Market Update
The stock market has taken a beating (or many beatings) since the start of the year. From the STI index itself, 3 years of gains have been wiped out. Those who bought at the top since October 2007 are bleeding from the losses.
There were several buy calls in the March to May period due to STI rebounding from the 2800 level. But that did not hold when the index broke that level in August. Particularly, investors who held confidence in China equities were dismayed that the Olympics did not manage to buoy confidence in the markets. Shanghai Index dropped more severely much to the chagrin of financial advisers who called out for good valuations months back. Indeed valuations are attractive, but sentiments rules the day.
STI’s index is in the midst of a downtrend channel, recently just rebounded nearly 4% after touching the base of the channel. However, investors are cautious as seen by the low volume. MACD affirms the downtrend.
2 triangle formations are seen in DOW and its RSI. Volatility in the recent days might continue with a huge break with no clear indication of an upside or downside. Recent fundamental news suggests a breakdown.
