Trend Analysis

STI In Bearish Mode

2011-11-20T12:26:00.002+08:00

STI closed below its 50 day moving average on Friday. The market has been trying to stay on the recovery path but Friday’s bearish move proved to be too strong for the market to resist. The 50 day moving average closed below it’s 50 day moving average for this first time since late Oct when the market made its recovery move.

The stock market is being pressured by fears in Europe. The Spanish 10 year government bond yield hit a high of 6.75% and France is trying to hold on to its AAA credit rating. Germany is now seen as the only safe haven in the eurozone.

The phase chart is painting a bearish picture. The next support level is near 2700 level.

STI Weakness To Continue

2011-08-14T11:57:00.002+08:00

STI closed with a gain of 54 points on Friday. For the week, the index was down 144 points. The carnage started due to a downside of US debt. Traders used it as an excuse to take money off the table. The index went decisively below its 200 day moving average, moving the index into bearish phase.

Looking at the daily chart, the market is still in bearish trend. Although there may be a rebound in the short term, the 50 day and 200 day moving average will serve as resistance level. Usually when market drops with such big volume, it will not be able to move above its 50 day and 200 day moving average during the first test. So expect the market to move down again after the rebound loses its momentum.

Hang Seng Bearish Mode

2011-07-09T12:24:00.001+08:00

Hang Seng Index broke into “Bearish” territory since 21 Jun when the 50 day moving average made a bearish crossover with its 200 day moving average. The index has managed to stage a rebound together with the global stock market. However, traders were not able to push the index above its 50 day moving average and the inverted hammer candlestick pattern seems to warn that selling will resume in the coming weeks.

With the US market releasing job numbers that were below estimate, next week will be tough for the market.

Oil In "Warning" Phase

2011-05-15T18:39:00.002+08:00

It has been a roller coaster ride for commodities prices for the past few weeks. Silver had a sharp correction and that was followed by Gold and Oil prices.

The phase chart for oil is now in “Warning” phase. Looking at the phase chart, the price of oil dipped into “Warning” phase back in Nov 2010 and Jan 2011. These dips proved to be a buying opportunity with the bulls buying strength pushing the chart into a new high.

The 50 day moving average now serves as a resistance level. Looking at the charts, the drop this time looks to be more severe then the previous two instances when the price dipped below its 50 day moving average. I will be more cautious this time and wait for the test of its 200 day moving average before jumping to any conclusion.

Shanghai Market In Bullish Mode

2011-04-10T16:05:00.001+08:00

Shanghai stock index is showing strength as it clears the 3000 resistance level. This break brings the upside to 3100 which is very near it’s closing on Friday.

Support appears to be at 2940. The phase chart shows clearly that the uptrend is still intact. Although the index moved into “Distribution” territory in late January 2011, the index managed to recover quickly and made its way back to “Bullish” phase. The phase chart has been in “Bullish” phase since 10 Feb 2011.

STI In Distribution Stage

2011-03-06T12:56:00.001+08:00

Singapore market staged a rebound on Friday following a rally in US on Thursday. However with US indexes dropping again on Friday, it will face selling pressure again on Monday.

The phase chart is telling investors to be careful as the market is now in “Distribution” stage. The STI index is now facing resistance at its 200 day moving average. The rebound seems to be a bear market move with momentum indicators painting a negative picture.

Note that the STI has broken its double top formation and this indicates a potential for the index to drop to the 2900 region.

As the phase indicator is showing that the market is in distribution phase, it will be wise to step aside and wait for the dust to clear before going into the market.

Shanghai In Distribution Mode

2011-01-23T15:37:00.001+08:00

Shanghai market broke its 200 day moving average this week, moving into “Distribution” phase. Inflation is a big concern in China and it is using every means possible to keep inflation in check. This is putting pressure on the stock market as monetary tightening tends to hurt corporate earnings and put a brake on the economy.

The market regained 2700 level on Friday but in order to negate the bearish view, the index needs to break the down trend channel line which is at 2800 level. A break below 2700 gives a target of 2580 which acts as a support for this market.

The trend for the market is now in “Distribution” stage and it will move to “Bearish” phase if the 50 day moving average moves below its 200 day moving average. All eyes will be on the market next week to see whether the index is able to hold above its support level.

STI Up Trend To Continue

2011-01-01T20:21:00.001+08:00

Singapore stock market staged a strong recovery in 2010. The STI index is up 10% year on year with the index moving from 2897.62 on 31 Dec 09 to 3190.04 on 31 Dec 10. With 2010 behind us, where is STI heading?

The phase chart is suggesting continuation of the current up trend. The index is now near its 50 day moving average. The 200 day moving average is still rising with a positive slope meaning that the long term trend is still intact. The support level is at 3100 level and resistance is at 3220 level. The index looked to be forming a head and shoulder pattern but the index was above to rebound near its neckline. The index now has to go above 3200 level to break the current trading range of 3100 to 3220. Once this resistance is cleared, the next resistance is at 3300 level. In the mean time, the bulls should have the upper hand. Remember the trend is your friend, and that friend is pointing to further upward momentum. Happy 2011!

STI In Warning Phase

2010-12-19T16:27:00.002+08:00

2010 is coming to a close. It has been a great year for the Singapore stock market with the index beginning the year at 2897. We are now above the 3000 level with the index slightly below its 50 day moving average. This puts the STI index in “Warning” phase.

The index is looking like it is forming the right shoulder of a head-and-shoulder top formation. The neckline for this pattern is between 3100 to 3120 levels.

The index has to move quickly above its 50 day moving average. Doing so will negate the head-and-shoulder pattern.

The index has been losing momentum and market participation has dwindled to a low due to the holiday season. Support is at 3100 to 3120 levels.

Hang Seng Warning Signs

2010-11-28T12:04:00.001+08:00

Hang Seng Index broke its 50 day moving average support line this week, moving the index into “Warning” phase.

The index appears to be forming a top that looks like a head and shoulders pattern top. The neckline for this pattern is at 23,000 which serve as support level. In the event that this support cannot hold the selling pressure, we are looking at a minimum downside target of 21,000.

More than US$3 billion worth of proposed IPOs in Hong Kong were deferred. This signals that the equity market may have peaked for the year.

The warning sign for further weakness has appeared and traders need to listen to the market in order to avoid being burnt by the down swing.

GBPUSD Continues Bullish Trend

2010-11-04T10:44:00.002+08:00

The FED has announced that It intends to purchase a further $600 billion of longer-term Treasury securities by the end of the second quarter of 2011. With the news out of the way, what is next for the US dollars?

The GBP recovered from a test of its 50 day moving average and it is now testing the 1.61 level. The phase chart for GBPUSD is clearly in “Bullish” mode and the momentum may help to push GBP higher against the USD.

The next resistance for the currency pair is at 1.64 and looking at the technical charts, we may soon get there.

GBPUSD Still In Bullish Mode

2010-10-19T17:02:00.002+08:00

GBPUSD pullback after breaching 1.60 level. The current phase chart indicates that the currency pair is still in “Bullish” mode. The 50 day moving average is around 1.58 level and this serves as the support level. If the price is above to go above 1.60 level again, it will be a very good sign for the bulls.

EURUSD is in bullish mode

2010-10-17T09:51:00.003+08:00

The currency war has started. US started the ball rolling by injecting liquidity into the market. Just as the problem gambler that blames the casino for his losses, the US is blaming the world for its excessive spending.

The likelihood of further quantitative easing in US caused the US dollar to plunge in value. The EURUSD pierced through the 1.41 level on Friday before easing to 1.39 level.

The phase chart shows that EURUSD is currently in “Bullish” phase. The 50 day and 200 day moving made a golden cross on 4 Oct and the currency pair never looked back. Any pullback has been met with more buying as investors who missed the early moves placed their bets for further gains.

