Sunday, July 21, 2013

Outlook for DJIA, DJT, SSE & STI

It has been quite a while since my last blog post, now it is time to brush up and do my homework.

Stock Indice around the world has seen some good days recently, especially Dow Jones Industry, S&P and the phenomenal Nikkei.  In contrast, the all mighty Shanghai and Singapore stock markets are nothing but a bit lackluster.

What will happen next?  Obviously I won't know for sure, but let me look into my crystal ball and have my opinion.  Are they right or wrong?  Nobody knows, only when future becomes reality then we will be able to tell, so read my opinions at your own risk.

Dow Jones Instustry Average

We can see very clearly here DJIA is in an uptrend.  The slope of the uptrend actually has increased recently, from a gentle 30 degrees slope to a more steep close to 45 degrees slope.

Looking at the Fibonacci levels, we can expect DJIA to have another 20-30% upside potential, if not more.  US stocks in general are not expensive at this moment, with reasonable P/E levels.  Although we are again at an all time high of DJIA, but we are not seeing P/E at ridiculously high levels.

Dow Jones Transport

As a leading indicator of DJIA, DJT will give a glimpse into the future.  Here DJT is in an uptrend too, but the uptrend is not very strong.  The slope has been more gentle, and there is compression of the GMMA.  This signals we may have some head winds in the DJIA in the coming months, but the uptrend should still hold, but at a more gentle pace.


Shanghai is in a downtrend, with 1960 as its current support.  If this support level doesn't hold, we can expect to go down to 1837/1760 as its next support levels.

In the short term, I don't have a positive view on Chinese stocks.  Wealth is too concentrated in too few people.  The general public are still not very rich, at least not as rich as some foreign media depict them to be.  The reason some Chinese appear to be rich is because they do the same as some Wall Street bankers do.  When you go out of the big cities and visit their less developed areas, people are still very poor.


STI was in a nice uptrend, until recently.  Now it has fallen below its uptrend line.  Next, I will expect it to either go sideways or down.  Singapore alone is still ok, but its strong link with China will see its stock market to be dragged down by the poor performing SSE.

That's all for my crystal ball for today.

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