Regarding STI correction 100 pts in this week

[newbie_mc]

Dennis, just to check what is your view of this short term correction for STi this week from 3220 to 3100, is it good for singapore to come down before another rally, in mar to oct. What is the impact of this upcoming election? Another rally seen by the previous GE election? When is the time, signal given would you yourself transfer out all your $$ from the stock market? How do we know it? Thank for your wise answer.

[Dennis Ng]

Dennis, just to check what is your view of this short term correction for STi this week from 3220 to 3100, is it good for singapore to come down before another rally, in mar to oct. What is the impact of this upcoming election? Another rally seen by the previous GE election? When is the time, signal given would you yourself transfer out all your $$ from the stock market? How do we know it? Thank for your wise answer.

Hi newbie_mc,

STI now 11 Feb 2011 3 pm is trading at about 3,062.17 points, or down 41.22 points (1.33% today).

as long as STI stays above about 3,040 level, then it is still above the 200 day MA, which means the long term trend is still up.

Even in the last bull market from Year 2003 to year 2007, there was a 13.3% correction in STI in Year 2006, dropping from 2,650 to 2,295 level, but in the end, STI surged further in year 2007, to as high as 3,900 in Oct 2007.

Interestingly, the Asian stock markets have been falling the last few days becos of "interest rate hikes" by China. China Shanghai Stock market dropped but in last 2 days have recovered to above 2,800 level (shows that overall China stock market is still in an uptrend).

So despite STI falling over 100 points in last week, from a Big Picture perspective, NOTHING has changed yet (ie. the Major Trend has NOT reversed from uptrend to downtrend).

So I will only worry if STI break below 3,000 level (200 day MA) and does NOT manage to recover the level soon after breaking below.

Traders might panic and cut loss in the last week or so. For me, I did NOTHING at all, except for selectively adding on (buying more) of some of the stocks I have (all these stocks already mentioned in the forum).

Hope the above clarifies.

As mentioned, one of the most difficult thing to learn in Stock Investing is psychological control (self-control). How to try to be as emotionally detached as possible to our stock portfolio. Not getting overly depressed when prices fall and not get overly excited when prices rise. Actually, the last week market movements is a very good learning opportunity (experience) on how to have psychological control.

I encourage everyone to write down your thoughts as each day unfolds, so that you can then learn from this experience when we all look back again in future (maybe 1 year from now).

Interestingly, many like to call me to ask me whether can buy stocks when prices move up. They are very scared and don't dare to buy when prices fall.

"Invisible hands" are smart, not dumb money. When the overall market weak, they will also let their "stocks" fall in prices, they won't try to move against the market.

To be successful in the market, they know a simple way is to "go with the flow", so they will only start the Last Rally in "their" stocks only if the overall market start the Last Rally.

In my opinion, Singapore stock market has NOT really started the last Rally, it would have really started if STI break above 3,300 level convincely...and my view that STI might break new record high of 3,900 and may even exceed 4,000 level has NOT changed despite the market fall in the last week or so. In fact, I started to have this view as early as 6 Oct 2010, (4 MONTHS AGO!) when I wrote an article talking about this "prediction" in an article published in My Paper.

[AndrewNg]

In my opinion, Singapore stock market has NOT really started the last Rally, it would have really started if STI break above 3,300 level convincely...and my view that STI might break new record high of 3,900 and may even exceed 4,000 level has NOT changed despite the market fall in the last week or so. In fact, I started to have this view as early as 6 Oct 2010, (4 MONTHS AGO!) when I wrote an article talking about this "prediction" in an article published in My Paper.

Hi Dennis,
I can only manage to get up to 5 years of chart from tool like yahoo finance and share investor. Where do you obtain the data for up to 2003 ?

How do you arrive at the figure of 3300 to represent a last rally in STI ? Is it some extrapolation from TA theory ? If yes, which theory and which period is used ?


regards
Andrew

[Dennis Ng]

In my opinion, Singapore stock market has NOT really started the last Rally, it would have really started if STI break above 3,300 level convincely...and my view that STI might break new record high of 3,900 and may even exceed 4,000 level has NOT changed despite the market fall in the last week or so. In fact, I started to have this view as early as 6 Oct 2010, (4 MONTHS AGO!) when I wrote an article talking about this "prediction" in an article published in My Paper.