The next resistance for EURUSD is at 1.4216. Support is at 1.3300 level.

Dow In Accumulation Mode

2010-09-21T17:06:00.002+08:00

Dow managed another triple digit gain last night. The phase chart is indicating “Accumulation” phase with the index now above its 50 day and 200 day moving average respectively.

All eyes will be on the FED. Although the FED is widely expected to leave the rate at current levels, investors will be digesting the FOMC statement to give clues as to where the FED policy might be headed.

The trend is certainly positive at this stage and if the market can maintain its momentum, the 50 day moving average will be set to move above its 200 day moving average, giving what we call a golden cross. That will be good news for the bulls.

S&P500 In Recovery Phase

2010-09-05T12:48:00.001+08:00

S&P500 moved back above its 50 day moving average thanks to market strength for the past few days. Initial US jobless claims that were less than expected drove market higher. However there are a number of downside risks and the economy remains fragile at this stage. There seems to be a lack of business, consumer and investor confidence that is needed to push the market higher. Credit growth in the US is still declining and that is limiting economic growth.

The phase chart has endured a bearish attack with the index now in “Recover” phase. The next resistance is at the 200 day moving average at 1115. The index does not seem to have enough momentum to clear its 200 day moving average. The market is likely to trade within range of 1020 and 1120 for the time being

Shanghai In Wide Trading Range

2010-08-22T13:53:00.001+08:00

China officially became the world’s No 2 economy surpassing Japan. China has been relying on low wage cost to serve as the factory of the world to boost its exports. However the advantage of a low wage structure is diminishing and China itself is facing competition from other low wage countries.

The next chapter of expansion will depend on whether domestic consumption is able to propel the economy to greater heights. With the population in China, China’s domestic market is something that global companies cannot afford to ignore.

The Shanghai stock index is in a wide trading range between 2580 and 2680. The phase chart has been in “Recovery” phase since 22 July 2010 with the index above its 50 day moving average. The 200 day moving average is at 2900 levels and the market doesn’t look to have enough momentum to test this level just yet.

The chart pattern is still positive at this stage with the index rebounding from the low formed on 13 Aug. An inverted head and shoulder pattern has been established in the charts and this gives a target of 2740.

US Market Hanging On Tenterhooks

2010-08-12T14:07:00.002+08:00

US market closed down 265 points on Wednesday. Bad news seems to be appearing at the same time. China reported a weaker than expected retail sales numbers and a dip in industrial production during July. The US Fed appeared to be less optimistic in the recovery and weakness is appearing in the US economy. CISCO reported revenue that fell short of analyst’s expectation after the market closed. This will put more pressure on the market.

The Dow Jones Industrial Average has now broken through the 50 day moving average and is set to test its 200 day moving average at 10,263. This will be a key level to watch for Thursday trading session.

The phase chart has made a U-turn from “Accumulation” phase. It looks likely that the index will test the 10,000 level soon.

Dow Is Back In Bearish Phase

2010-07-17T11:51:00.002+08:00

Market got their first big sell off after a week of gains that carry the Dow Jones Industrial Average to 10,400 level. Bears got the sell off that they were looking for on Friday with a drop of 261 points. The index is now below its 50 and 200 day average, driving the market back into “Bearish” phase as indicated in the phase chart.

Earning results gave stocks like Alcoa and Intel a good bounce. However, they were not able to hold onto their gains.

This market looks to be following the “Buy on rumors sell on news” syndrome. With the index now back in “Bearish” territory, good earnings results may not be able to drive the market higher.

S&P500 Dead Cross

2010-07-03T18:53:00.002+08:00

The dreaded dead cross where the 50 day moving average goes below its 200 day moving average appeared on the chart of S&P500 index. This brings the index into “Bearish” territory based on the phase chart.

The Dow Jones Industrial Average has confirmed its head and shoulder pattern and this gives a downside target of 8500. Similar head and shoulder pattern is also appearing on the S&P500 chart.

All these signs point to further weakness in the market.

Dow Commentary

2010-06-19T13:18:00.001+08:00

The Dow Jones Industrial Average managed to close above its 200 day moving average this week. The index formed a “W” pattern on the daily chart. This bode well for the bulls. However, this pattern was formed on low volume, meaning that the market went up without the mass participation that is required to make a sustainable rally. It is likely that the market is moving up because of the lack of sellers rather than abundance of buyers.

The improvement in the market action is also shown in the daily phase. The phase chart has moved back to “Warning” phase from “Distribution” phase. This improvement cannot be taken as sign to buy into the market and investors looking to add to their positions should wait for a better entry point.

EURUSD In Bearish Phase

2010-06-05T12:27:00.002+08:00

EURUSD continues falling amid more news of problems in Europe. A Hungarian official's warning about the state of his country's economy deepened anxiety over Europe's debt crisis.

The currency pair has now broken below 1.20 levels and looks likely to fall further.

Looking at the phase chart, we see that the trend for EURUSD is firmly in “Bearish” territory. Apart from mid April where the currency bounced above its 50 day moving average, the currency pair has been in “Bear” phase since late January. Traders who had taken the signal to short the market would have seen the currency pair falls from 1.38 level to the current 1.19 level. That is a good profit for staying with the trend.

Dow In Distribution Mode

2010-05-29T11:15:00.001+08:00

US market was down 122 points during Friday’s session. The market seems to be having difficulty holding on to its gains and market participants have been very eager to take profits during any up move. This is not a good scenario for the bulls.

The phase chart for Dow Jones Industrial Average has fallen to “Distribution” stage and the current price movement is the typical “Distribution” market. The 9700 level is still the support level to watch. If the market pierces through this support line, we can expect to see the index test the 9000 level.

Dow Warning Signs

2010-05-15T10:34:00.002+08:00

Market turmoil continues. Dow closed yesterday at 10,620 falling 162 points for the day. The euphoria from the €750 billion agreement by the EU and IMF more or less fizzled out.

There are signs that debt crisis in Europe will come back to haunt the market again. The EUR has weakened against the USD and it has fallen below 1.25. This is not a good sign as traders continue to sell EUR despite repeated calls from EU that they will support the Euro.

With USD at record high against the EUR, this will mean that exports from US will be less competitive and this will in turn affect earnings of US companies that derived significant business from the EUR zone.

The problems in Europe have a negative impact on the US stock market. The Dow Industrial Average is now in “Warning” phase suggesting further weakness ahead. The index dropped below its 200 day moving average 6 May and even though a rebound followed, the index is finding difficulties staying above its 50 day moving average. It looks likely that the index will test its 200 day moving average again. As of Friday, the 200 day average stood at 10,234.

Shanghai Index Enters Bearish Phase

2010-04-20T07:22:00.002+08:00

China market had a bad day yesterday. The Shanghai Index broke through its 200 day moving average, forming a long black candle. The move was triggered by the authority’s stance on controlling the property market in China. The market took the news negatively and the index closed below its 200 day moving average to end at 2980.

The phase chart has also moved to “Bearish” phase. The longer the index stays below its 200 day moving average, the more “Bearish” it gets. The best scenario for the bulls is for the index to move above its 200 day moving average in the next few trading session and for the index to move above 3200 level. However judging from yesterday’s performance, it is unlikely that such scenario will play out. It is best to take a defensive stance and to wait for a better opportunity to buy into this market.

Dow Still In Bullish Trend

2010-04-07T07:56:00.001+08:00

Dow did not manage to break the 11000 level on Tuesday’s trading session. The index has made a significant recovery since its low on March 2009 and it is not realistic to keep going up in a straight line. Looking at the monthly chart, the Dow has made 10 white candles out of 13 trading months from March 2009 to March 2010. Hence a pullback at this point is actually healthy for the market.

