A short break, and there are good and bad news on STI

It has been a while since I last up-dated my blog. In fact I have a pause since last wednesday. It was my youngest brother and the last of my family having his wedding, and he chose Hari Raya period to do so. I travelled back to my home land to attend his wedding, deliver a big Ang Pow and of course help out.

The wedding took 2 days because he could not book the banquet on 20th Sept 2009. So we have the day event on 20th while the dinner set on 21st. It was a grand event since my parents are business people. We have datok-datok and Datin-datin attending the dinner. Well, I wish them a happy marriage from here, though I still have one question in mind. How is it that my brother choose a girl with so much resemblance to my mother in attitude?

Another reason that I have not done any up-date was simply because there was no need to. What I have last entered still valid and the market went side way. I am still amazed that the newspapers still trying to support the theory that the market is recovering ( of course they may be right ). I personally believe (copy from Miss Teen USA, she really have a problem answering why only 5% of Americans can find USA on world map) there is limited up-side and there is a strong tendency for a correction. The market simply lacks wood to burn.



Fig 1 STI weekly chart

My last review indicated STI broken the Daily trendline but still supported (barely) by the weekly trendline. Well, base on what I see in fig 1, not any more. It has now broken the weekly trendline. Minimum a correction soon, if not a full retracement, assuming this is only the first wave and we are coming down with second. As far as I can see, the technical set up do suggest a bottom formation still in progress. Some analyst made known that the economy might be having a "W" shape recovery rather than a "V" or "U". "U" is out of the question because the shpe now looks more like "V".

Purely on technical term, let's not talk about alphabets, but reversal pattern. STI could really be doing a double bottom reversal and the shape would take more than a year to complete. Worse case would be a tripple bottom or head and shoulders ( taking not that it might not have bottomed which is still waiting for it at 1,300).

If I keep thinking of a bearish tendency, then what's the good news? Referring back at the chart, I wonder if anyone notice the crossing of 21 weeks moving average against 89 weeks? It is so far the only positive sign I see. However, this also normally means a correction ( some how base on my experience, the chart always correct to touch one of the moving average when a golden cross is made). So with this golden cross,should we still consider a bullish market?