Trump delayed the US’s Santa rally without spoiling the mood

After agreeing on the supposed last relief package in the US, Trump decides to delay the signing of the bill and make history again. The interesting is that the economy was not as fragile as I thought as it did not retrace in any significant way throughout the week. In Singapore, our index was also consolidating sideways for the past few weeks signaling another round of consolidation instead of moving either direction. Since it is going to be a short week again before the end of the year, we should not be expecting major reactions in the coming week. At this week’s closing, we saw a slight optimism on the STI which is common before the end of year holidays.

STI – Updated Daily Chart

STI gapped up slightly on Thursday morning and showed some optimism before closing between the 9 and 20 days moving average. This is partly due to the delayed signing of the US relief bill as there will be people worried about a correction if Trump decides to partially shut down the Government to “get what he wants.” With Biden in the picture, the world seems to take a calmer stance this time and many are hoping that the rally on their index continues in the new year.

STI – Updated Monthly Chart

STI is known to be slower and more stable than other indexes not solely because our companies are not performing as well as their global counterparts but also because we discourage small volume trading because of high commissions. Rest assured that if the country continues to keep the virus in check, the rebound in 2020 will be a significant one. Not to mention if we can become the vaccine hub of South East Asia then our appeal to other nations will be sure to increase and be beneficial to our economy.

Author’s Call as of 27th December 2020

• Holiday mood strikes again with lower trade volumes and a slight increase in optimism
• Trump’s delaying of the Covid relief bill dampened the spirits of the markets but did not trigger a sell-off
• Virus outbreaks around the world have become old news even for new clusters and potential lockdowns
• The global economy continues to trend cautiously at the moment as the new virus strain threatens the efficacy of the vaccine

Author’s Call as of 20th December 2020

• Good news and positive sentiments are all priced in hence the consolidation
• late coming investors are still rushing in for a bargain while institutional investors are selling for a profit
• MACD on monthly chart signals the first trend reversal since August 2019
• Value of STI constituents are starting to surface as price stabilizes