In the review for week ending Fri, 31 May 2013, it was noted that Dow
dropped 208 points during the previous Friday. On the most recent Friday (7
Jun), Dow advanced 207 points. What to make of this?
As we have been noticing, US markets have been leading the world markets
since the 2009 bottom (and is likely to continue out-performing). On the other
hand, Singapore and HK have not held up too well lately.
As seen from attached charts, STI has given back all the gains built up
over 5 months, in 3 short weeks. This tells us that sellers are currently in
control and as as we have noted, highlighted in last week's update, and continue
to emphasize: IT IS PRUDENT TO STAY DEFENSIVE, LOCK-IN
SOME PROFITS, CUT LOSSES, AND NOT BE TOO EARLY INTO NEW
BUYING
Be safe. Take defensive action, and stay aside first.
After 3 weeks of selling, some rebound can be expected but resumption of
uptrend would only be affirmed STI recovers above 10wk MA and this MA line
starts turning up again (we do not have these yet)
When will this pullback end? At what level will it end? We do not know
and do not anticipate; eventually when the STI shows signs of stability and
wanting to u-turn upwards again, we can
then act accordingly.
Meanwhile, keep abreast of the market action to monitor names that can hold up 'better', names that do not correct as much as the rest during this down-draft. These 'stronger' names could do better than the rest when overall market recovers and it will be worthwhile to start watching for the potential next winners...
STI Weekly Chart: Week ending 31 May 2013
STI Weekly Chart: Week ending 7 June 2013
United SSE 50 Weekly Chart: Week Ending 7 June 2013