Judging from the phase chart, the market is still in bullish territory. However the market is already showing some fatigue as it runs into resistance level. If the index manage to overcome the 11,000 level it is most likely be coming against a strong resistance at 11,300 level. This level coincides with the 61.8% Fibonacci retracement level.

Nikkei 225 Update

2010-03-13T20:09:00.001+08:00

The USDJPY currency pair recovered some of its previous day losses and broke the 91 level before settling at 90.45. Weakness in the Yen is usually good news for Japan’s stock market as it helps in making Japanese product more competitive.

Most investors are not positive on Japan’s stock market as the country continues to be plagued by an aging population and deflationary forces in the market.

However looking at the phase chart, the Nikkei 225 is still in “Bullish” mode. The index faces a major resistance at 11000 level. If it is not able to go above the 11000 level then the support at 9867 needs to hold. If this support level is broken, then we will have a lower high and lower low. According to Dow theory, that will be bearish for the market.

Dow - Bullish In Short Term

2010-03-07T19:12:00.002+08:00

The market is back to buying mood. The Dow Jones Industrial had a good outing on Friday moving up 122 points. It seems that the bulls are back in control with indexes making a move to the upside and breaking through resistance levels.

Market participation remains low as shown in the low volume of recent rallies. Short term indicators are turning positive however the long term technical picture has not improved much.

The phase chart for Dow Jones is now back to “Bullish” phase. The next resistance is at 10,750 level. The strategy is still to follow the trend but traders will need to be nimble and get out of the way if selling pressure resumes. The index is very likely to test it’s 200 day moving average again. The current 200 day moving average is at 9,670.

Shanghai Index

2010-01-30T12:23:00.001+08:00

China’s stock market advance into 2010 came to a halt since news that China’s authority is curbing lending for some banks. The measures taken may not be bad in the long run as it will prevent asset bubbles from getting out of hand. Taken in the broader context, it will create an environment that will allow equities an opportunity to move up in a more sustainable mode. However theoretical idea is not the one that brings in the money, only price action does. And the market has signaled that it has other ideas.

Technically, the Shanghai index has moved into “Warning” phase. It broke the longer term uptrend line and closed below the historical support level of 3000 on Friday. If the index rebounds from this level, it will most likely move into a sideway trading range before the market decides on its next move.

Dow In Warning Phase

2010-01-27T08:03:00.002+08:00

Global stock market has been adversely affected by policy makers in China and US recently. China decision to go ahead with plans to curb lending to prevent economy from overheating and the proposal in US to stop banks from doing proprietary trading caused global market to stage a sharp retreat.

Dow industrial average has entered “Warning” phase with the index closing below its 200 day moving average. Since moving to “Bullish” phase, the index closed below its 200 day moving average only on 2 occasions.

The manner in which the index pierced through this support line suggests that we will be seeing further weakness. For investors who are thinking of raising their bets, I suggest that they take to the sidelines to wait for clearer signs from Mr Market before putting their money into the market.

Remember to trade with the trend and make it your best friend in 2010. Happy trading!

Forex Trends

2010-01-17T09:38:00.000+08:00

Forex Trends

Trends formed in different markets. For example stock market, commodity market, forex market etc. Trading with the trend is a proven method to trade any market, but it is particularly effective in trading forex market. Why?

Consider stocks in equity market. If a company is doing badly and its stock is trending downwards, the company can take measures to improve the situation. For example, the company can be restructured, CEO can be replaced etc. This can cause a rapid change to the company’s fundamental outlook which will sooner or later be reflected in its stock price. This process can happen in a fairly short period of time.

When we trade forex market we are trading the economies of entire nation. When a country’s economy is strong or weak, it usually takes a longer time for economy to recover.

Hence, forex tends to stay in a trend longer than other markets.

Gold Cautious Moving Forward

2009-12-19T10:23:00.002+08:00

Loose monetary policies have caused a surge in commodities and stock markets around the world. Part of the surge in gold prices have been attributed to the weakness of US dollar where investors dump US dollars in the expectation that inflation will raise and Gold will better preserve value.

However, US dollar has strengthened considerably this week. For example EURUSD currency pair dropped below the 1.430 level with EURUSD currency pair on Friday’s trading session.

So where is the direction of gold heading?

The phase chart is still in bullish phase. However, warning signs are appearing. The price dropped below its 50 day moving average on Thursday briefly dipping to “Warning” phase. It is still early to talk about a trend reversal at this stage but the price behavior warrants some caution as a drop below its 50 day moving average is a sign that investors may start to take some profits off the table.

China Still In Bullish Phase

2009-12-05T14:23:00.001+08:00

Shanghai Stock Index is following a cup and handle pattern that shows a long term upside breakout. The upside target is 3400 which is very near to the Friday’s closing level of 3317.

The phase chart is still showing an uptrend that re-established itself on 19 Oct 09 after dipping below its 50 day moving average.

The next resistance level is at 3400 level and it will take a lot of conviction from the bulls in order to close this level.

STI Still In Bullish Mode

2009-11-15T15:44:00.002+08:00

Singapore’s Straits Times Index has been flirting with its 50 day moving average. The index has moved below the 50 day moving average on several occasions only to stage a rebound to close above it. The 50 day moving average is now at 2668 and this will be a critical support level going forward.

The phase chart is now back in “Bullish” phase although it went into “Warning” phase in the first 2 weeks of November.

The index is also showing difficulty in moving above 2740 level. Break above 2740 will mean a target objective of 2900. Let’s see if the bulls can keep the rally going.

SGD Getting Stronger

2009-10-17T12:21:00.002+08:00

US dollar is continuing its bearish trend with respect to the SG dollar. The US dollar index, which tracks the greenback against the currencies of six major US trading partners, has fallen 15% from its peak this year.

The phase chart of US dollar and SG dollar currency pair is clearly on a downtrend. The phase chart has stayed in “Bearish” mode for most of 2009 till date and there is no sign that this trend will reverse any time soon.

One of the main concerns is whether US dollar will lose its status as the main reserve currency. If this happens, it will accelerate the fall of USD.

STI Updates

2009-09-23T13:01:00.002+08:00

We are halfway through the month of September. The correction that most people are anticipating is nowhere in sight.

The phase chart for STI is still in "Bullish" phase. The strategy now is still buy on dips and to stay with the bullish uptrend.

So long as the 50 day moving average is not broken, the market should still be on an uptrend.

Shanghai Market

2009-08-30T10:34:00.001+08:00

The Shanghai stock index has moved to “Warning” phase since 14 August 2009. It broke its 50 day moving average with ease on 14 August. The subsequent rebound from 2800 level met with strong resistance at the 3000 level.

It seems that the Chinese government is trying to prevent a new stock market bubble from forming. However, it does seem that the Chinese government also does not want the market to drop too much.

Nevertheless, weakness is beginning to show on the charts. The index has traded in “Warning” phase for 11 trading days now.

The next support level is at 2800 level. If the index breaks through this level, it will complete a lower high and lower low pattern. This will mean a possibility for the index to test its 200 day moving average.

Hang Seng Index

2009-08-10T11:05:00.000+08:00

Hong Kong stock market has been on a run since hitting its low on March 09. The phase chart turned “Bullish” at the end of May 09 and has been maintaining its bullish stance since then except for a dip to “Warning” phase on 13 July 09. That dip proved to be a buying opportunity.

The market has stayed in “Bullish” phase for 50 days now and it looks set to continue. However, investors who are looking to add new long positions may be better off waiting for a test of the 50 days moving average before entering. As in all market developments, this market will not move up in a straight line.

STI In Bullish Phase

2009-07-25T10:51:00.003+08:00

Singapore STI has snapped back into bullish territory. The index tested its 50 day moving average in mid July before staging a rebound. The index is now above 2500 level and is at Sep 08 level.

