We did mention long ago that we need to take note of DOW having 3 consecutive down days. Yesterday marked for the first time the first 3 down days since the start of the year.
Saw this article on the same comment:
3 down days after a strong trend is a sign of weakness. Together with the 2 weeks down phenomenon, and the 20 day MA slanting down, it does seem like the US market bears might be taking over.
That will not help the Asian market, where some indices have corrected quite a bit. Now STI is at 3100 having dropped around 350 points, Nikkei has dropped 3500 and is around 12500 now. Hang Seng has dropped 3000 points and is at 20700 now. Shanghai is down by 66 points. Even Malaysia KLCI, which is strong to this point after election, is down by 22 points today.
My opinion for people trading in Singapore:
1) Wait for a while before entering, I think 3000 is a major support. Patience is the key, especially when US is just picking up momentum to fall. Do not think it is cheap now, as things might get cheaper still if US drops and if STI breaks 3100. We did say 3000-3100 is the area to look at.
2) Those who are holding on to your stocks, do establish a 10% stop loss point.
3) 8th July is the start of US companies' earnings. Normally the second quarter earnings results are less than average. Starting from now, it is good to monitor how well the US companies earnings fare. If a lot are worse than expected, be prepared for a longer consolidation time frame.