January where the “Warning” phase lasted 11 trading days. The 200 day moving average for USO is at $86 dollars which is 12% below the current price.

STI Update

STI index is still in “Bearish” mode. The index closed at 2847 points, down from 2926 points.



The index fell into “Bearish” phase in the beginning of June and has now stayed in this mode for 32 trading days. The index is now near the low of 2746 established on 22 Jan 08.

The market is still in a down trend and it is not advisable to play the long side of the market.

The previous “Bear” attack lasted 51 days from 9 Jan 08 till 24 Mar 08. Let’s see how long this bear attack will last.

Shanghai Market Update

Shanghai market has corrected more than 50% from its peak of 6124 set in October 16 2007. The index closed at 2669 on Friday.

The index entered “Bearish” phase since 10 March 2008. The bulls tried to bring the index above its 50 day moving average in May but couldn’t gather enough strength to make a breakthrough.

The index is now clearly below its 50 and 200 day moving average.

Dow Update

We have another disastrous week for the US market. The Dow Jones Industrial Average was down. The index fell from a closed of 11842 last Friday to close at 11346. The index has broken the lows established on 22 Jan 2008.

What is next for the market? The picture looks gloomy. With the Federal Reserve done with cutting interest rates and possibility of increasing it to fight inflation, the catalyst will not be coming from the Fed. If we can see a crash in the prices for oil and commodities, that will spark a recovery in the stock market. But “Hope” doesn’t bring in the money. It is safer to trade with the trend.

The phase chart is showing a Bearish bias towards the market.


The index moved into “Bearish” phase on 21 May 08 and has stayed there for 27 trading days. The picture doesn’t look good for the Bulls.

US Technology Sector

US technology sector had a good day on Monday with the NASDAQ up 20.28 points. If you are confident of the US technology, you can invest in QQQQ which tracks the NASDAQ index.

The phase chart for QQQQ shows that it is now in “Accumulation” phase. The 50 day and 200 day moving average is about to make a crossover. When that happens, the QQQQ will be in “Bullish” mode.

Let’s see if this can take place this week.

Shanghai Market Update

Shanghai market was hammered 4 days in a row. It would have been 5 days in a row if not for public holiday on 9 Jun 08.

The market closed at 2868 points, down 461 points for the week.

The phase chart showed that the index moved into “Bearish” mode on 10 Mar 08 and the market has been facing selling pressure ever since.

The rebound from the 22 Apr 08 low of 2990 faced a big resistance at the 50 day moving average and the index has now fallen below critical support.


The market has stayed in Bearish mode for about 99 trading days. With the Dow rising 165 points on Friday, Shanghai market should see buyers on Monday. But the trend is still favouring the Bears.

STI Update

STI is suffering from another round of Bear attack. The index is now back to “Bearish” phase.

The index has stayed in “Bearish” mode for 5 trading days now. Let’s hope it can move out of “Bearish” mode soon.

The index is now below both the 50 day and 200 day moving average of 3154 and 3303 respectively.

STI Update

STI closed at 3192 on Friday, up 70 points for the week.




The 50 day moving average is increasing, that is a good sign for Bullish investors. The index has been in “Recovery” mode since 25 Mar 2008, a total of 47 trading days.

The index is now between the 200 day moving average of 3308 and 50 day moving average of 3126. The longer the index stays above its 50 day moving average indicates that the bears are losing strength and are not able to move the index below its 50 day moving average.

However, in order for the Bulls to declare victory, it will have to climb above its 200 day moving average.

So long as the 50 day moving average can keep its upward momentum, the index is likely to move to “Accumulation” mode soon.

US Financial Sector Update

Dow Jones closed at 12479, down 145 points. Not a good sign for the Bulls. For the week, Dow dropped by 507 points. It looks to have formed a double top and is now below its 50 day moving average of 12642.

The weakening of the index is mainly due to high oil prices which is causing inflation worries all over the world. It is also likely that the FED will stop its rate cut measures giving investors less excuse to buy into the market.

The phase chart of the iShares Dow Jones US Financial Sector fund (Symbol: IYF) is back into “Bearish” phase. It stayed in “Recover” mode for 18 trading days but could not gather enough momentum to move to “Accumulation” phase.



Let’s hope the March lows can hold water. If not it will be bad times ahead for the Bulls again.