The party looks set to continue.

Dow Is In Bullish Trend

2009-07-18T13:25:00.004+08:00

When everyone is expecting the market to correct, it proved otherwise. The head and shoulder pattern did a reversal and the Dow is back above 8700. The breakdown below 8000 points did not occur.

The phase chart is showing a “Bullish” signal for the index. The indicator moved into “Bullish” phase on 15 July and has maintained bullish stage for 3 trading days. The trend is clearly in favor of the Bulls.

Shanghai Stock Index

2009-06-28T20:25:00.002+08:00

Shanghai stock market is approaching the critical 3000 level. The Shanghai market moved into “Bullish” phase since 10 Apr 09. There were corrections along the way up from 2444 to 2928. However corrections were shallow showing the strength of this rally.

No one knows exactly how far this rally will go but the bulls have the upper hand at this stage. Any pullback should see support at 2828 level, the previous pivot high.

The Trend Of Oil Price

2009-06-18T08:09:00.002+08:00

The price of crude oil ended near the $70 mark per barrel. The price of oil is one of the determining factors that influence the movement of stock market. When the price is too high, the fear of inflation kicks in. When the price is too low, market participant infer that demand for oil is low which gives the perception the economy is slowing down.

Such is the love and hate relationship that market participant has with oil price.

Looking at the phase chart of USO (United State Oil ETF), the price of oil is facing the 200 day moving average resistance level. The price is sandwiched between the 200 day and 50 day moving average. It is still in “Recovery” phase.

If the price is able to bounce off from the 50 day moving average, it will be a sign that investors are betting on higher oil price in the coming months. Looking at the technical charts, oil price should have further upside.

STI

2009-06-07T17:49:00.003+08:00

STI moved to "Bullish" phase on 29 May 09. The last time the index moved to "Bullish" stage is on Oct 07.

Analysts are still debating on whether this is a bull or bear market rally. But judging on the phase chart, it is clearly showing an uptrend.

Bullish Taiwan

2009-05-25T07:41:00.002+08:00

Taiwan stock market is one of the few markets that has entered “Bullish” phase. Relationship with China has improved since Ma Ying Jeou took over as president. Nine groundbreaking accords had been signed so far, covering areas such as direct sea, air and postal links.

Taiwan’s benchmark index made a bullish crossover on 7 May whereby its 50 day moving average crossover its 200 day moving average and has not turned back since.

The trend is clearly positive and investors can consider entering into this market on pullback.

Nasdaq

2009-05-22T08:02:00.001+08:00

Market participants are waiting for a pullback in stocks and it looks like the pullback has already started.

The Nasdaq index went briefly above its 200 day moving average, stayed above there for a few days and it has now drop below its 200 day moving average. It looks more and more like a false breakout.

The phase chart is now at “Recovery” phase moving down from “Accumulation” phase. It looks set to test its 50 day moving average.

The selling will intensify if the 50 day moving average is taken out by the bears.

STI

2009-05-17T12:35:00.001+08:00

STI index has started its decent from its recent rally. The index has stayed in “Recovery” phase since 4 May 09. The 200 day moving average is at 1985. Since Jan 08, the 50 day moving average has been below its 200 day moving average with the index firmly below the 200 day moving average. May 09 marks the first time in more than a year in which the index stayed above its 200 day moving average.

The market is still not decided on whether it is a beginning of a new bull market or simply a bear market rally.

The next milestone to look at is to see whether the 50 day moving average can go above its 200 day moving average.

Gold In Warning Phase

2009-05-04T07:44:00.001+08:00

Gold price has fallen back to January 09 levels as seen in the price action of SPDR Gold Shares.

It is currently in “Warning” phase with the price stuck between its 200 day and 50 day moving average.

In April trading, the price of SPDR Gold Shares bounced off its 200 day moving average twice. It looks set to test it again with a downward sloping 50 day moving average.

For the bears, a good opportunity will be to short gold when it goes below its 200 day moving average. For the bulls, they will be looking at a break away from the 50 day moving average as confirmation of the continuation of the uptrend.

STI Update

2009-04-18T15:52:00.002+08:00

STI continued its bull run and is now at 1896 level. The index has stayed 19 trading days in “Recovery” mode. The index is showing some fatigue as it approaches its 200 day moving average of 2075.

Similar pattern is seen in US market with the Dow Jones Industrial Average ascent slowing down as it approaches its 200 day moving average of 9230.

The pullback if it happens will tell us whether this is a bear rally or beginning of a bull run.

STI Update

2009-03-27T08:14:00.001+08:00

Singapore stock market is having a good run. The index is now 6.8% above its 50 day moving average.

From the phase chart, we are now in “Recovery” mode. The index has moved into “Recovery” mode 4 times since it went into “Bearish” mode in the beginning of Jan 2008.

The index is facing resistance level of 1780. We have not seen such strength in the market for a long time now. Hopefully it can clear this level and proceed to test its 200 day moving average.

China Market

2009-03-08T10:30:00.002+08:00

Shanghai Market is among the better performers in 2009. The Shanghai composite index has managed to stay in “Recovery” mode since early Jan 2009.

The index is now sitting between the 50 day and 200 day moving average. The index climbed from a low of 1664 to hit a high of 2402 before pulling back to current levels. That is a gain of almost 45% in a span of about 5 months.

The slope 50 day moving average is turning positive which is a good sign. The 200 day moving average is still moving with a downward bias.

The index will have to go above 2359 in order to move to “Accumulation” phase. Let’s see what happen this week.

Have a great time trading the market and remember to follow the trend.

STI

2009-03-02T08:25:00.002+08:00

Dow closed at 7062 on Friday, down 119 points. The index has fallen through the bottom set in Nov 08.

STI is also following a similar pattern. It is now at 1594 points. It looks likely that the index will go below the low of 1473 set on 28 Oct 08.

The phase chart is showing continuing weakness. The index is still in “bearish” territory. It did go above its 50 day moving average for a while however the momentum could not be sustained. Singapore market, being an export dependent economy, will need other countries especially US and China to recover first before our own market can climb out of the doldrums.

US Financial Sector Update

2009-02-22T10:52:00.001+08:00

The Dow Jones Industrial Average broke its Nov 2008 lows this week. It closed below its psychological low of 7552.29 on Thursday trading session. This point to further weakness down the road and the index may go down further to test 6000 level.

Rumors that Bank Of America and Citigroup could be nationalized brought pressures to the financial sector. The White House on Friday insisted that the US government is not trying to take over the two financial institutions. Bank Of America closed at $3.79 and Citigroup closed at $1.95.

The financial sector is still deep in “Bearish” territory. Looking at the XLF, the sector fund tried to move out of “Bear” territory but fell right back into it on 7 Jan 09. It has since stayed in “Bearish” phase for 31 trading days.

It looks like the market needs to find a lower bottom before a rebound can take place.

Commodity Sector

2009-02-08T14:59:00.002+08:00

Commodity seems to be making a come back recently. The Baltic Dry Index (BDI) has rebounded from a low of 663 on 5 Dec 08 to close at 1642 on 6 Feb 09. Commodities related stocks in Singapore showed strength this week.

Let’s look at the commodity sector as a whole to see which phase we are in.

The iShares S&P GSCI Commodity-Indexed Trust is a fund that investor invest in a portfolio of exchange-traded futures contracts tracked by the index. The index currently tracks 24 different commodities. It is weighted with approximately 67% invested in energy, 16% in agriculture, 7% in industrial metals, 7% in livestock and 3% in precious metals. The index is production weighted to reflect the relative significance of those commodities to the world economy.

The GSCI commodity index trust is now sitting in “Bearish” mode. The index tested its 50 day moving average on 6 Jan 09 but was not able to maintain its bullish momentum.

