Any rebound by the index is likely to be at the mercy of US risk-free rates. Yields on the 10-year US treasuries remain elevated, at 4.25%. Yields on 2-year US treasuries are also elevated at 5.03%, and the yield curve remains inverted. These underminings are likely to limit equity market upmoves in developed markets.
Markets in general traded sideways awaiting the outcome of Central Bankers’ meeting at Jackson Hole. The Straits Times Index touched an intra-day low of 3,143 on August 22 before rebounding into the end of the week on August 25. Short-term indicators bounced off their oversold line simultaeously.
The STI ended at 3,189 on August 25, up 16 points week-on-week. Since short-term smoothed RSI has just made a minor bounce off its oversold line, it could continue to rise for the first couple of sessions in the week of August 28-31. Resistance is likely to appear 3,245, at the confluence of the 50- and 100-day moving averages, which have turned down.
