Debt Ceiling, watching from sideline

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

Wyckoff's Law of Effort

Law of Effort Wyckoff's Law of Effort states that on any single trading day (or week depending on time frame), huge volume (effort) push by participants should see huge price movement, resulting in a wide spread (long body). This is a basic principle of effort and result. However, as per Singtel's case study, we saw huge selling volume on 11 May, yet the price action only shows a narrow spread (small body). This divergence of effort and result in Wyckoff's Law of Effort principles, indicates possible exhaustion in selling or hidden buying. Thus, with a lack of weakness, Singtel should continue trading range bound for the coming days or weeks till further strength or weakness is observed. Swing Traders who trades range can consider positions at 3.70-3.72, with exit target 3.76-3.78.

DBS Group Holdings (D05): Upward Move Expectations

DBS Group Holdings (D05) Upward Move Expectations Technically, price trading above 36.58, could see DBS Group retest previous high of 38.55. Both Relative Strength and momentum indicator FFI are supportive of the move. Stop below 35.42 Disclaimers apply

Keppel DC REIT (AJBU): Expect price to trade towards S$2.00

Keppel DC REIT (AJBU) Expect price to trade towards S$2.00 We have observed a decrease in technical supply at the S$1.80 support area during recent trading sessions. Furthermore, a softer interest rate outlook could be advantageous for the Data Centre operator. Consequently, we anticipate the REIT to move towards our initial target of S$2.00, with the potential to reach S$2.20 if it breaks through resistance. Our stop level is set below S$1.72. Disclaimers Apply

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