Updated: Mar 4
An interview transcript with Money FM 89.3 on 09 Apr 18:
The market has been very volatile and dynamic lately, things may change overnight, so instead of giving you a day-to-day analysis, I thought of giving you a more macro view using a monthly chart. Let me give a title to this analysis. It is called “STI 1,000 point range”.
Has our market experienced a bull market just like the US and China after 2009 low? Technically, studies shown our market has been oscillating between around 2600 and 3600 for the last 6.5 years.
Following is my illustration:
After the wall street melt down in 2008 and 2009, STI rebounded very quickly, hitting a high of 3314 and then retrace lower to 2522 in October 2011, and from there, our market has been oscillating or range bound between 1,000 points until today.
There were 3 waves within this 6.5 years. 2 up waves and 1 down wave.
The first up wave started from October 2011, and lasted for 3 years 6 months. Started low at 2522 and ended at 3550 in April 2015, this whole up range was 1,025 point.
Then the 2nd wave came, which was a down wave, and lasted for 10 months. Started at 3550 and ended low at 2528 in February 2016, this whole down range was 1022 points.
The last wave started at 2528 and lasted for 2 years. Technically, it seems to be facing with headwind lately, the high was 3612 in January 2018, and this whole up range was 1,084 point.
So what can we see from here? Yes, we are seeing a 1,000 point range since October 2011, a 3 years 6 months of 1,025 points up range, follow-by a 10 months of 1,022 points down range and lastly a 2 years of 1,084 points up range.
Studies indicated STI today is still hovering in the upper band of this 1,000 point range.
Though January high was 3612, however the “monthly” closing price in January, February and March were not too encouraging at all, at 3534, 3518 and 3428 respectively; off by quite a bit from the recent all-time high at 3612.
With US-China trade war and the rising treasury yield situation, technically, STI may still range within this 1,000 points band, and currently we are still in the upper band region.
For the market to break above and away this “STI 1,000 point range”, if, on any good developments, in the coming months, we have to continue to monitor it’s monthly closing price, it has to closed and stayed above 3612.
For the time being, I will prefer a more defensive play, rather than investing in stocks that is in tandem with our benchmark STI, this means, these stocks… are also hovering around in this upper band.
I would prefer those under-performing stocks or the laggard during the last 2 years, this also means a lower down-side risks for investors.
Studies shown both SingPost and Gold ETF are examples of such counters. Technical, both crossed and rested above it’s 40 period moving average very nicely on the weekly chart. It has also just traded and moved higher from its recent all-time low, this also means or indicating a re-new interest in them.
This is a transcript of an interview with FM89.3 Money FM on 09 Apr 18. Following the podcast: