DJIA, HSI and STI Trend

To be honest, I did not know how to start this blog, life has been a bit of a dull lately with urgency to plan for next year's business direction. So I have been facing Powerpoint the whole day for the past week.

At the same time, it seems that many on CNA forum have been complaining about how dull the market is right now. They are quite right. On my last entry about STI noting an up-hill task to climb further. Well, just Monday alone STI climbed 52 point breaking the resistance of 2,751. This mean a likelihood target of 2,809 which I have predicted earlier. However, the thrust quickly lost its steam and retreated back to below the 2,751 resistance today. In addition, RSI and Stochastic seems reversing with Stochastic having a divergence.


Fig 3 STI Daily Chart

While this is so, I redrew the envelop of the chart and noted that STI is still trapped within its congestion (yellow lines). Seems like my last trend was set wrongly. So just like my teacher said, " Let the chart open slowly to you like a flower". If the envelop holds, STI is likely to retreat to the lower end of the envelop, a rough prediction would be a value of 2,646, please note that this is an estimate.

While I went through other indices, namely Dow Jones and Hang Seng Index. Both charts are in similar position as STI. The only difference is that, both charts are producing a pattern of up-ward wedge and presently touching the upper envelops. So chances are both indices are pressured to come down.


Fig 2 DJIA Daily Chart

A look at Cow Jones chart seems to tell me that it still has a long way to go to complete its formation. There are roughly 4 points of contact on the wedge envelop. We might still be seeing an so call (actually I dislike this phrase because many people misused it) uptrend which in really it is just preparing its descend.


Fig 3 HSI Daily Chart

HSI on the other hand has a smaller wedge, plus it has already touched both envelops more than 5 times. I assume this is what they call the 5th wave wedge. I am thinking that the trend reversal of HSI might come sooner than the Dow.

While market continue to look "bullish at the moment, I continue to sense a huge possibility of a second dip next year. I wish my sense is wrong and if it is right, let it happen after Febuary so that at least I get a better bonus.