The index looks to be forming a double bottom and the 50 day moving average looks to be forming a base. It is too early to be bullish on commodities based on the phase chart. We need more evidence of a sustainable rally and the picture will look better if it can move above its 50 day moving average.

US Financial Sector

2009-01-31T11:12:00.002+08:00

Dow Jones Industrial Average closed slightly above 8000 points on Friday. The index was down 148 points on Friday after falling 226 points during Thursday’s session. Sellers are definitely in control.

In order for the market to recover, the financial sector needs to stabilize first and banks will need to provide liquidity to push up the market.

A look at the XLF shows that the financial sector in US is still trying to find a bottom. Unlike the Dow, XLF actually went below its Nov 08 lows of $8.54 on 20 Jan 09 before rebounding to a high of $10.51 on 28 Jan 09. It closed at $9.24 on Friday.

The phase chart shows that XLF is still in “Bearish” territory. It tested the 50 day moving average in the beginning of January. But the resistance proved too much for the bulls to overcome and sellers are gaining control again.

The next support level for XLF is at $8.00 level and if this support is broken, it will mean more pain for the bulls.

STI Update

2009-01-15T10:50:00.001+08:00

STI index is testing its 50 day moving average again. Based on the Wednesday closing level, phase chart for STI is still in recovery mode with the index above its 50 day moving average of 1759.

However we are now seeing the index at 1711 (10 am Singapore time), which pushes the index back to “Bearish” mode.

With Singapore’s budget day approaching, the bears may close their positions to avoid any surprises next week.

Let’s see if the index is able to push back above its 50 day moving average today. It is finding support at 1711. That is the low set on 24 Dec 08.

Dow Industrial Average

2009-01-05T21:26:00.002+08:00

US market closed above 9000 points last Friday. The index is now above its 50 day moving average meaning that the index is now in “Recovery” phase.

The index has stayed in “Recovery” phase for the past 3 trading days. This has been the best performance by the index since the end of Aug 08 where the index managed to stay on “Recovery” phase for 5 trading days before resuming the downtrend.

This time the recovery coincides with the “Capricorn” effect. And hopefully it will turn out to be the real recovery.

Singapore Market

2008-12-28T15:54:00.003+08:00

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

2008-12-22T07:51:00.003+08:00

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

2008-12-11T08:17:00.002+08:00

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

2008-12-01T08:39:00.002+08:00

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

2008-11-18T07:27:00.002+08:00

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

2008-11-03T07:32:00.002+08:00

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

2008-10-19T17:03:00.001+08:00

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

2008-10-12T13:44:00.001+08:00

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

2008-10-05T19:42:00.001+08:00

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

2008-09-20T16:05:00.002+08:00

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

2008-09-14T14:46:00.002+08:00

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

2008-09-07T07:58:00.002+08:00

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

2008-08-23T15:59:00.002+08:00

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

2008-08-18T08:44:00.002+08:00

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

2008-08-11T09:05:00.001+08:00

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

2008-08-02T12:43:00.001+08:00

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

2008-07-30T08:15:00.002+08:00

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

2008-07-20T15:20:00.001+08:00

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

2008-07-07T07:19:00.002+08:00

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

2008-06-28T14:39:00.002+08:00

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

2008-06-17T08:20:00.004+08:00

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

2008-06-14T14:17:00.002+08:00

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

2008-06-11T15:35:00.001+08:00

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

2008-06-01T21:24:00.002+08:00

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

2008-05-25T20:41:00.001+08:00

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.

Oil Update

2008-05-22T23:05:00.003+08:00

Oil price has been rising steadily and there is no sign that the price is going to come down anytime soon.

Lets look at United States Oil (USO) a investment fund that seeks to reflect the performance, less expenses, of the spot price of West Texas Intermediate (WTI) light, sweet crude oil.

The closing price on 21 May 08 was 108.31. For 2008 alone, the price has gone up from 75.76 to 108.31, an increase of 43%.

The phase chart is in “Bullish” phase. In fact the price level has not touched the 200 day moving average since Aug 07.

The price is now about 45% above its 200 day moving average of 74.51. There is a high chance of a pullback from current high levels. But the trend is clearly up.

Nikkei225 Update

2008-05-20T13:48:00.002+08:00

The land of the rising sun looks brighter for the past few weeks. The Nikkei 225 index moved into “Recovery” phase since the beginning of Apr 08.

The index has stayed in “Recovery” phase for 28 trading days. It is now above its 50 day moving average. The 200 day moving average is now at 14,963. The immediate support for the index is at 14,000 points.

S&P500 Phase Analysis

2008-05-17T14:16:00.005+08:00

US market performed well this week. The S&P500 index was up 37 points (2.6%) for the week to close at 1425.

We have mixed economic data on Friday. Housing starts for April exceeded economist’s expectation whereas the University of Michigan consumer sentiment survey reading for May was below estimates.

The market looked to be heading towards triple digit losses for the Dow but buying in the afternoon pushed the index back near the unchanged mark.

The S&P500 is still in “Recovery” mode and the index is now testing the 200 day moving average of 1427.

If you look at the daily chart for the S&P500, the index looks bullish based on MACD and slope of the Bollinger band.

My personal opinion is the index will break the 200 day moving average soon and the index will be moving to “Accumulation” phase.

Gold ETF Update

2008-05-06T07:26:00.003+08:00

The streetTRACKS Gold ETF slipped into “Warning” phase on 20 Mar 08 and it is now below its 50 day moving average.

Similar price pattern occurred last year from 16 May 07 to 9 July 07 where it stayed in “Warning” phase for 35 trading days.

We are now in “Warning” mode for 25 trading days. A lot will depend on whether the index can hold above its 200 day moving average of 80.87. If you are thinking of buying into Gold, I suggest that you hold on to your cash and wait for the index to move back to “Accumulation” or “Bullish” mode.

Dow Update

2008-05-03T12:12:00.003+08:00

The Dow had a better showing in April compared to March. The index was up 558 points for the month of April, an increase of 4.5%. On Friday, Dow managed to close above 13000 points since early Jan 2008. The job numbers released on Friday showed 20,000 job losses in April compared to 81,000 in March. The unemployment rate dropped to 5 percent compared from 5.1 percent. The job losses were not as bad as market expected and the market managed to clear its 200 day moving average.

The market certainly looks brighter from the phase chart. It has managed to move to “Accumulation” phase for the first time in 2008.

It will be interesting to see whether this show of strength will continue in the month of May.

Hang Seng Update

2008-04-27T20:07:00.004+08:00

The Hang Seng Index broke out of its 200 day moving average on 23 Apr 08. The index is currently in "Accumulation" phase.

The chart is showing more strength for Hong Kong then Shanghai. The Shanghai Composite Index is still in "Bearish" mode. If you are keen to invest in the China story, it may be better to park your cash in Hong Kong. In terms of valuation, H-shares listed in Hong Kong are more attractive than the A-shares listed in China.

Currently the 300 member CSI 300 is still valued at 22 times earnings estimates for this year whereas Hang Seng China Enterprise Index is trading at 16 times earnings estimates.

STI Update

2008-04-26T13:26:00.002+08:00

STI closed at 3189 on Friday. For the week, the index is up by 64 points. The index is lying between its 50 day and 200 day moving average of 3025 and 3348 respectively.

The index has stayed in “Recovery” mode for 24 trading days now. Looking back at the historical data, the index stayed in “Recovery” phase for 22 trading days from 29 Apr 03 to 30 May 03 before moving to “Accumulation” and “Bullish” mode.

Let’s see if the index has the power to clear the 200 day moving average.

Shanghai Market Update

2008-04-20T15:38:00.003+08:00

The Shanghai Composite Index drop 398 points to end the week at 3094. That is a 12% drop in 1 week.

