Concluding 1Q23 and current market trend

German Chancellor Olaf Scholz recently declared that Deutsche Bank is "very profitable," causing markets to pare losses and close in the green on Friday. Amid the recent banking crisis, the market trend continues to exhibit short-to-medium term upward momentum. However, as we enter the second half of 2023 (2H23), investors should exercise caution due to potential interest rate cuts.

Market Trend Amid Banking Crisis
Despite the ongoing banking crisis, the market trend remains on a short-to-medium term uptrend. This is evident from the swift recovery of the markets following Chancellor Scholz's positive statement about Deutsche Bank. The overall market sentiment appears to be cautiously optimistic, buoyed by the robust performance of key players such as Deutsche Bank.

S&P 500 Range Bound Trading and the End of 1Q23
As we approach the end of the first quarter of 2023 (1Q23), the S&P 500 continues to experience range-bound trading. Market participants should keep a close eye on potential directional breakouts as we conclude the quarter. Such breakouts could offer valuable insights into market trends for the coming months and provide opportunities for investors to capitalize on the prevailing market dynamics.

Caution in the Second Half of 2023
Investors should remain vigilant as we approach 2H23. The current interest rate futures market indicates a possible rate cut during this period. Historically, rate cuts have been employed to create favorable credit conditions in response to a weakening economy. This suggests that the upcoming rate cut may signal economic challenges ahead, warranting investor caution.

While Deutsche Bank's profitability has provided some reassurance to the markets, investors should remain cautious as we move into the second half of 2023. With possible interest rate cuts on the horizon, it is crucial to monitor market trends and adapt investment strategies accordingly. As we conclude the first quarter, the S&P 500's range-bound trading could give way to a directional breakout, providing new opportunities for market participants.

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Wyckoff's Law of Effort

Law of Effort Wyckoff's Law of Effort states that on any single trading day (or week depending on time frame), huge volume (effort) push by participants should see huge price movement, resulting in a wide spread (long body). This is a basic principle of effort and result. However, as per Singtel's case study, we saw huge selling volume on 11 May, yet the price action only shows a narrow spread (small body). This divergence of effort and result in Wyckoff's Law of Effort principles, indicates possible exhaustion in selling or hidden buying. Thus, with a lack of weakness, Singtel should continue trading range bound for the coming days or weeks till further strength or weakness is observed. Swing Traders who trades range can consider positions at 3.70-3.72, with exit target 3.76-3.78.

Markets searching for technical support

Thoughts on Week Ahead: Week 21 Aug 2023 Markets searching for technical support US FOMC minutes have confirmed market’s fear of a hawkish US FED. This fear has triggered a continued sell-off in global equities over the past week. China economy and policy did not help too much either. China Evergrande filed for chapter 11 in US while Country Garden future remain uncertain as investors continue to keep an eye for a more aggressive policy from Beijing to support the economy and people’s confidence. From a technical perspective, markets are searching for technical support levels, where bargain hunters are willing to come in. Support levels are 4,300 for S&P 500 and 3,130 for STI. For the week ahead, market participants will be zooming in on US FED Chair Powell’s speech at the Jackson Hole meeting. We did not uncover trading (tactical) set up for the week ahead and will update once we identify any. Have a great trading week ahead. Headlines for Week Ahead: Key corp earnings (Nvidia

Thoughts on Week Ahead: Week 28 Aug 2023 Looking out for technical reversal indication Past week was an eventful one, with significant developments ranging from the arrest of former US President Donald Trump to BRICS expanding its membership to include financial powerhouses Saudi Arabia and the UAE. However, the focal point for the financial markets remained the speech by the US Federal Reserve Chair at Jackson Hole. The Chair highlighted that current economic condition is more favorable and hinted at holding rates during the Sept FOMC meeting, but also suggested a possible 25 basis points hike later in 2023, aligning with market expectations. Personal view, mixed rate outlook could suggest potential interest rate pivot (peak). Currently, both the S&P 500 and Hang Seng Index are in the process of establishing support levels at 4,300 and 17,800, respectively. We are closely monitoring these markets for signs of supply exhaustion, which would indicate a potential reversal. Intuit

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