Hi Dennis,
I can only manage to get up to 5 years of chart from tool like yahoo finance and share investor. Where do you obtain the data for up to 2003 ?

How do you arrive at the figure of 3300 to represent a last rally in STI ? Is it some extrapolation from TA theory ? If yes, which theory and which period is used ?


regards
Andrew

Hi Andrew,
I subscribe to shareinvestor Standard Membership (pay about S$12 per month) and can get up to 20 years' chart, not sure why yours is 5 years, unless you subscribe to too basic a plan (Fundamental Plan).

The previous Recent high is about 3,310 level in Nov 2010, so roughly this level (about 3,300 level) is seen as Resistance level, if it can break through this, then likely to have further upside.

All these are taught by Yip Khiong in the Technical Analysis section in our Secrets to Making Money in Stocks Seminar. Please refer to your notes if in doubt.

Read and re-read your notes, I don't want to repeat things already mentioned in our notes.

[AndrewNg]

Thank Dennis for the clarification. Think i subscribe to the most basic plan which explain why i can only have up to 5 years.

As for the last rally, I was studying STI and trying to map it into the 5 waves of a bull run mentioned in the forum. I trace STI to the end of the bear market and the bull starts around Feb 09 but couldn't identify which wave this year STI is at. That's why was wondering how to arrive at conclusion that this is last rally. Maybe i try to re-read the forum on that part again.

In my opinion, Singapore stock market has NOT really started the last Rally, it would have really started if STI break above 3,300 level convincely...and my view that STI might break new record high of 3,900 and may even exceed 4,000 level has NOT changed despite the market fall in the last week or so. In fact, I started to have this view as early as 6 Oct 2010, (4 MONTHS AGO!) when I wrote an article talking about this "prediction" in an article published in My Paper.

Hi Dennis,
I can only manage to get up to 5 years of chart from tool like yahoo finance and share investor. Where do you obtain the data for up to 2003 ?

How do you arrive at the figure of 3300 to represent a last rally in STI ? Is it some extrapolation from TA theory ? If yes, which theory and which period is used ?


regards
Andrew

Hi Andrew,
I subscribe to shareinvestor Standard Membership (pay about S$12 per month) and can get up to 20 years' chart, not sure why yours is 5 years, unless you subscribe to too basic a plan (Fundamental Plan).

The previous Recent high is about 3,310 level in Nov 2010, so roughly this level (about 3,300 level) is seen as Resistance level, if it can break through this, then likely to have further upside.

All these are taught by Yip Khiong in the Technical Analysis section in our Secrets to Making Money in Stocks Seminar. Please refer to your notes if in doubt.

Read and re-read your notes, I don't want to repeat things already mentioned in our notes.

[Dennis Ng]

Thank Dennis for the clarification. Think i subscribe to the most basic plan which explain why i can only have up to 5 years.

As for the last rally, I was studying STI and trying to map it into the 5 waves of a bull run mentioned in the forum. I trace STI to the end of the bear market and the bull starts around Feb 09 but couldn't identify which wave this year STI is at. That's why was wondering how to arrive at conclusion that this is last rally. Maybe i try to re-read the forum on that part again.

Hi AndrewNg,
you mean you try to use Elliot Wave? Some call this the Idiot Wave, becos 2 persons will disagree on where exactly the 5 waves start or ends.

[AndrewNg]

Ok, maybe Eliot Wave is not really a good indicator of market last rally.

Do help to correct my analysis process below :

I went to the following site that is recommended in the forum:

http://www.asiachart.com/malaysiasing.html

I see from the chart that the support line is somewhere around 3000 which means no change in trend at the moment.

If it breaks below 3000, It is just correction as Shanghai and US is above their support line and price still above the 50 and 200 MA and 50 MA have not cut down cross the 200 MA.

As for conclusion that this is last rally, can i say that it is not really solely on charts but from combination of world economic views (shared in this forum) + chart showing it is slowly nearing the peak of 2007 3900 points.


regards
Andrew

Thank Dennis for the clarification. Think i subscribe to the most basic plan which explain why i can only have up to 5 years.

As for the last rally, I was studying STI and trying to map it into the 5 waves of a bull run mentioned in the forum. I trace STI to the end of the bear market and the bull starts around Feb 09 but couldn't identify which wave this year STI is at. That's why was wondering how to arrive at conclusion that this is last rally. Maybe i try to re-read the forum on that part again.

