DJIA and STI

Well, enough with my crappy fundamental prediction of the market. Let's get back to something that I like more, charts!

In my previous entries tracing back to the beginning of November (2009), I have been seeing warning signs of reversal for both STI and DJIA. I taced back a few entries and noted that I have been writing about the weakness in the indicators since then. However, they refuse to come down and it made me think if I have a wrong read of the charts and I am in fact on the wrong side of the market.

Perhaps my teacher is right, the charts are alive, and they are just waiting for the right moment to synchronize and come down. Just like someone at death beds, they will not go peacefully as long as their final wish is not achieved.

Probably they are all waiting for something big to happen, something like Dubai World?

Fig 1 DJIA Weekly Chart


Fig 2 STI Weekly Chart

On weekly basis, we can see that the indicators of DJIA and STI are at the top and turning. To some extend divergence are visible, giving support of a trend reversal ( or correction, which ever suit).

DJIA retreated from the resistance that I have derived from the downward trendline and the wedge envelop. It is now heading to its support envelop which is at 9,979.

STI is also resisted at 2,799 by its envelop and the Gann Grid line. The support for this chart so far is still 2,751.

Fig 3 DJIA Daily Chart


Fig 4 STI Daily Chart

The Daily charts are more drastic, the indicators are falling! Somehow showing urgency to go South, probably to escape the Winter. The divergence on DJIA cannot be obvious enough, a double divergence with every climb of the chart.

I have previously mentioned about 2,809 on STI. I have somehow forgotten where I got the number from until recently when STI reached 2,803. The numebr seems close enough to ring a bell. I recall that it was derive from Fibonacci calculation of the 5th wave target.

It will be interesting on how the market will perform tomorrow. I won't say that there is no question about it on having a sell down. The chances are high on panic selling, like I said, it may not even benefit the shortists.