Technical Brief – 8th Dec 2008

Hello folks! Selamat Hari Raya Haji to one and all!

I have been busy working on the decks with my customary year end club mixshow. This may be the last one I will be doing so I decided to do something worth remembering. 7 hours, non-stop till daybreak!

Back to the charts. Wow what a rally today on the HSI! Europe too is rallying. US futures are all strongly in the green as well. Has the bull returned? Let’s see. Believe it or not, the US charts are still bearish. It will remain so till S&P has broken out of the 900 level on strong volume and the accompanying confirmation. My calculations show a possibility of a re-test of 800 still, and will give good support there. Botom line? Unless 900 is broken and confirmed, the charts are gonna remain bearish.

Flipping over to the STI. Nice green close on Friday but not convincing enough. It hasn’t been much of a rally at all and shows more of a sideway consolidation. Immediate resistance is at around 1740, thereafter 1910 will be the ultimate resistance. If it confirms that move beyond 1910 then it will be bullish. Supports are at around 1580 and ultimately 1470. Some will see the charts forming a symmetric triangle, while others may feel it is forming a descending triangle. The fact that it seemed to have formed a lower high and turned down is bearish.

I am favoring a short term downside for the US markets and the STI. That’s what the odds are. That view will be negated if the key resistances are broken. I would like all these to be done and over with so we can all move on but I don’t make the charts. None of us do. We should ride the wave. One point to note, historically the US markets favor the upside when it comes with low volume. Low volume due to holidays where traders are away. If I had it my way, I would like the retracements to be done and for the rebound to come with conviction. Most of the time however we do not get our way..

Bottom line is, regardless of the upside or downside, we remain deep in the woods and caution should be exercised at all times. This is one heck of a bear market and as with every bear market, millionaires are born. Millionaire turn pauper are also formed. It is time to choose, people!