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!
PS: I won't be able to access the market on Dec 20~27 due to Korea Holidays!
Labels: Market Direction
posted by Market Wizards @ December 19, 2010
Comments: 0
