Singapore: STI Index (.STI) tit-for-tat tariffs on US goods kicks off this week

Singapore: STI Index (.STI) tit-for-tat tariffs on US goods kicks off this week

Singapore: STI Index (.STI) tit-for-tat tariffs on US goods kicks off this week

The working week kicks off with China’s tit-for-tat tariffs on US goods. The tariffs, which applies to $60 billion worth US imports, came into effect on 1 June. Foreign companies operating in China will also find out if they are included on a blacklist of firms that are deemed harmful to the country’s interests.

It’s time for those US non-farm payroll numbers and unemployment rate again. The percentage of the US workforce that is out of work could have crept up slightly from 3.6% to 3.7%. Meanwhile, growth in the non-farm payroll could have slipped from 263,000 in April to 190,000 in May.

China’s Caixin manufacturing PMI could have expanded more in May than in April. The Caixin services purchasing managers index for May could also show that the sector is in expansion mode, but less so than in April.

The European Central Bank is expected to keep interest rates unchanged at 0%. Meanwhile, the European Union could confirm that the economic bloc expanded 1.2% in the first quarter.

Staying with GDP, Japan is expected to confirm that its economy grew 2.1% in the first quarter. The expansion was supported by net export gains, as imports fell faster than exports.

Malaysia is expected to say that its trade surplus rose to RM12.9 billion in May compared to a year ago. However, this would be slightly lower than in April, when its surplus was RM14.4 billion.

Singapore’s manufacturing sector could have contracted in May. In April, the manufacturing PMI edged down from 50.8 in the previous month to 50.3. The reading in May could be as low as 49, which would indicate contraction.

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

By the way, prices are vulnerable to a correction towards 3,231.10.

The projected upper bound is: 3,182.18.

The projected lower bound is: 3,049.21.

The projected closing price is: 3,115.70.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 31 white candles and 19 black candles for a net of 12 white candles.

A falling window occurred (where the bottom of the previous shadow is above the top of the current shadow). This usually implies a continuation of a bearish trend. There have been 6 falling windows in the last 50 candles–this makes the current falling window even more bearish.

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 25.6338. This is not an overbought or oversold reading. The last signal was a buy 4 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 22.57. This is where it usually bottoms. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 18 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 -147.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 4 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 sell 18 period(s) ago.

Rex Takasugi – TD Profile

STRAITS TIMES closed down -25.240 at 3,117.760. Volume was 1% above average (neutral) and Bollinger Bands were 59% wider than normal.

Open High Low Close Volume___
3,114.5503,130.5803,110.5103,117.760 214,826,064

Technical Outlook
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 3,166.26 3,269.42 3,179.28
Volatility: 7 13 15
Volume: 206,435,840 211,748,128 214,956,704

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 gapped down today (bearish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
STRAITS TIMES is currently 1.9% below its 200-period moving average and is in an downward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume out of .STI (mildly bearish). Our trend forecasting oscillators are currently bearish on .STI and have had this outlook for the last 14 periods. Our momentum oscillator is currently indicating that .STI is currently in an oversold condition.

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