The saving grace is the directional movement indicators, which are pointing to a period of low volatility. ADX, which is currently at 13, is likely to fall further. The lower the level of ADX the less the market trends strongly. The DIs are neutral but appear poised to turn negative. Hence, even if prices fall, the decline is likely to be gradual rather than sharp.
We are all living and investing in the shadow of the US Federal Reserve, whose chairman is focused on defeating inflation. including our own Straits Times Index.
The STI fell fell by 67 points to 3,231 during the week of Sept 19-23. Although the decline was modest, and the index is hovering a little below the 50- and 200-day moving averages at 3,233 and 3,244 respectively, a rebound would be tough at this point. Resistance has been established at 3,300, and psychological support is at 3,200 for now.
