Are the markets crashing?
As mentioned in several occasions previously, Nikkei has gone up nearly 70+
percent from Nov 2012 to May 2013. Similarly, Dow broke-above to new historical
high is Feb 2013 and has also advanced nearly 20 percent from Nov 2012 to May
2013. Intermediate pullbacks are to be expected
within an overall longer-term advance. Are recent pullbacks a much-needed
pause, from which advances will continue? We can only be sure only when the
markets starts moving up again.
For the STI, it broke (6 weeks ago) to above recent congested area (please
refer to attached charts) and has since pullback to below 10wk MA and to near
previous break-out levels. Though it has to be highlighted that 40wk MA is
still pointing upwards (what is the implication of this
observation?)
What are we to do now?
It would perhaps be prudent to assess whether your individual counters have
been performing relatively "stronger" or "weaker" when compared to the general
market action. Did our individual counters moved more or less than the market
advance or had actually be declining in price?! Which have been the stronger
names that moved much much more than the general market these past several
weeks?
Perhaps this ensuing pullback/base-building could provide the opportunity
to scale-out of lesser-performing counters and to re-position into stronger
names when the markets decide to start moving again. Raise some cash, be ready
to re-deploy to stronger names?
Oh, Shanghai has been out-of-the-limelight but has been able to holding up
very well these past weeks despite all the 'attention' on other markets.
Maybe pay some attention to Shanghai (China)/ HK? Action
switch to China/HK in coming weeks?
