Market Diary:
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Sunday, November 29, 2009

Dow Jones Industrial Average

Global indices plummeted on November 26 & 27 on Dubai’s proposal to delay debt repayments triggering a run for safety to bonds and credit swaps.

Dow was closed on November 26 due to Thanksgiving holiday. It reopened half day on November 27 and plunged by 154.48 points or 1.48%. Hang Seng was downed by 1,075.91 or 4.84%. STI was closed by to Hari Raya Haji holiday.

On the chart, a bearish divergence between RSI & the underlying price trend has developed since August. Although the uptrend is still intact, the bearish divergence is sending us an early warning that the potency of the uptrend is in question!

Since early September, Dow has developed a “cycle” that ties to the calendar month ( see blue arrows ). The cycle low is at every calendar month end. If this is true, then we are now at the cycle low and may see Dow retesting the up trendline, which is at 10,000 in the coming week.

Locally, while many analysts believe STI was salvaged by the public holiday from a blood bath. I remain skeptical because STI has a track record of being unforgiving. I have been very mindful about the RSI bearish divergence for a long time. However, as a trader, we trade what we see and not what we think. Therefore, despite the RSI warning, there has been regular buy calls. The important thing is once we are wrong, we get out. If not, we may end up staying at the sidelines 10 months out of 12 months.


Wednesday, November 25, 2009


ChinaXLX broke a down trendline and a resistance today and rose by 13.75%. The hourly chart is still bullish. If all goes well, there might be one more day of action pushing the price toward $0.50 before profit taking set in.



If ( and only if ) YZJ is able to break the resistance at $1.21 as shown, there is a chance to head toward $1.45 ( of course won't be in a straight line )....


Tuesday, November 24, 2009

Dow Jones Industrial Average

The current level where DJIA has traded is around Fibonacci 50% retracement between Oct 10, 2007 high and March 10, 2009 low. As seen from the chart, there is a bearish divergence spotted in RSI from Aug ~ Nov. Both observations combined send us a warning signal that DJIA may be facing some head wind.
According to the text book, November/December are strong months for the stock market. I don't know how true it is in this case. A break above the current level will see 11,300 on the cards. Conversely, a break below may destroy the up trendline and lead us to 9.400.



Once a market darling, Yanlord has entered into a bearish bias sideways consolidation since Aug 5 ( $2.89 ). The counter has recently broken a trendline support ( blue line ), and is currently near a key support at $2.15. There seem to be a descending triangle ( black lines ) at work with which the neckline is $2.15. Once this level is taken decisively, a new short will be triggered. If the descending triangle is genuine, the target is $1.41. Personally, I can't believe this is true based on conventional wisdom. But this is what the chart is telling me subject to my interpretation is correct.


SembCorp 1st Target Reached

Ref my post on Nov 19, 1st target at $3.82 met !


Sunday, November 22, 2009

Straits Times Index - Caution Sign

Despite that STI was able to break the up trendline convincingly on last Monday ( Nov 16 ), the index is now hoovering at a multi-years resistance. RSI has shown clear sign of bearish divergence. These are definitely some caution signs good for reference!


Thursday, November 19, 2009

SembCorp Breakout

Just returned from a business trip to Shanghai ! Unable to make any post from China as they block blogspot & Facebook...etc.


Friday, November 13, 2009


[4:20pm] Look up for action when it breaks $2.65 successfully! I don't think it will take place today though!


Thursday, November 12, 2009


Many people have nailed Cosco to the coffin lately and think that it will fall to 90cents in no time. One of my remisiers has even recommended to short this counter two days ago at $1.05. However, Cosco is one of the 187 gainers who buck the trend today and broke a sleep down trendline with substantial volume. While I am not saying it is out of the wood yet (unless it continues to edge up and break the flatter down trendline), the momentum indicator and MACD have certainly show signs where the bull is struggling to fight back. The bull will gain back its power only if prices break above $1.2, which is the flatter down trendline !
PS: Most of my posts tend to provide very early alert versus many renowned trainers in the market, which tend to provide hindsight view as a teaser for their courses. The trade off is the probability as technical analysis is not infallible.


TechOil&Gas Breakout

[3:15pm] TechOil&Gas breakout from .55 this morning and hit .58 intra-day with relatively high volume. It has retreated back to .55 by 3:15pm due to poor broad market sentiment where the index fell back 21 points. If it is able to close somewhere around .57 today or within the next 1~2 days, there is a good chance where it will head toward .60 ~ .62 in the near future. Conversely, if it closes below .55 and won't look back. This signify a sign of rejection and may fall back to .50.
One observation I have made, TechOil&Gas seems to be moving in tandem with Longcheer. There is no technical ground but it has been quite true so far.
[6:30pm] Too bad, it closed at .545 with a Gravestone doji candlestick. Technically, this is bearish.


ST Eng Updated Chart

Ref my last post on ST Eng in regard to the possible bull flag, it has broken out nicely since then. ST Eng is one of the counters adhere to chart patterns very well. The worst one is SingTel in my opinion.


Wednesday, November 11, 2009

Straits Times Index

As evident by the much fewer posts I have made lately, I have been very busy engaging in a project.

Contrary to the pessimists who have called for a market top for weeks, STI closed 1 point above the last significant high of 2,739 ( October 15 ). What is interesting is that one of my trading systems has shown a buy signal yesterday and the signal was triggered today:

After closing higher three days in a row, it is reasonable to expect some profit taking especially where the index is touching the trendline resistance. Regardless of whether the profit taking, will take place tomorrow or slightly later, we need to watch whether STI is able to break the upper trendline decisively. I am still apprehensive on whether the two converging trendline is a ascending triangle or a rising wedge!


Tuesday, November 3, 2009

SGX & ST Eng Updates

SGX did not give us the confirmation we need for the reversal. The doji at star position spotted yesterday was near ideal but market decides otherwise. SGX has been viewed as the barometer or leading indicator of the Straits Times Index. It has been traded below 50 days simple moving average for a while and right now refused to confirm the doji star and touching the down trendline. We need to watch carefully will it be breaking the down trendline in the near future. If the down trendline is broken, it is wise to stay defensive in line with the Elliot Wave count.

ST Eng did break out of the bull flag today.



I agreed there is a buy trigger at $1.08 today, targets $1.17. If able to break $1.20, can look forward to $1.28 ~ $1.30.


Monday, November 2, 2009

ST Eng

There seems to be a bull flag chart pattern as shown. If prices break above $2.93, the bull flag is probably valid. The Ascending Triangle in the chart was first spotted on Sept 8....
As usual, a chart pattern is not valid until it has successfully broken out !



I always like this type of candle after a prolong uptrend or downtrend. Although not infallible, it is giving hope of a reversal. Confirmation is needed .....


Reversal In Progress (UOBKH)

Something new show up in my Elliot Wave chart today. The numbers 3, 4 & 5 are the target ( if my chart is correct ) :

The below is from UOB Kayhian. They have moved their research report link to the client area only assessable by clients. So I thought it is useful to post a copy here:

Technical Analysis
Reversal in progress - UOB Kayhian
The pullback in equity markets should not come as a surprise to investors. We had been warning for some time that equity markets were showing clear signs of top formation. For the US, we had stated the DJIA was expected to trace out in a rising wedge formation and suggested a move towards 10,000 as the final 5th wave of the wedge formation. That has materialised and the index has also broken out of the wedge formation. There is an early indication that the uptrend from Mar 09 has now ended. Pullbacks from rising wedge formations should be swift and we estimate significant support at about 9300- 9340, a 38% retracement zone.
We had also opined that the FSSTI was likely to head towards 2,730 in an anemic breakout and then swiftly retrace. That has also materialised with the index heading to 2,739 and swiftly retracing. We now expect the index to head towards 2,480-2,500 before a minor rebound sets in.

I will post my own analysis & view separately !


Sunday, November 1, 2009

Volatility Returned

Dow Jones Industrial Average:
Volatility returned to the Wall Street ! Dow lost 249 points on Friday and closed October with a Doji candlestick signaling indecision.

The long term up trendline is still intact but we are getting too close to the trendline for comfort. Chances are the pull back from 10,157 on Oct 20 to Friday intra-day low of 9,664 is a healthy retracement but if the up trendline breaks then we can expect 9,400 next.

Straits Times Index:
On October 15, STI broke the resistance at 2,707 and hit a high of 2,739. Unfortunately, it has immediately fallen back to the trading range. Similar as Dow, October monthly candle was a Doji signaling indecision.

The symmetrical triangle that I have suspected appear to turn into a bearish wedge instead. With Dow losing 249 points, I can't think of any reason where we could avoid a blood shed tomorrow. Immediate support is 2,605 and 2,575.