Something is wrong with Straits Time Index (STI)

 I am relatively relaxed today, I have completed my weekend tasks yesterday, including an entry to this blog. 

I woke up early this morning and practiced my sketching skill set, I just kept experimenting on figure drawings, training myself from sketch of single person to 2-person interaction. 

By 10AM, I felt that I have done enough of my sketches, and it would be good to do something else.

I have decided to turn on my laptop and aimlessly checking on charts. A thought came into my mind, " maybe I should take a look at STI."

I seached through my archive and was surprised that my last input for STI was One refuse to go down, one refuse to go up... in February 2021. That was more than 2 years ago!

In that update, I estimated an uptrend for STI with an objective of above 3,500.

I never thought that I should be surprised by the STI chart, except that I was.

Fig 1. STI weekly chart

To start with, while STI climbed up north since then. it failed to reach 3,500 and stopped shoert of crossing the previous high of 3,466, only to manage 3,408. All these whiles, divergence was observed on MACD with lower high on every single peak from STI.

 Started with its gap on 21st March 2021, STI has in fact gone side trend and forming what looks like and island reversal pattern with a potential double top reversal with a neckline at 2,968. 

What's more alarming is its recend decline since 30th Jul 2023 from its peak of 3,392, that came with a surge in trade volume. Even though the peak volume was observed on its reversal from the moving averages, that surge of volume did not translate to momentum upward.

Instead a larger volume on its decline seems more consistent.

This formation is 3 years in the making, quite consistent with the time needed for a top or bottom formation.

As of this week, there are 2 moving average crossing noted, the 55-week crossing 89-week and 21-week crossed the 144-week. 

Things are not looking good for Singapore if STI enters bear market. Evidence from its previous major declines, the slope of bear for STI is very steep.

If this is true, I suspect Singapore will enter another round of recession for the next few years. Tough time will however, not be felt in 2024 as STI has just begun to fall, it will be at the bottom off fall when the market feel the pinch.