Window Dressing
Window dressing lifted The Straits Times Index at extremely thin volume. The index is now retesting the resistance at Line B. A break above Line B will bring the index to retest the last significant high at 3,313. U-turn from here signal the likelihood to retest support at Line C.
The Index closed with a Doji candlestick today. A doji at resistance after several days of successive gains cast shadow on the stamina of the uptrend.
Labels: Market Direction
Straits Times Index - Retesting Support
The Straits Times Index appears to be tracing the right shoulder of a Head and Shoulder pattern. A break below Line C ( 3,120 - the neckline ) completes the pattern and look toward Line B ( 3,040 ) or Line D ( 2,910 ) as the next two major supports. A rebound from Line C may invalidate the pattern and take the index to retest the resistance of Line A.
The current market has very little incentive for a position trader to take up new long. The daily chart shows a probable H&S pattern while the weekly and monthly charts both show a prominent shooting star each. Both have bearish implication!
It is important to differentiate the time frame when we discuss about the market outlook. Most of the comments in my recent posts are applicable for position traders aimed at holding their positions for several weeks to several months. If you are a day trader, you are likely to have some positions everyday regardless of whether the market is up or down. The market may gain a few ten points on any day randomly but this is NOT what this post is trying to forecast about.
PS: I won't be able to access the market on Dec 20~27 due to Korea Holidays!
Labels: Market Direction
Market View
After breaking trendline "A" and found support at Line "C", the index return to touch trendline "A" again and thereafter loss ground on Friday moving toward Line "C". So far, all the moves have been typical textbook fashion per my post dated November 24. We are still looking at trendline "B" as the target for trendline violation.
If, however, the index managed to break above trendline "A" decisively this will invalidate the hypothesis
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Labels: Market Direction
