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STI Market Updates

STI Market Updates

E.Y.E ATA MARKET OUTLOOK (25 Jul - 31 JUL)

Hi traders,
Market has been quite boring of late but something interesting has developed. Looking at DJ, we can see that there is at FAILED head and shoulder pattern (circled red). A failed pattern is normally a strong indication that the reverse of what the actual pattern predicts will occur. Which means, if the head and shoulder pattern is successful, the DJ will fall sharply. But in this case, it failed and rebounded sharply. Going by the failed pattern logic, DJ is expected to head upwards.

However, one thing to note is that the recent mini uptrend is on relatively light volume; most of the days are under the volume 14-day-MA.

Another point is that the STI gapped up by more than 20pts on Friday’s opening  to break the 3000 barrier only to fall back down by 30pts by closing time. This may be the Friday effect or it may be that the rally—starting in June—is running out of steam and hitting resistance at around 3030.

Thus, I think it would be wise to wait till the 10600 level and the 3030 level to be broken on DJ and STI respectively before entering. Where the DJ leads, the world follows. 

Market Update (26/07)

Hi traders

Here are some sharing of some of the currencies movement.

US dollar – weaken

Reason

1. The consumer confidence index for July came in at 50.4 which are lower than of June which is at 54.3. This happens despite the fact that corporate profit rise.  This show that the economy is heading for a slower growth in the second half and this will affect the currency.
2. The recent durable good order fell 1.0 percent in June while the analyst expected a 1.0 percent increase. 
3. The dollar was consider to be overbrought about a month ago and is expected to be due for correction. 

Euro dollar – unchanged.

There are a few events to lookout for that might affect the euro dollar

1. The IMF and the EU had abandoned talk with Hungary regarding a 20 billion euro rescue package. The country is also expecting a credit rating downgrade by rating agency. Even though Hungary is not using the euro dollar but it can also affect the euro.
2. Europe had been a major import driver from Germany, China, Japan and USA. However recently events had force Europe to tighten their fiscal belts and this cause growth throughout Eurozone to fall dramatically. Germany which is a major surplus country in Europe will need to look for elsewhere to take its export as currently 50% of its export went to Eurozone. How Germany is going to perform will have an impact on the Euro.

Yen – Growing                                                                                                                                                    

However there were worries that Yen seems a bit too high.

STI Market Outlook