One time dip or prolonged volatility?

The market reacted violently to the war that broke out in Ukraine as Russia forces try to seize control over the country. I will not take sides for obvious reasons but all I can say is that any form of unnecessary human suffering is unacceptable. As for the market, we saw a slew of panic selling and irrational price actions on Thursday and that could potentially be a good entry or re-entry point for many of us. On the other hand, was last Thursday’s dip the only one that will happen because of the war? No one knows but one good reminder for all of us is that we should always learn how to sell even when the market looks unstoppable in its ascend. In today’s market outlook, I will present my findings to support why the market is still obviously weakened and why we should still be wary about the current situation in the world.

STI – Updated Daily Chart

After Thursday’s dip, we saw STI fought back in the morning of Friday but thereafter losing steam nearing to the end of day. This is fairly normal because much of the world’s attention will be directed back to the US market where there are way more traders pushing prices in both directions. That said, being a conservative market, this war has potentially caused the STI to wait for further updates before it continues to climb. No doubt there will be another rally due to the US’s solid green candle on Friday but I am again unsure of whether it will last or impact the Singapore’s market as significantly.

STI – Updated Monthly Chart

I went back to the monthly chart this week only to show how the war has erased our entire month’s worth of gains in a single day. For those who are practicing HODL, perhaps this will be a good lesson for you to know when to let go and buy back rather than holding and ignoring losses due to opportunity costs over time.

Author’s Call as of 26th February 2022

• The correction did happen and this time the trigger was due to the war in Ukraine
• In the near term, we are unsure how this war will pan out hence, more time is required to know when STI will move up again
• The monthly chart showed that the gains in February was wiped out in the past week and might be ending the month with a weak candle
• Investors should have bought back stocks sold on Thursday when the market was in a panic state but stay cautious for the time being and expect more volatility in the near term.

Author’s Call as of 19th February 2022

• Expecting volatility and possibly a minor correction in the Singapore market
• Daily chart shows that STI just hit resistance near the marked level of around 3485
• The weekly chart look like it has just started a reversal after hitting the resistance at 3450 as mentioned last week
• Investors should have sold most of their holdings progressively in the past weeks, right now we should be planning our accumulation plans to get those stocks back at a discount.