A Trader's Journal
The STI continues to drop and broken the support of 3065 – 3080 after a few attempts. The next support is the 3,000 psychological support. From the weekly chart, it seems that STI has broken the long term uptrend line and is on its way down. From the momentum of the weekly chart, breaking of the 3,000 mark soon is definitely possible.
Update on 28 Aug 13
The day’s low was at 2,990. The down momentum is unstoppable. STI will be down for a long time to come. Look at the next supports.
DJ respects the lower channel support line and bounce off. It seems like the MACD is crossing its signal line soon.
Update on 28 Aug 13
The lower channel support line has been broken. DJ will continue its way down.
After FOMC announcement on 21 Aug 13, DJ has dropped about 100+ pts on that trading day.
Currently, DJ is approaching its trendline support. If this support is broken, we are looking at support 2 and 3 at 14,640 and 14,360 respectively. MACD is still negative and there is no sign of crossing its signal line yet. Investors are urged not to long DJ but wait to see how the index behave when it reaches support.
If you are to observe, the previous resistance of 15,600 mentioned 24 May 13 posting was not broken in Aug 13 when the index attempted to make new high.
Update on 22 Aug 13
STI gap down and is trapped within the support 2 zone of 3,065 – 3,080. This shows how accurate is the support.
Looking at the rate, the support 2 will likely be broken soon.
STI dropped 80 points within 3 days and landed exactly on the supported at 3,125. For those who had shorted intra-day, Good for you. As a risk management technique, do cover most of your short positions before the FOMC announcement as news play is always risky.
If things decided to turn real bad after the FOMC announcement, the further drop will be quick and fierce. After some analysis, the next few supports level are indicated in the chart. Look for market reaction near the support and resistance.
Update on 22 Aug 13 @1.45pm
STI gap down and is trapped within the support 2 zone of 3,065 – 3,080. This shows how accurate is the support.
Looking at the rate, the support 2 will likely be broken soon.
Due to the concern of QE tapering, the STI ended the week with a breakdown below 3,200, below its trading range. However, the candlestick seems like a doji with indecision on Friday 16 Aug 13. It is good to observe for a couple of days more next week to ensure no false breakdown due to market over reaction to news. If it is false breakdown, one may enter for buying opportunities. However, if the breakdown is confirmed, then the next support will be at 3,125. Short term traders will need to exit their trading range play. Aggressive traders can go for shorting intra-day while more conservative traders can wait to see how the index react near its next support.
Economic data shows that the world’s leading economy is improving and several economists believe it is ready for a cutback in monetary stimulus. However, critics say that this could lead to a detrimental knock-on effect for emerging markets.
A cutback in QE would raise bond yields in the US, which in turn would raise eurozone rates and suck out money from emerging markets. A sudden withdrawal of foreign funds from emerging markets could also be catastrophic, which has happened before, during the Asian and Russian financial crisis of 1997 and 1998 respectively.
– by M Rochan, International Business Times
July 18, 2013 10:14 AM GMT
photo credit: Shutterbug Fotos via photopin cc
Comments the same as last posting. Consolidation persists. Coming long holiday.
Jayson's Financial Trading 