Monday, December 17, 2007

Bull vs Bear - Round 1

We saw the fight between the bull and the bear in the market today. STI plunged 46 points at start, then it slowly climbed back up 20-30 points. This was the first wave, the plunge was a follow-up of Friday's 178 points drop in the Dow Jones Industry Average (DJIA).

The second wave came when Hong Kong's stock market opened. It saw the Heng Seng Index plunged over 600 points. The STI was down 76 points from last Friday's 3466. Again, it managed to pull itself up for 20-30 points before the close of the morning session.

The third wave came at the opening of the afternoon session. Singapore's November non-oil export data were released. Non-oil export declined 3.4% year-on-year (YoY), -6.0% month-on-month. One of the supporting pillars of Singapore economy, the electronics section, declined 8% YoY. This piece of bad news sent STI down to 3353.56 points at closing.

Winner of the Round 1? Of course the bear. What next? As I said in a previous post, if the STI goes down, it will go down to 3300 support level. If 3300 support level is broken, then STI will continue its downtrend all the way down to 3000. However, in the next couple of days, I do expect STI to rebound a bit before it goes down again. Potentially a bull-trap.

I count myself lucky that I sold off all my shares a few days ago while STI was still holding up well. I don't think I will ever touch any stock until the STI settles around 3000. Anyway, I am off for holidays in the next couple of days. There is no point buying anything right now. Whatever stock it is, no matter how good that stock is, you most probably will be able to buy that stock at a lower price in the next couple of months.

No point buying does not mean no point monitoring the STI. It is a good opportunity for those who are new to monitor the market, do mock investments to test out your strategies.

Ok, let's see what will happen tomorrow at round 2 of the fight :)

Disclaimer: The above is just my personal opinion. No liabilities for me to bear :)

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