Hi AndrewNg,
you mean you try to use Elliot Wave? Some call this the Idiot Wave, becos 2 persons will disagree on where exactly the 5 waves start or ends.

[Dennis Ng]

Ok, maybe Eliot Wave is not really a good indicator of market last rally.

Do help to correct my analysis process below :

I went to the following site that is recommended in the forum:

http://www.asiachart.com/malaysiasing.html

I see from the chart that the support line is somewhere around 3000 which means no change in trend at the moment.

If it breaks below 3000, It is just correction as Shanghai and US is above their support line and price still above the 50 and 200 MA and 50 MA have not cut down cross the 200 MA.

As for conclusion that this is last rally, can i say that it is not really solely on charts but from combination of world economic views (shared in this forum) + chart showing it is slowly nearing the peak of 2007 3900 points.


regards
Andrew

Hi Andrew,
yes, it is NOT based solely on charts.

I arrived at this conclusion as you said having combining my analysis of world economic news and developments, including FA of stocks and overall markets, plus my years of experience in the market.

You're still thinking there is a specific formula in the market, there is NONE.

If there is, then everyone learning the Formula can be as Rich as Warren Buffett.

[AndrewNg]

Thanks a lot Dennis,

I am beginning to understand your constant drilling of no exact formula because of the many combination of conditions affecting price movement and these conditions are changing and unpredictable.

regards
Andrew

Ok, maybe Eliot Wave is not really a good indicator of market last rally.

Do help to correct my analysis process below :

I went to the following site that is recommended in the forum:

http://www.asiachart.com/malaysiasing.html

I see from the chart that the support line is somewhere around 3000 which means no change in trend at the moment.

If it breaks below 3000, It is just correction as Shanghai and US is above their support line and price still above the 50 and 200 MA and 50 MA have not cut down cross the 200 MA.

As for conclusion that this is last rally, can i say that it is not really solely on charts but from combination of world economic views (shared in this forum) + chart showing it is slowly nearing the peak of 2007 3900 points.


regards
Andrew

Hi Andrew,
yes, it is NOT based solely on charts.

I arrived at this conclusion as you said having combining my analysis of world economic news and developments, including FA of stocks and overall markets, plus my years of experience in the market.

You're still thinking there is a specific formula in the market, there is NONE.

If there is, then everyone learning the Formula can be as Rich as Warren Buffett.

[jamestai]

Hi,

I just want to do a sanity check here. I am not sure it is just me, I observe despite all the good earning report from several company in the last 2 weeks, it does not help much. The share price are still going down due to the bigger forces of negative market sentiment in STI. Do you all observe the same thing ? If yes this make me wonder even if the quaterly earning report from the company is good or outperform but the overall market is at down trend, it will not help the share price at all.

James Tai

[hahabear]

Hi James, I noticed the trend too. Regardless of Blue Chips down to Penny stocks, even if the company posted good financial results, it didn't help with supporting stocks prices at all, instead they continue falling. I read from Alvin Conrad that his opinion is HOT money flowing back into US economy, as with the better statitics reported in US, investors are placing their funds in Asia back in US.

[jamestai]

Hi Hahabear,

Thanks for sharing your observation. At least there is someone beside me has observe the same thing happening. I myself also heard from 2 persons mention about large fund flowing out of asia. If this is true, I wonder how much impact it would have on STI. It is very close to 3000 points now. If it break below 3000 pts I would be very concern. I am pondering some of the stock that I hold, instead of waiting for their quaterly result to be out, I should protect my capital as it does not seem to help much even if they report good profit. I am going to see what going to happen to Viking share price tomorrow as it just report outstanding profit. If the share price remain flat or even go down at the end of the day then something is very wrong.

James Tai

[loikm88]

Heard the same story from my broker today about the fund flowing out Asia. But, as the beginner, what are the indicator or report that I can refer to? Any advice?

[hahabear]

James, Thanks for your comments. Why not we wait till 18 Feb announcement about how our govt package is helping us to fight inflation, before we make a final conclusion on market trends? If things don't look well after 18 Feb, we have to make a quick decision to manage our stock holdings.

[jamestai]

Hi Hahabear,

Good advise, thanks!. Let's hope for the best

Lokim88, I cannot find any article or report mention about fund flowing out of Asia. I hope if someone else has any info, please share here.

James Tai