Tuning to the market

My boss and my colleague both happened to be on leave today and my Engineers are on auto-pilot. They are most of the time because they know what to do. As for me, I have this meeting with my colleagues overseas for more than 2 hours in the afternoon and contemplating what to do in the morning. As I looked at the Excel sheets on components list, I really feel disgusted because there is no standardization of the part number naming process.

While I feel lousy on job, the stock market gives me a pleasant distraction. For some reason I have been liquidating my portfolio, I liquidated Creative ( not at the highest but with a small profit) 2 weeks ago while Tiong Woon end last week when it reached my objective. By today I was left with 2, they failed to move last week. For some reason, I did not like the moves on these 2 stocks lately. One has broken the support line while the other seems to be creating a Tri-star pattern. I liquidated both stocks in the morning, one of them right after I have paid my broker.

It was not until 4PM that when I have my very short coffee break that I get to know how terrible the day has been. STI dropped 78 points! I was like wow! As for the 2 stocks that I liquidated today, one slided further down and reached my stop loss level while the other completing the final part of the Tri-star pattern (well, still need a confirmation tomorrow). I will share about this stock later.



Fig 1 STI Weekly chart

Fig 1 is the STI weekly chart, just for the benefit to those charts fanatics like me. I assume those people at CNA forum will be yelling blood, sea of red, dooms day stuffs there and prophecy of market crash. Indeed SSEC has also witness a tremendeous drop today and went beyond my second predicted 500 points drop(?).

Still I do not see the devastation. It is still a correction. Now the only thing I can't really figure out is the wave count（功力不够）. It seems like this is the completion of one bul run, I have a 5-wave count completion. At the same time, the fibnacci still pointing me to 3809 for 5th wave completion.

There is a chance that the wave have not yet completed, but it has to depend on next week and in hope that this week is range bound between this 78 points. I next week is a bar up, it would create a "rising three method" base on Candle stick. With the Three white soldiers done during the last few weeks there should still be some room to move still.

What I can see is a double top on RSI. I did recall my teacher taught me about RSI able to create reversal pattern, he only mentioned about Head & Shoulder but not double top. RSI is now at neckline below the 80% mark. I won't have much hope for a reversal unless my expectation for next week happens, which is likely to cause RSI to reverse up but would result in a divergence.

On a side line, I do have a threory about why the market falls today. I have long believe that the best indicator of market is none other than our Prime Minister and Minister Mentor. The last round MM Lee mentioned that the market supported the election result, it led other indices for a South Pole exploration. While every time our PM Lee said that market is bad, the market rallied, when ever he said the recession is over, market again headed for the South Pole.During March time this year, PM Lee mentioned a long way ahead before recovery, and the market started to rally.

This time round is no exception, The market turned South on the week after National Day Rally. If the market experts are already so bad in predicting the market, would our ministers do a better job? Of course, all these are just my own observation and should only take as a reference and not absolute. I am thinking, may be just for Singapore sake, PM Lee continue to be pessimistic about Singapore Market? Then probably STI will start climbing Mount Everest?