Bumpy ride ahead amidst US ATH and CN Market Instability
It feels like almost a déjàvu because the Singapore market has almost consistently be tugged downwards whenever there is a correction in the US market. On the other hand, China’s market is also upset due to regulatory adjustments to fit the national narrative of China. The truth is no one knows when the music will stop nor do we know when regulators will back off (momentarily or not). All we know is that the sentiments for both major economies are drastically skewed and irrational.
As for the Singapore market, we seem to be approaching a post Pandemic stage domestically however, there is still a lot of market uncertainty at the moment. Think about it, will you risk 100% capital for a 10-12% upside? Probably not, therefore we should be a little more sensitive and cautious and calculate the amount of upside or capital vested in the markets at the moment.
STI – Updated Daily Chart
Might be seeing another bounce but unless there is good news for other major economies, the STI is still not out of the woods. As we can see from the daily chart, STI is still weakened despite our border reopening plans.
STI – Updated Weekly Chart
The weekly chart shows that STI is resting on the 200 weeks moving average and that is probably the best news we can depend on for the week ahead.
Author’s Call as of 21st August 2021
- Market instability and uncertainty mounts but STI remains resilient for the moment because of our reopening plans
- 1H performance continues to outperform most analyst expectations although markets are not showing must positive price movements
- Weekly chart shows that STI is resting above 200 weeks movement average support level
- Start estimating potential upsides with significant risk will help determine if divestments are appropriate
Author’s Call as of 7th August 2021
- Singapore is still facing new unlinked cases on a daily basis and we are relying on vaccination rates to keep severe cases low
- Death cases are climbing for the unvaccinated individuals
- We are still expecting STI to stay on the uptrend as many companies are showing a rebound in performance compared to pre-pandemic period
- Looking at the current market conditions, STI is still poised for a further climb in the coming weeks
