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.