STI recovery

Monday close: 2946.78

Tuesday open: 2952.95

Low: 2945.37

High: 2970.44

Closed: 2969.73

STI did a rebound after HSI gained strength in the afternoon. It closed 2969-70 which is where the daily 20MA is. I previously had a support line at 2940 but it didn't reach that low before it rebounded.

One possible reason for the rebound could be because of month end window dressing. 

Do note however, that the volume was larger than Monday's. When a day's sell down happens on thin volume, it usually confirms the trend is up. But in this case, I'm not so sure due to the month end effect.

Trade safely.. I'm still sitting on cash and just tikaming some index futures on an intraday basis.

Fibonacci retracement (used in opposite fashion)

A friend pointed out to me that I have been plotting my fibonacci retracements in the opposite way. (ie 0% and 100% should be drawn opposite ends)

I have checked with websites showing how it is to be drawn (ie from the top to the bottom for uptrends) and indeed I have drawn them in the OPPOSITE fashion. The difference in figures between drawing the opposite way is that the 23.6% and 78.6% are different. The key point of 61.8%  (which I use) is the same as 38.2%. drawn the right way. And of course 50% is always the same, no matter which way it is drawn.

The reason why I drew it this way was because of the Kim Eng workshop I attended some time back. The presenter drew it this way. The advantage that drawing this wrong way gives is that I have target prices which based on fibonacci, if the trend continues its way up or down after rebounding. This gives me 123.6%, 138.2%, 150% and 161.8% targets to look forward to. The presenter said that generally we should aim for 161.8%

Let me show you what I mean with the STI chart. 

I draw from the bottom during March 2009 and plot to one of the tops in June. (just an example).

Notice how the fibonacci points help to become target points? That's the reason I plot it this way. If I plotted it the Right way round, I wouldn't have projections. 

Of course, you should make your own decision if you want to follow the standard way to draw or the reverse way. It's ultimately each trader's opinion. Just be confident of what you draw.

Cheers!

Wilmar's big drop

This is Wilmar's daily chart. As to why there was a gap down and large selling pressure, please refer to their earnings report as well as checking with your own brokers.

Firstly, we have a big falling window between 5.78 and 5.35 (I only took into account the candle bodies). This will prove to be a major resistance going forward. It has also broken my 14 Ema, 20MA, 50MA, 200MA and currently closed sitting on the 100MA. Incidentally, this 100ma also coincides with my fibonacci retracement line at 50%. It has also closed below my trendline resistance from the peaks of Nov 2010, July 2011 and Oct 2011. Not surprisingly, MACD and Stocs are all cutting down after such a violent move.

Lets move on to the weekly chart. As you can see, this week forms a big black bearish engulfing. The only MA resistance left is the 200 week MA at about 5.17-18 which it bounced off today. The weekly MACD is not yet cut but it doesn't look good with such a big candle.

In conclusion, I expect more selling in days ahead. The 100 daily ma and 200 weekly ma should not be able to withstand the selling pressure. Target price will be firstly $5-5.02, and if $5 is broken, we would be looking to 4.75-8 region... Caveat Emptor.

PS: I tried to open a short position at closing but failed to match as I queued at 5.23. Thus I'm currently not vested, but may be interested in taking a short position tomorrow.

Update on STI 22 Feb

First off, we have an updated STI daily chart.

I have drawn a fibonacci retracement from December's low to the "possible" top yesterday (21 Feb 2012). Yesterday's candlestick was almost a doji and today's selldown with volume gives a greater possibility that a retracement is underway. I am about 65% confident that we are at the start of the retracement.

I have identified rebound zones to keep the bull alive. Namely 78.6% @ 2940 and critically 61.8% @ 2869. Breaking these, will suggest that the bull has weaken considerably and 50% may the last hope for a final hurrah.  Do note that to reach these levels, 200ma would have to be broken and generally breaking this MA is a signal for long term investors to sell.

