Market Commentary
STI did clear 2,283 on Wednesday. The breakout on Wednesday, retracement on Thursday & further rally on Friday resembles an A-triangle breakout ( although I still like to reiterate the pattern itself is not as ideal as I would like to see so I am casting doubt on the validity myself ). If the pattern is valid, the minimum target is 2,508.
Depending on the time frame we are examining:
Time frame: March 10, 2009 ( 1,463 ) ~ May 5, 2008 ( 3,270 )
Fibo 50% = 2,400 ( round number )
Fibo 61.8% = 2,600 ( round number )
Time frame: March 10, 2009 ( 1,463 ) ~ Oct 10, 2007 ( 3,906 )
Fibo 38.2% = 2,400 ( round number )
Fibo 50% = 2,700 ( round number )
Based on the above, 2,400 appears to be a critical level that STI must break. Once this level is taken, 2,500 appears to be safe ( A-triangle target ). Thereafter, 2,600 ~ 2,700 will be very critical again.
In any case, STI has risen 892 since March 10. Momentum indicators are beginning to show signs of bearish divergence. As the index climb higher, it is wise to reduce exposure and hold cash. The Fibo levels above are only probable guide, the market can reverse anywhere it likes!
Depending on the time frame we are examining:
Time frame: March 10, 2009 ( 1,463 ) ~ May 5, 2008 ( 3,270 )
Fibo 50% = 2,400 ( round number )
Fibo 61.8% = 2,600 ( round number )
Time frame: March 10, 2009 ( 1,463 ) ~ Oct 10, 2007 ( 3,906 )
Fibo 38.2% = 2,400 ( round number )
Fibo 50% = 2,700 ( round number )
Based on the above, 2,400 appears to be a critical level that STI must break. Once this level is taken, 2,500 appears to be safe ( A-triangle target ). Thereafter, 2,600 ~ 2,700 will be very critical again.
In any case, STI has risen 892 since March 10. Momentum indicators are beginning to show signs of bearish divergence. As the index climb higher, it is wise to reduce exposure and hold cash. The Fibo levels above are only probable guide, the market can reverse anywhere it likes!
Below is an excerpt from a book I am currently reading called "The New Market Wizard" by Jack Schwager "Patience was an element that a number of the super traders stressed as being critical to success. James Rogers said it perhaps most colorfully, "I just wait until there is money lying in the comer, and all I have to do is go over there and pick it up. I do nothing in the meantime." In essence, by not wanting to trade, I had inadvertently transformed myself into a master of patience. By forcing myself to wait until there was a trade that appeared so compelling that I could not stand the thought of not taking it, I had vastly improved the odds."
PS: Stock that continued to look good to me for swing trade : IndoAgri !
Labels: Market Direction
posted by Market Wizards @ May 31, 2009
Comments: 2
