It has been awhile...

It has been almost 2 years from my last post.

Decided to do this post because everybody is writing about the recent crazy volatility in the financial markets, so I shall follow suit.

So the key question in everyone's mind - ARE THE MARKETS TURNING BEARISH?

My answer will be it will short to mid-term bearish but longer term trend is still quite bullish though the tide could be changing.

Why? The answer is all in the below DJ30 (Dow Jones) chart.

DJ30 Weekly

One simple question - Does this weekly chart look bullish or bearish? Even beginners will know the answer. So there you go.

I have been expecting a correction for this major uptrend but honestly speaking I was not expecting DJ30 to have a drop of more than 1000 points in a day. Perhaps this major fall is because of the break of the weekly upward trendline accompanied by global fears on slowdown in the 2nd largest economy, China.

Nevertheless, the DJ30 has moved more than 12k points (or approximately 400%) from the lowest in 2008. So this correction is long overdue. The most significant correction throughout the last 6-7 years was only the one in year 2011.

Ok. So enough about the historical introduction. Let's analyze what I expect to happen going forward.

1. Most likely we would not be breaking new highs (at least for till end of 2015) and so a lower high is expected.
2. Volatility will continue and investors are escaping leading to panic selling, which even the slightness clue of weak economy will lead to more selling.
3. Strong resistance between 16300 to 16500.
4. Going lower, target will be 14700 to 15300, with 15300 being a very strong support currently.
5. Limelight continues to be with China and perhaps US rate hike (though factored in already).

I shall briefly cover where EUR/USD is heading towards as well.

As shown in the chart below, EUR/USD is in a downward parallel channel for a very long period of time and it has bounced off from the lower trendline.

Due to fact that the below chart is a monthly chart, the key resistance and supports identified cannot be taken with a pinch of salt. Going north, resistance will be at 1.18 to 1.19 region as it was a key support region many years back and the Fibonacci retracement of 38.2% will be located there as well.

EUR/USD Monthly

The views above is quite long-term but we are very close to the key resistance levels, thus it is worth to highlight. Short to mid-term wise, I'm expecting EUR/USD to retrace slightly especially after the massive buying and thereafter the bullishness will likely to continue.

Lastly, on the Singapore STI. My personal view is that Singapore stock markets remained very week as compared to the foreign markets, especially in industries relating to shipping and oil. Some observations I have 'felt' from the Singapore markets.

1. Labour market seems to be tightening a fair bit.
2. Economic data are not impressive especially with much more spending from the Government on SG50 and election year.
3. And technically on the index itself, we are so close to the 2011 lows.

All the above are my personal views and disclaimer applies.

Trade safe and huat!