The phase chart is showing weakness since 10 Mar 08 when the index dipped into “Bearish” phase. It has stayed in “Bearish” mode for 29 trading days. For this round of bear attack the index has dropped from 4300 to 3094, a whopping 1206 points or 28%. The bulls must be feeling the heat right now.

The last time the index fell into “Bearish” phase was in 27 Sep 05. The market stayed in “Bearish” phase till 9 Dec 05, a total of 47 trading days.

The chart doesn’t look good for Shanghai. Hope it can find some support at 3000.

Hang Seng Update

2008-04-18T07:35:00.005+08:00

Hong Kong Hang Seng Index closed at 24258.96. An up move of 380 points.

The phase chart is showing that the index is still in "Recovery" mode. It has stayed in this mode for 12 trading days now. The index stayed in "Bear" mode from 6 Mar 08 to 1 Apr 08, a total of 18 trading days. That was relatively short compared to Singapore STI, Japan Nikkei 225, Dow etc. Hong Kong has always been tied to the China growth story which may explain why it is able to bounce up from the "Bear" phase so quickly.

For now the index is trapped between the 50 day and 200 day moving average. Should be able to start buying if it can clear the 200 day moving average.

STI Update

2008-04-15T07:33:00.001+08:00

STI closed at 3042.96 on Monday, down 83.91 points. That is a drop of more than 2%.

Looking at the phase chart and moving average chart,

The STI is still at "Recovery" phase. It has stayed in "Recovery" phase for 15 trading days. This is the best performance for the index so far in 2008.

The next support for STI is 2995.45. If the index can hold above its 50 day moving average of 2995.45, then the "Recovery" is still intact.

Taiwan Market Update

2008-04-13T19:52:00.001+08:00

Taiwan stock market has been on a good run recently due to presidential election results. The market reacted positively after the election result and the index is now above it's 200 day moving average.

The market has been moving between "Accumulation" and "Recovery" phase. A good sign for those that are invested in Taiwan market.

Hang Seng Updates

2008-04-09T07:56:00.002+08:00

Hang Seng Index has recovered from its low of 20,572 and is now at 24,311. About 4000 points move in 3 weeks.

It is now above its 50 day moving average and is in "Recovery" phase since 2 Apr 08. It stayed in "Bearish" phase for about 1 month and if it can take out the 200 day moving average then we will be in "Accumulation" phase.

US is showing some strength recently even with bad news being announced. Hope this show of strength will spread to Hong Kong and the rest of Asia.

India BSE Index

2008-04-07T07:43:00.001+08:00

The India BSE Index moved to "Bearish" phase on 31 Mar 08. The last time the index moved into "Bearish" phase was in Jun 04. It stayed in "Bearish" phase from 21 Jun 04 till 15 July 04, a "Bear" period for around a month.

Let's see if the market snaps back as fast as the last down turn. Based on current technical picture, it is still too early to invest in the India market.

US Financial Sector Update

2008-04-04T07:28:00.002+08:00

US Financial Sector seems to be gaining strength again.

The iShares Dow Jones US Financial Sector fund is now in "Recovery" phase.
This is the first time the fund is testing the "Recovery" phase twice within
a span of 10 trading days since the beginning of 2008.

The fund is now trading slightly above the 50 day moving average of 86.24.
It has stayed in "Recovery" mode for 3 days now. Let's see if it is able to
move up to challenge the 200 day moving average of 99.95.

EURUSD Phase Analysis

2008-04-01T14:53:00.001+08:00

Date	Close	Phase	50 DMA	200 DMA
1/2/2008	1.471500039	3	1.462633967	1.398215771
1/3/2008	1.474300027	3	1.463170052	1.398816347
1/4/2008	1.475200057	3	1.463551998	1.399397254
1/6/2008	1.474799991	3	1.463805795	1.400010705
1/7/2008	1.468199968	3	1.463815928	1.400604248
1/8/2008	1.470700026	3	1.46389389	1.401202559
1/9/2008	1.466199994	3	1.463897824	1.401773691
1/10/2008	1.479900002	3	1.46445179	1.402442217
1/11/2008	1.477699995	3	1.464767933	1.403106213
1/13/2008	1.480499983	3	1.465078115	1.403781295
1/14/2008	1.486700058	3	1.465574026	1.404503345
1/15/2008	1.480200052	3	1.465881944	1.405181289
1/16/2008	1.466099977	3	1.465863824	1.405788779
1/17/2008	1.463799953	-1	1.465807915	1.406381726
1/18/2008	1.461599946	-1	1.465377927	1.406963706
1/20/2008	1.459400058	-1	1.464853764	1.407544613
1/21/2008	1.441799998	-1	1.463985801	1.408026576
1/22/2008	1.464300036	3	1.463599801	1.408625603
1/23/2008	1.462700009	-1	1.46318388	1.409217477
1/24/2008	1.477100015	3	1.46298182	1.409857512
1/25/2008	1.467100024	3	1.462653995	1.410434365
1/27/2008	1.468999982	3	1.462355971	1.411030889
1/28/2008	1.478600025	3	1.462413907	1.411711097
1/29/2008	1.476699948	3	1.462690115	1.412411213
1/30/2008	1.482800007	3	1.463021994	1.413146615
1/31/2008	1.486400008	3	1.463412046	1.413904071
2/1/2008	1.479799986	3	1.463484168	1.414652705
2/3/2008	1.480200052	3	1.463898182	1.415399432
2/4/2008	1.482599974	3	1.464238167	1.416157961
2/5/2008	1.463500023	-1	1.464200139	1.416786075
2/6/2008	1.461300015	-1	1.464123964	1.417400002
2/7/2008	1.447600007	-1	1.46366024	1.417930007
2/8/2008	1.451200008	-1	1.463361979	1.418473005
2/10/2008	1.452399969	-1	1.462988138	1.419035912
2/11/2008	1.450000048	-1	1.462736011	1.419591546
2/12/2008	1.457999945	-1	1.463050246	1.420149565
2/13/2008	1.45539999	-1	1.46332407	1.420695543
2/14/2008	1.46420002	3	1.463784218	1.421284914
2/15/2008	1.467800021	3	1.464303851	1.421898603
2/17/2008	1.467200041	3	1.464884043	1.422507167
2/18/2008	1.4648	-1	1.465517879	1.423112154
2/19/2008	1.472800016	3	1.466259718	1.423709512
2/20/2008	1.472100019	3	1.466949821	1.424303174
2/21/2008	1.481299996	3	1.467787743	1.424900174
2/22/2008	1.483100057	3	1.468659878	1.425512075
2/24/2008	1.483100057	3	1.469349623	1.426115155
2/25/2008	1.483299971	3	1.469795585	1.426735282
2/26/2008	1.499600053	3	1.470357656	1.427421212
2/27/2008	1.511600018	3	1.471121788	1.428166866
2/28/2008	1.519099951	3	1.472305894	1.428951859
2/29/2008	1.518000007	3	1.473235965	1.429670453
3/2/2008	1.519999981	3	1.474150062	1.43039763
3/3/2008	1.51970005	3	1.475040078	1.431104779
3/4/2008	1.520699978	3	1.475958109	1.431815624
3/5/2008	1.527699947	3	1.477147937	1.432566643
3/6/2008	1.538300037	3	1.478500009	1.433370709
3/7/2008	1.534500003	3	1.479866147	1.434145689
3/9/2008	1.539399981	3	1.481056094	1.434940219
3/10/2008	1.533599973	3	1.482174039	1.435709238
3/11/2008	1.533800006	3	1.483240008	1.436465621
3/12/2008	1.55400002	3	1.484586239	1.437316537
3/13/2008	1.562000036	3	1.486222267	1.438226342
3/14/2008	1.566900015	3	1.488238096	1.439150095
3/16/2008	1.575999975	3	1.490482211	1.440169573
3/17/2008	1.574300051	3	1.49273622	1.441166043
3/18/2008	1.565400004	3	1.494856238	1.442175627
3/19/2008	1.563599944	3	1.49729228	1.443174481
3/20/2008	1.543499947	3	1.498876333	1.444031477
3/21/2008	1.54369998	3	1.50049603	1.444913507
3/24/2008	1.543200016	3	1.501818061	1.445797563
3/25/2008	1.56099999	3	1.503696084	1.446750283
3/26/2008	1.582000017	3	1.505956173	1.44776988
3/27/2008	1.58099997	3	1.508004189	1.44876492
3/28/2008	1.58039999	3	1.510078073	1.449761391
3/30/2008	1.577000022	3	1.511962175	1.450769186
3/31/2008	1.575700045	3	1.513748169	1.451747894
4/1/2008	1.566599965	3	1.515484214	1.452747345

The phase analysis method can also be applied to currency. Lets look at EURUSD currency pair.

