STI Update

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

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.