Capitalising on Interest Rate Shifts: Promising Sectors & Assets

Thoughts on Week Ahead:

Week 18 Dec 2023

Capitalising on Interest Rate Shifts: Promising Sectors & Assets

Markets navigate divergent paths in the shadow of recent central bank announcements. While the S&P 500 finds support at 4,650 and eyes resistance at 4,800, buoyed by dovish FOMC signals, China A50 remains subdued, breaking below its 11,142 October 2022 support as worries linger around real estate restructuring.

Meanwhile, the Straits Times Index surprised with a short-term momentum shift, breaking above its down trendline. We expect the index to retest its immediate resistance at 3,175, with further potential towards 3,258. However, our long-term view remains cautious due to bearish signals from the LT Cycle model.

In light of the evolving interest rate landscape, we see opportunities in interest-rate sensitive sectors and asset classes, particularly REITs and bonds. As central banks pivots from its rate hike policy, these assets stand to benefit from increased demand for income-generating investments.

Headlines for Week Ahead:

- US 3Q23 GDP, Nov PCE

- China loan prime rate fiixng

- SG NDOX

Disclaimers apply.

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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