If you look at the phase table, you can see that the EURUSD currency is now in "Bullish" phase. In fact this currency pair has been in bullish mode since Apr 06.

STI Trend Updates

2008-03-28T08:02:00.001+08:00

Singapore managed to gain 29.98 points yesterday to close at 3025.20. That was a good performance given the fact the Shanghai market went down by 194 points, slightly more than 5% losses.

If you look at the phase table for STI index, it is now in "Recovery" phase. In actual fact, it has managed to stay in "Recovery" phase for 3 days now. This is the first time the index is able to claw back to "Recovery" phase in 2008.

STI	Close	Phase	50 DMA	200 DMA
1/2/2008	3461.219971	-2	3536.371582	3505.101807
1/3/2008	3397.060059	-2	3529.352783	3506.520264
1/4/2008	3437.790039	-2	3525.255859	3508.125
1/7/2008	3353.060059	-2	3518.411133	3509.111816
1/8/2008	3338.27002	-2	3512.194336	3509.706055
1/9/2008	3344.530029	-3	3504.942139	3510.399414
1/10/2008	3311.070068	-3	3495.732422	3510.931641
1/11/2008	3287.340088	-3	3485.08374	3511.197754
1/14/2008	3218.139893	-3	3473.477539	3511.280029
1/15/2008	3154.580078	-3	3460.455078	3510.908447
1/16/2008	3058.48999	-3	3445.553467	3510.044678
1/17/2008	3139.879883	-3	3434.044678	3509.512695
1/18/2008	3104.25	-3	3422.72583	3508.592285
1/21/2008	2917.149902	-3	3407.406982	3506.513184
1/22/2008	2866.550049	-3	3391.277832	3504.116455
1/23/2008	2983.620117	-3	3378.956543	3502.034668
1/24/2008	3050.090088	-3	3369.73584	3500.172119
1/25/2008	3159.47998	-3	3363.416504	3498.866455
1/28/2008	3041.060059	-3	3353.739258	3497.208496
1/29/2008	3049.899902	-3	3345.185547	3495.590088
1/30/2008	3000.030029	-3	3336.366943	3493.519287
1/31/2008	2981.75	-3	3327.767578	3491.351807
2/1/2008	3007.800049	-3	3319.158447	3489.388672
2/4/2008	3077.080078	-3	3313.756348	3488.317871
2/5/2008	3038.419922	-3	3308.266846	3486.706543
2/6/2008	2931.969971	-3	3300.388428	3484.423828
2/11/2008	2868.290039	-3	3289.382813	3481.892822
2/12/2008	2926.22998	-3	3280.454346	3479.710693
2/13/2008	2949.540039	-3	3272.051025	3477.423828
2/14/2008	3045.590088	-3	3263.398438	3475.658447
2/15/2008	3088.679932	-3	3254.746826	3474.295654
2/18/2008	3083.340088	-3	3245.982422	3472.623047
2/19/2008	3098.060059	-3	3237.385986	3470.860352
2/20/2008	3026.830078	-3	3226.72168	3468.565674
2/21/2008	3054.810059	-3	3216.766846	3466.451904
2/22/2008	3048.639893	-3	3206.580566	3464.499268
2/25/2008	3064.949951	-3	3196.817871	3462.560303
2/26/2008	3077.830078	-3	3186.59375	3460.603027
2/27/2008	3094.449951	-3	3177.497559	3458.840576
2/28/2008	3074.149902	-3	3169.394287	3456.705566
2/29/2008	3026.449951	-3	3160.595947	3454.462891
3/3/2008	2926.550049	-3	3152.055664	3451.5896
3/4/2008	2919.679932	-3	3143.062744	3448.560547
3/5/2008	2910.77002	-3	3134.131348	3445.552734
3/6/2008	2917.919922	-3	3124.527832	3442.56958
3/7/2008	2866.280029	-3	3113.162842	3439.202148
3/10/2008	2836.590088	-3	3100.430664	3435.590332
3/11/2008	2860.850098	-3	3088.103516	3432.243164
3/12/2008	2917.939941	-3	3077.545898	3429.399902
3/13/2008	2805.550049	-3	3064.010986	3425.86084
3/14/2008	2839.01001	-3	3051.56665	3422.42041
3/17/2008	2792.75	-3	3039.480225	3418.828369
3/18/2008	2833.580078	-3	3027.395996	3415.254639
3/19/2008	2833.209961	-3	3016.998779	3411.52417
3/20/2008	2824.909912	-3	3006.731934	3407.784424
3/24/2008	2927.790039	-3	2998.396973	3404.604736
3/25/2008	3000.189941	1	2992.179443	3401.874023
3/26/2008	2995.219971	1	2986.336914	3399.39209
3/27/2008	3025.199951	1	2982.478516	3396.791016

Shanghai Market Updates

2008-03-25T11:04:00.001+08:00

Shanghai Index (Symbol: 000001) is not showing a good picture.

