After falling off the consolidation period from End Feb to around the start of May,
STI has been on a continuous downtrend due to the Euro woes, China slowing growth and US un-impressive economic outlook.
However, we are seeing a Positive divergence with respect to RSI just like the last year Aug to Oct. The technical indicators may show that it is a sign of optimism that stock markets have tanked enough and will go up from here.
I will adopt a wait-and-see approach until the Europe has settled their stuff and more hints as to whether Fed Chairman Ben Bernanke will set the policy to loosen monetary policy to help kickstart the world’s biggest economy.
Once these two major uncertain events are confirmed, we will be able to see a firm trend… and thats where we pounce!