Singapore: STI Index (.STI) ends 2019 in the black after roller-coaster year

Singapore: STI Index (.STI) ends 2019 in the black after roller-coaster year

Analysts eyeing catch-up rally in the new year should trade and manufacturing recover

Stocks slipped globally in quiet New Year’s Eve trading Tuesday with many markets closed. Wall Street could close 2019 with back-to-back daily losses in a year that the U.S. posted the largest market gains since 2013.

Britain’s FTSE 100 slipped 0.4% to 7,553 in midday trading, while the CAC 40 in Paris shed 0.1% to 5,977. Germany’s markets were closed. Wall Street appeared headed for a slightly lower open on light trading.

The Shanghai Composite index gained 0.3% to 3,050.12, reversing earlier losses, after the government released a monthly survey showing Chinese manufacturing held steady in December. But elsewhere in Asia, Hong Kong’s Hang Seng index lost 0.5% to 28,189.75, while in Australia, the S&P ASX 200 declined 1.7% to 6,647.70. The Shanghai Composite index gained 0.3% to 3,047.54. India’s Sensex shed 0.2% to 41,463.61. Shares also fell in Taiwan and New Zealand and were flat in Singapore.

Many markets, including those in Tokyo and Seoul, have already ended trading for 2019. Markets will be closed on Wednesday.

Strong manufacturing data from China appeared not to do much to counter the prevailing selling sentiment. The official purchasing manager’s index for December held steady at 50.2, even with the month before, and the second straight month of expansion on the scale where below 50 indicates a contraction.

In U.S. trading, the benchmark S&P 500 has risen five straight weeks, notching multiple all-time highs along the way. It’s on track to end December with its fourth consecutive monthly gain.

Technology, communication services and health care stocks accounted for much of the selling Monday. Retailers and other companies that rely on consumer spending also fell.

Homebuilders fell after a report on pending U.S. home sales in November came in below analysts’ expectations. Shares in utilities and real estate sector companies fared the best, ending with only tiny losses, as investors shifted assets to high-dividend stocks and other bond proxies.

“There could be a few big institutions out there that are taking some profits,” said Randy Frederick, vice president of trading & derivatives at Charles Schwab. “Big players can have a bigger influence on the market when the volumes are low.”

The S&P 500 dropped 0.6% to 3,221.29. The Dow Jones Industrial Average fell 0.6% to 28,462.14. The Nasdaq composite lost 0.7%, to 8,945.99, while the Russell 2000 index of smaller company stocks slid 0.3%, to 1,664.15.

Bond prices fell. The yield on the 10-year Treasury note rose to 1.89% from 1.87% late Friday.

Despite the downbeat start to the holiday shortened week, the S&P 500 is on pace to finish the year 28.5% higher, which would make it the strongest annual gain for the market since 2013.

A truce in the 17-month U.S.-China trade war and positive signs for the economy have helped keep investors in a buying mood. Fears about a possible recession have also faded since the summer after the Federal Reserve cut interest rates three times. The central bank appears set to keep them low for the near future.

Still, as the market prepares to close out a strong year of gains, uncertainty remains over the final details of a “Phase 1” trade deal between Washington and Beijing, which U.S. officials say will be signed in early January. Details of the agreement have not been disclosed, and it’s unclear how much impact it will have if the two sides are unable to resolve their remaining differences.

A couple of potentially market-moving economic reports are scheduled for release this week.

Investors will get to mull over new data on U.S. consumer confidence and home prices Tuesday, and the latest snapshot of manufacturing on Friday. Meanwhile, the minutes of the Federal Reserve’s latest interest rate policy meeting are also due out on Friday.

Technical Indicators

Overall, the bias in prices is: Sideways.

By the way, prices are vulnerable to a correction towards 3,204.60.

The projected upper bound is: 3,270.52.

The projected lower bound is: 3,178.29.

The projected closing price is: 3,224.40.

Candlesticks

During the past 10 bars, there have been 4 white candles and 4 black candles. During the past 50 bars, there have been 24 white candles and 23 black candles for a net of 1 white candles.

A gravestone doji occurred. This often signifies a top (the longer the upper shadow, the more bearish the signal).

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 58.2436. This is not an overbought or oversold reading. The last signal was a sell 2 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 56.25. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 38 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 82. This is not a topping or bottoming area. The last signal was a sell 2 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 13 period(s) ago.

Rex Takasugi – TD Profile

STRAITS TIMES closed unchanged at 3,222.830. Volume was 100% below average (consolidating) and Bollinger Bands were 43% narrower than normal.

Open     High      Low     Close     Volume___
3,222.8303,222.8303,222.8303,222.830 0
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 3,219.48 3,214.59 3,224.40
Volatility: 2 9 12
Volume: 110,172,192 254,861,664 223,736,976

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

STRAITS TIMES is currently 0.0% below its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. Our volume indicators reflect volume flowing into and out of .STI at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on .STI and have had this outlook for the last 3 periods.

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