Singapore takign a second dip into recession?

I have been looking more at STI chart recently. Although I managed a measurement of target 2,809 in my earlier studies, STI recent movements are somehow disturbing. If the measurement is right, it should be on its way there right now, instead the movement has been very sluggish.


Fig 1 STI Daily chart

STI's performance today is especially worrying. Most importantly, it has broken through its trendline support on Daily basis. I would normally take this line to be relatively sacred and crossing it means major trend reversal. I have anticipated it to do so but expected a level of 2,800 at least before such move. Apparently, I might have missed something in my wave count?

The daily indicators are all pointing south with increasing momentum. Not only the index broke through its trnedline support, it has also broken through the 21 days Moving Average at 2,581 and support of 2,592 seems to be a goner.


Fig 2 STI Weekly chart

The weekly chart is more optimistic, although the indicators are pointing south, there is no divergence. The index has not yet violate any indication of reversal. Somehow the trendline support in on a different level and is presently supporting the index at 2,565, although with some false break. Further to that the 2 moving averages that I am using (21 weeks and 89 weeks) are about to meet with a golden cross. Thus it is still possible that today's move only contribute to a correction with false break on the trendline.


Many people also question if the crisis is over? some predict a "V"shape recovery, others talking about "U" shape. So which one is true? To study this we must look further back in time.


Fig 3 STI Weekly chart since 1987

Base on a longer time frame, we can see 2 dips before the crisis we have this year. The first being the notorious 1997-1998, the other is 2000-2003. So far there is no "U" shape recovery there, but there was a "V" (Spike) and a "W" (Double bottom). Taking the rule that History repeats itself, adding to the weekly the indicators revelation, I am betting on a double bottom or even a tripple bottom formation on STI, this means a long and cold winter in this region. If I am right, then the Government has made their cash withdrawal from the reserve a little bit too early.