Tea with AK71: Feeling nostalgic.

Suddenly feeling nostalgic and I kind of remember that I lent the CDs to a friend. Not sure. The internet is a wonderful thing.  I found the songs on YouTube. Well, they are probably not everyone's cup of tea.  It's just like I don't really like Earl Grey.  Hahaha... For those who share the same taste as me, take a break and enjoy the songs.

A close friend:


Breaking up:


True love is like this:


On that steadfast note, have a great week ahead!

A correction? An opportunity!

With the significant selldown of the US markets last friday, what will happen to the STI? There are proponents of the decoupling theory and that the STI now takes its lead from the HSI and the SSE instead of the Dow.  So, maybe, the STI will be spared? Let's take a look at the STI's chart.

The STI closed at 2974.61 last, forming a spinning top. This indicates indecision. Indecision as the index is trying to move higher?  No good.  To be sure, the STI is in a down channel and has been so since mid April. The MACD has been declining and is pulling away from the signal line. The MFI has been forming lower highs. All looking very bearish.

The 20dMA which served as support until three sessions ago is now at 2,980. To resume the uptrend, the STI has to re-capture this support.  However, seeing how it failed in its attempt in the last session, this is looking less likely. Instead, a continuing move downwards is more probable.  The Bollinger bands are squeezing and this suggests an impending increase in volatility of the index.

One bright spot, the OBV turned up sharply in the last session. This suggests that there is strong accumulation activity even as the buying momentum declined.  In other words, there is some underlying support.  So, any decline in the STI should meet with some support as people who have missed out on the rally earlier buy on weakness.

In the event of a continuing move downwards, the rising 50dMA provides support at 2,900 while the rising 100dMA provides support at 2,860. I see a strong support at the 2,790 level (previously a strong resistance).  Yes, there is a chance that the STI might go that low.  Never say never, right?

I would refrain from purchasing any stocks for now, especially index linked stocks. Wait and see.

Related post:
Markets are going higher in time.