Date	Close	Phase	50 DMA	200 DMA
1/2/2008	5272.810059	3	5257.520508	4546.415527
1/3/2008	5319.859863	3	5248.450684	4558.19043
1/4/2008	5361.569824	3	5238.819336	4570.467285
1/7/2008	5393.339844	3	5235.438965	4582.675293
1/8/2008	5386.529785	3	5231.376465	4594.955566
1/9/2008	5435.810059	3	5225.133301	4607.062988
1/10/2008	5456.540039	3	5216.319824	4619.18457
1/11/2008	5484.680176	3	5206.918457	4631.320801
1/14/2008	5497.899902	3	5198.590332	4643.45459
1/15/2008	5443.790039	3	5191.909668	4655.301758
1/16/2008	5290.609863	3	5185.032715	4666.140137
1/17/2008	5151.629883	-1	5177.334473	4676.20459
1/18/2008	5180.509766	3	5168.90918	4686.241699
1/21/2008	4914.439941	-1	5160.597656	4694.82666
1/22/2008	4559.75	-2	5145.481934	4701.705078
1/23/2008	4703.049805	-2	5135.788086	4708.958008
1/24/2008	4717.72998	-1	5126.97998	4716.089844
1/25/2008	4761.689941	-1	5113.960449	4723.44043
1/28/2008	4419.290039	-2	5095.041016	4728.941406
1/29/2008	4457.939941	-2	5077.874512	4734.613281
1/30/2008	4417.850098	-2	5060.835449	4739.708008
1/31/2008	4383.390137	-2	5042.629395	4744.403809
2/1/2008	4320.77002	-2	5024.759766	4748.53125
2/4/2008	4672.169922	-2	5018.520508	4754.236816
2/5/2008	4599.700195	-2	5009.871582	4759.644531
2/13/2008	4490.720215	-2	5000.509277	4764.115723
2/14/2008	4552.319824	-2	4994.333496	4768.818359
2/15/2008	4497.129883	-2	4988.208496	4773.241699
2/19/2008	4664.290039	-2	4981.427734	4779.318359
2/20/2008	4567.029785	-2	4975.33252	4784.232422
2/21/2008	4527.180176	-2	4968.503906	4788.313965
2/22/2008	4370.290039	-2	4957.591797	4791.562988
2/25/2008	4192.529785	-2	4940.588867	4793.805664
2/26/2008	4238.180176	-2	4924.651367	4796.081055
2/27/2008	4334.049805	-2	4909.49707	4798.95166
2/28/2008	4299.509766	-2	4892.248535	4801.243652
2/29/2008	4348.540039	-2	4875.718262	4803.236328
3/3/2008	4438.27002	-2	4862.573242	4805.362305
3/4/2008	4335.450195	-2	4850.121094	4806.791016
3/5/2008	4292.649902	-2	4835.816406	4808.145996
3/6/2008	4360.990234	-2	4825.500488	4809.71875
3/7/2008	4300.52002	-2	4814.787598	4811.725098
3/10/2008	4146.299805	-3	4798.87793	4812.526367
3/11/2008	4165.879883	-3	4781.324707	4813.114258
3/12/2008	4070.120117	-3	4760.691406	4813.313965
3/13/2008	3971.26001	-3	4735.431641	4812.808594
3/14/2008	3962.669922	-3	4710.661133	4812.069824
3/17/2008	3820.050049	-3	4682.395508	4810.301758
3/18/2008	3668.899902	-3	4649.595703	4807.890625
3/19/2008	3761.600098	-3	4619.596191	4805.799805
3/20/2008	3804.050049	-3	4590.220703	4803.459473
3/21/2008	3796.580078	-3	4559.755371	4800.767578
3/24/2008	3626.189941	-3	4525.047852	4798.632813

It went into "Bearish" phase on 10 Mar 08. It looks to be just the beginning. If you are looking to buy into China market, I think you can wait a while. Seems like the "Bear" party just started.

US Financial Sector

2008-03-24T14:14:00.001+08:00

The current weak market is caused by US sub-prime problem. If you look at the financial sector in US, you can see the cracks appearing back in Aug 2007.

If you look at the iShares US Dow Jones Financial Sector Fund (Symbol IYF), the ETF went into "Bearish" mode on 2 Aug 2007.

It then tried to stage a comeback which coincides with FED cutting interest rate. It never went back to "Bullish" phase and was quickly back to "Bearish" phase. So we are already about 7 months into the financial sector downturn.

The ETF is now at "Recovery" phase and hopefully it can move to "Accumulation" phase.

This fund is invested in top financial names in US. Companies like JP Morgan, Citibank, Bank Of America are companies held by the ETF.

Taiwan Phase Analysis

2008-03-22T18:43:00.001+08:00

Another volatile week for the market. Dow had it's shares of wild swings and ended the week up 410.23. Dow is now slightly above its 50 day moving average and according to the defintion of 6 phases, it is now in "Recovery" phase. With most indices still in "Bearish" mode, Dow's performance is actually quite good. One of the more resilient index for this year is the Taiwan TSEC Weighted Index.

Date	Close	Phase	50 DMA	200 DMA
1/2/2008	8323.049805	-2	8686.542969	8674.143555
1/3/2008	8184.200195	-3	8661.375	8676.584961
1/4/2008	8221.099609	-3	8634.431641	8679.091797
1/7/2008	7883.370117	-3	8599.469727	8679.821289
1/8/2008	7962.910156	-3	8562.530273	8680.954102
1/9/2008	8085.060059	-3	8529.072266	8682.594727
1/10/2008	8057.27002	-3	8495.990234	8683.762695
1/11/2008	8029.310059	-3	8464.612305	8684.613281
1/14/2008	8173.410156	-3	8442.618164	8686.09082
1/15/2008	8428.839844	1	8425.023438	8689.008789
1/16/2008	8179.540039	-3	8402.757813	8690.96582
1/17/2008	8101.629883	-3	8378.785156	8692.232422
1/18/2008	8184.649902	-3	8363.726563	8693.733398
1/21/2008	8110.200195	-3	8346.512695	8694.859375
1/22/2008	7581.959961	-3	8324.739258	8693.105469
1/23/2008	7408.399902	-3	8298.363281	8690.124023
1/24/2008	7517.049805	-3	8269.844727	8687.427734
1/25/2008	7739.589844	-3	8246.529297	8685.882813
1/28/2008	7485.790039	-3	8220.949219	8682.889648
1/29/2008	7576.419922	-3	8198.862305	8680.395508
1/30/2008	7543.5	-3	8176.115723	8678.101563
1/31/2008	7521.129883	-3	8156.855469	8675.490234
2/1/2008	7673.990234	-3	8140.347656	8674.063477
2/12/2008	7553.299805	-3	8124.569336	8671.813477
2/13/2008	7550.549805	-3	8105.013672	8670.124023
2/14/2008	7865.279785	-3	8094.804199	8669.737305
2/15/2008	7876.370117	-3	8086.806641	8669.066406
2/19/2008	8024.410156	-3	8078.354492	8668.962891
2/20/2008	7894.470215	-3	8064.515625	8668.511719
2/21/2008	8085.930176	1	8054.557617	8668.941406
2/22/2008	8108.709961	1	8043.706055	8669.738281
2/25/2008	8286.30957	1	8035.893066	8671.793945
2/26/2008	8307.669922	1	8028.158203	8673.817383
2/27/2008	8462.080078	1	8022.952637	8676.495117
2/29/2008	8412.759766	1	8019.24707	8678.228516
3/3/2008	8262.870117	1	8011.737305	8678.96582
3/4/2008	8470.110352	1	8011.323242	8680.837891
3/5/2008	8483.950195	1	8017.242676	8682.994141
3/6/2008	8658.639648	1	8028.053711	8685.802734
3/7/2008	8531.379883	1	8042.064941	8688.301758
3/10/2008	8299.370117	1	8051.904297	8689.646484
3/11/2008	8381.599609	1	8059.250488	8691.679688
3/12/2008	8435.299805	1	8070.814453	8693.912109
3/13/2008	8210.990234	1	8076.205566	8694.77832
3/14/2008	8161.390137	1	8076.723633	8695.414063
3/17/2008	8005.459961	-3	8073.491699	8694.733398
3/18/2008	8057.819824	-3	8071.520508	8694.079102
3/19/2008	8179.350098	1	8068.833008	8693.867188
3/20/2008	8337.620117	1	8067.646973	8694.473633
3/21/2008	8524.990234	1	8068.021484	8696.298828

The index went to "Recovery" phase on 21 Feb 08 and it has been able to stay in "Recovery" mode except for 17 and 18 Mar 08 where the index moved back to "Bearish" phase.

Seems like investors are positive towards the election in Taiwan.

Oil Phase Analysis

2008-03-19T14:58:00.001+08:00

Oil has been going up lately. Lets look at United States Oil (USO) a investment fund that seeks to reflect the performance, less expenses, of the spot price of West Texas Intermediate (WTI) light, sweet crude oil. The fund will invest in futures contracts for WTI light, sweet crude oil, other types of crude oil, heating oil, gasoline, natural gas and other petroleum based-fuels that are traded on exchanges. It may also invest in other oil interests such as cash-settled options on oil futures contracts, forward contracts for oil, and OTC transactions that are based on the price of oil.

The fund has spent most of the time in "Bullish" phase since July 2007. There were occassional pullback to "Warning" phase but such pullback actually turned out to be buying opportunity.

The graph looks extended at the moment but the trend is still "Bullish".