view of the STI

Good morning, it has been a long time since my last update - my apologies. Some quick comments from me about the STI.

Above is the weekly chart, which should give us an idea of the longer term view of the market. Momentum of the STI, as shown by MACD, has been weakening since Oct 2009. So even though the STI has been making making higher highs in Dec 2009 and in Mar 2010, the MACD has been making lower highs. This is a sign of a bearish divergence. However, the trend was still up as the index has generally stayed above its moving average. However, the index closed below its moving average (MA) three weeks ago, and it appears that the trend has turned down. I think the longer term key number to watch would be the 50% fibonacci retracement of about 2700. A close below that number would be extremely negative.



Above is a daily chart of the STI. The short term down trend is very pronounced here. The previous intraday low about nine days ago was 2775. Yesterday's close was 2774. I think if the STI goes below 2770, it is likely to head towards 2700 as i see no further support levels.