Market Technician

  Technical Breakthrough Last week marked significant gain in the financial markets; not only did we witness progress in the debt ceiling, but the S&P 500 also broke above the key 4,180 resistance point after weeks of consolidation. Given the break and the prevailing trading character, we anticipate the market index to approach 4,300 . Investor confidence continues to surge, spurred by the growth of mega tech and semiconductor stocks. The underlying theme driving these price movement is Artificial Intelligence (AI) demand. Our strategy remains consistent - we continue to hold long positions in the market, eyeing for any signs of strength in stocks. One noteworthy performer is Pinduoduo (PDD, US) , which successfully broke above its downtrend line. Coupled with the Fund Flow Index (FFI) in positive territory and Relative Strength (RS) breaking above its zero line, we foresee the price gaining more momentum as consumer sentiment and spending in China improve. Headlines for Week A...

 

  Thoughts on Week Ahead: Week 16 May 2023 All Eyes on Debt Ceiling A short write up for the week ahead. Nil major news. Market, technically directionless, is closely monitoring the US Debt Ceiling deal within US Congress. Quick look at SPY ETF flow so far suggesting nil major tail risk priced in by major market participants.  We did not come across tactical ideas for the week ahead and will be on the lookout.  Headlines for Week Ahead: US Apr Retail Sales China Apr Ind Prod and Retail Sales US FED Chair Powell and Former chair Bernanke to speak at conference  SG Apr NODX SG Earnings (SIA) US Earnings (Home Depot, Walmart, Target China Earnings (Baidu, Tencent) Blog Disclaimers apply

  No rate cut please In light of the US regional bank run situation, numerous voices across social media and mainstream media are advocating for a rate cut. However, as market participants, we believe that it would be more beneficial to see US Federal Reserve to hold steady on the current interest rates. This stance signifies that the economy possesses the strength to endure current high rates. If the Federal Reserve were to initiate a rate cut, it would signal an expectation of an impending economic contraction. Therefore, from an investor's standpoint, a pause in interest rates is preferred. Over the weekend, we did not identify any tactical trades of interest, but we will continue to keep a close eye on the market for potential opportunities. Headlines for Week Ahead: US CPI & PPI China Trade data China CPI US Earnings (Paypal, Walt Disney) SG Earnings (OCBC, Capland Invest, AEM, Seatrium) Blog disclaimers apply

Investors are increasingly attracted to the Singapore Investment Grade Bond ETF (MBH) , as they anticipate a more favorable interest rate outlook. Current upward trend is expected to persist, given that the previous downtrend has been breached and the current trend remains unbroken. The ETF's relative strength compared to the Straits Times Index (STI) further indicates that demand for the ETF continues to outpace the broader market. Blog disclaimers apply.

  Walt Disney (DIS):  Technical expectation for price to trend higher. In view that technical indictor FFI and RS are trending higher, with price broke above trading range resistance. First target at US$106.80 . Stop price below 12SMA (US$99.59). With the reopening of borders and the increasing desire for travel experiences, Disney is poised to benefit from a surge in demand for its attractions and entertainment offerings . This could potentially give Disney an extra boost in its upcoming earnings report on 10th May. Disclaimer applies

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  Thoughts on Week Ahead: Week 1 May 2023 Earnings not as gloomy Last week's earnings reports from major tech companies, including MSFT, GOOGL, and META, exceeded expectations and suggest that consumer spending may not be as weak as previously thought . This positive news could potentially boost sentiment in the equities market. Recent data on the Consumer Price Index and related indicators indicate that inflation may be reaching a plateau. Additionally, there are concerns about a potential economic slowdown in the fourth quarter of 2023. As a result, we  anticipate that the US Federal Reserve will likely announce one final 25bps rate hike in the current cycle  at the upcoming FOMC meeting. From a technical standpoint, the S&P 500 has managed to stay above a key resistance level. Despite a relatively weak reading, the volume-based momentum indicator Fund Flow Index (FFI) remains in positive territory. This combination of factors suggests that the S&P 500 may conti...