Saturday, May 3, 2014

Weekly Chart Update 2/5/2014

Information for this week has been overwhelmed that wallstreet participants need time to digest. On Wednesday, the FOMC announced a fourth $10 billion reduction to its quantitative easing (QE) program, reducing its monthly bond purchases to $45 billion and keeping pace with earlier guidance. Everyone was reading every single word that Yellen said, line by line, including myself. The feeling is that she is not so concern about rapid growth for the US GDP, she will continue to observe and measure the effect of tapering on the economy and make changes should the need arise.

In addition, the US GDP 1st quarter 2014 was a mere 0.1% growth, which showed that the amount of money put into the system doesn't work much at all.

Most importantly, the Ukraine crisis has escalated on Friday with clashes between the pro-Russian protesters and the Ukrainian government supporters in the eastern part of Ukrain, Sloviansk. Earlier some pro-Russian gunmen took over some government buildings in this eastern part of Ukraine, now the Ukraine government launched an offensive attack against these pro-Russian protesters to take control of the besieged eastern city of Ukraine. Death tolls are amounting at the point of writing.

The complication of this Ukraine crisis is that despite Russia's denying their participation in this war, the US president, Obama has gathered supports from the EU countries to impose sanctions on Russia. Hence, if this escalates, it will not be a simple Ukraine crisis, it would have a bigger implication to world peace.

US Market

I have re-drawn the S&P 500 chart due to its range bound price actions for the past 2 months. Chances are it will continue on this horizontal trend until further news. The market is lack of direction now, or we call it "Neutral".

STI Market

For the Singapore market, I have drawn a bullish channel beginning from the beginning of February. After 3 months of bullish trend, I think there is a great possibility that it may go through a horizontal trend for the next 2 months based on my analysis on the past trends for this index. Nothing is guranteed, but I forecast based on probabilities that the STI seems to work well with a 3 waves chart pattern. Resistance 3300, support at 3200.

KLCI Market

From the chart we can see that the KLCI is little stretched here. We need new leads to push the market higher. Support maintain at 1840.

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