Trade with care. I'm currently only have 25% of my capital in the market and have been sitting on cash this past week.

STI index charts for week ended 17th Feb 2012

I just decided to spend $60 to buy chartnexus's 1 year subscription for data of the last 15 years of STI...

I drew STI monthly chart with fibonacci... and guess what...

IT'S VERY BULL.......

Ok look at the monthly chart first... Elloit wave experts please comment... I only know the basics...

From what I see, we are in wave 5 ... taking wave 1 from Sept 1998.... and long wave 3 from Apr 2003 to Oct 2007... and the subsequent recovery from wave 4 (lehman bro's) at Mar 2009 being the start of wave 5

Note that all the turning points, wave 2 and wave 4 all have never exceed the lows in previous years... which is essential for EW theory. And Wave 3 so far is true in that it's the longest.
So with the theory... wave 5 is suppose to exceed wave 3 top (highest ever 3906.16 in Oct 2007).

Which brings me to my next point. Being fascinated, I drew a Fibonacci retracement from lows of 2009 (1455) to the high of Nov 2010 (3313).(the blackish brown lines), accurately reaching last year's rebound point of the crash around the 61.8% support to keep the uptrend. Based on what I have heard about fibonacci, the long term term is 161.8% for the ultimate target. I calculated and got 4460! (wtf! can reach so high ah STI.. with all this euro crap around). 
That said, all we need is the EW to clear 3906. That means a Fibonacci target at 138.2% is enough (works out to be 4021 and it's off the charts)
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Moving on to the weekly chart. I draw fibonacci from the base 2522 at October low to late october's top. Subsequently STI pulled back all the way until 23.6% in Dec. 
Now the short-mid term target is 161.8% at 3141. That was 3rd and 4th Aug's high....

Any comments from any experts?

Some light humor on the Euro-zone

After cutting some positions last Wednesday when STI started selling down, US index staged a one day recovery on Wednesday night.

This was what I Whatapp my friend on Thursday morning:
Me: Why can't it (the market) collapse like Lehman? LOL. I wonder if it would happen if another new country joins PIIGS (Portugal, Ireland, Italy, Greece, Spain if you didn't know what it stands for). Add Germany and England la. Make it PIGGIES!

Ps: this is just a joke. Of course i'm not hoping for Germany and England to join in. Was just pissed to be swung out of my trades.

An opening introduction

Let me introduce myself.

I'm a Singaporean, with a degree in accountancy, who was introduced into the stock market in late 2010. I was actually interested in the 2 main IPOs at that time. GLP and MIT. They gave me fine profits on my first trades even though I only got 1 lot each at IPO. What a way Mr Market does to entiice me to "join the party". As a result, I got interested in stocks. My gf's influence as a mid to long term investor also caught on to me during that period. I decided I wanted to grow my monies through other income apart from my salary.

I was subsequently introduce to my present broker through a friend and I started to learn more about the markets. I also began reading up on the different aspects of trading. Since I am accounts trained, I had the tendency to look at the company's accounts and based my trades on Fundamental Analysis (FA). However, I soon learned about Technical Analysis (TA) and all the support/resistance stuff. I began reading up and learning from forums on how to apply TA. Subsequently I learn about japanese candlesticks as well.

I must say that my 1 year odd of trading is in general, a negative returns investment. But I have learned along the way, experience how markets react on news and how markets react to natural disasters (Japan earthquake) during and after. I also had the "luxury" to experience the Euro Debt crisis as well as the American credit downgrade. I believe being part of all these difficult trading times, will help me in my growth to be better trader in the future. My broker said that I was lucky to experience this turmoil year when I just started out. And if I had started investing earlier in the bull run from 2009, I wouldn't have known how to react when markets turn choppy or turn down.

As such, I'm starting this blog to blog some charts as well as occasional interesting comments I come across in forums and news websites. Hopefully, we are all able to learn together as aim to be a better chartist.