Saturday, May 31, 2014

All Time High For The US Market

The US S&P 500 closed at all time high on Friday at 1923 while the DJIA closed at 16,717! 

For the past one week, the S&P reached my target of 1920 and closed at 1923 on Friday. However, the rise was not fully supported by its volume. If we look at the Dow Jones Industrial Average which tracks 30 largest cap stocks in the US, we see that the volume actually decline while the US market was at its all time high. What this tells us is that probably next week we shall see some pullbacks but the pullbacks should be above the 1890 level. Once the 1890 level is secured, most likely we shall see the S&P testing the next level which is 1950 in the month of June.

The DJIA showed divergence between the price and the volume.

The STI Market
The STI market has also reached my target for the past one week. It closed on Thursday exactly at 3300 and on Friday, it closed at 3295. As long as there is no major bad news, the STI is likely to drift nicely in this bullish channel. Support at 3250, resistance 3375.

The KLCI Market
The KLCI market was performing remarkably well as many market participants did not think that our Bursa Malaysia can reach so far. From the chart we see that the KLCI has climbed above the upper resistance line as depicted in the chart below. If our property market is holding well with no major negative external factors, this resistance line may become the support line for many years ahead. However, for next week we shall see some consolidation in the beginning of the week due to the canddlestick chart pattern - a bearish shooting star was formed on Friday with large volume. Support at 1860, resistance at 1890.

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