update on STI

Above is a daily chart of the STI. After bouncing off 2223 level three times, it finally managed to go above its moving average line and towards its upper Bollinger Band. Its MACD has also cut above its signal line and the moving average line is also turning up. All signs of a continuation of an uptrend.



Here is a weekly chart of the STI. After trading sideways for about 5 weeks, the STI finally closed above its previous high of 2424 recorded 6 weeks ago to end the week at 2434 and on increasing volume.

My conclusion is that it is safe to go long on stocks again.

STI - bear market rally or bull market consolidation?

The behavior of the STI in Jun 09 was pretty disappointing after the super run up in May 09. I spoke to someone who believes that what happened during that past few months was not the start of a bull market, but only a bear market rally, so i had another look at a monthly STI chart (attached above). What this chart tells me is that the longer term trend, represented by the slope of the moving average, is still down. Momentum, as indicated by the slope of the MACD is turning up, but until the STI manages to cut above the moving average and the slope of the moving average line turns up, we are still not in a long term bull market yet.



Above is a weekly chart of the STI. Since Jun09, the STI has been stuck in a sideways trading range, with a slight downward bias. Support is at 2223 and if the STI goes below that, i think you should close all long positions and wait for a trend to re-emerge. The one consolation i can see is that the downward drifting of the STI is on rather low volume. That means no major sell-off, which is good, but do pay attention to how the market unfolds in Jul09.