Trump’s declaration of National Emergency did the trick?

With technical analysis rendered almost useless to spot any support or resistance, the market was indeed free falling. Apparently, the Covid-19 fears and its impacts on the supply chain has led to a bear market as it is now confirmed. However, with the sudden spike of more than 9% for US indices at last week’s closing, it is hard to tell if the bear market has started to lose steam. This came right after the announcement of a national emergency from Trump and the Fed pumping 1.5 Trillion in to the market. As we all know, this is also inline with the agenda at stake for the US such as the upcoming elections. Either way in today’s market outlook for STI, lets see if we can spot any signs of a trend reversal in the coming week.

STI – Updated Monthly Chart

STI closed at 2634 after abruptly touching the lows of 2510 on the same day. Such volatility and rebound might be able to show signs of support by the Monthly horizontal support levels. This provided a huge amount of confidence to many investors and traders. As a matter of fact, This jump was also supported by US announcements and therefore SG closed with a solid doji with long wicks on either side signifying that though buying pressure has won for the day, sellers and skeptics are still on the lookout for further downsides in the market.

Today there will be only be a macro view in the post because all other indicators has failed to provide any clear indication of a further drop or support. Nevertheless, investors should still accumulate stocks which will survive this crash and are paying decent dividends to fully utilize the downsides presented.

Author’s Call as of 15 Mar 2020

• STI fall yet again but at the week’s closing it crossed the major horizontal support briefly and bounced upwards
• STI might still experience high volatility due to the instabilities of the US markets (VIX still above 50 atm)
• We can look at the coming days and weeks to see if there are any “good news” or bad ones that can trigger further downsides or a potential recovery
• Every market crash does not last long but it will usually feel longer than you would like it to so please practice caution and consider your time horizon before buying large tranches.

Author’s Call as of 08 Mar 2020

• STI continues to weaken, Fed rate cut pushes our biggest STI constituents down (DBS, UOB, OCBC)
• Sellers continue to outweigh buyers last week, awaiting more developments for Covid-19 measures around the world.
• STI next major support levels at 2700 according to fibo retracement levels on the monthly chart
• Accumulation advised for investors with a longer time horizon
• If VIX levels continue to increase, do widen the gaps between each tranche to minimize potential paper losses