Market Weekly Outlook

Thoughts on Week Ahead:

Week 19 May 2024

“It’s Fresh!” US markets hit fresh highs this week, driven by modest CPI data and resilient earnings reports. Investors are now awaiting the FOMC minutes for clues on the future interest rate policy. Additionally, Nvidia’s upcoming earnings report is expected to shed light on the strength of the current AI-driven rally.

We initially anticipated sideways momentum in the US market indices, but the market exceeded our expectations, breaking above our range. As a result, we have revised our technical outlook to cautiously bullish, setting our next target at 5,420.

In the East, Beijing is implementing more aggressive policies following its trillion-dollar bond sale. The central government plans to buy back unsold homes and eliminate mortgage rate floors for individuals. Our team believes that even more aggressive measures may be introduced if necessary to revive the economy and stabilize falling property prices.

The Greater China indices, China A50 and HSI, are trading in line with our expectations, supported by these measures. Our targets for these indices remain at 13,500 and 20,000, respectively.

Back in the Singapore market, our analysis suggests the index could retest the 3,350 level.

While markets may consolidate slightly this week, our preference is to take long positions in the equities market, remaining vigilant for any signs of supply pressure.

Headlines for the week:

- US Corp Earnings (NVDA, TGT, PDD)

- SG Corp Earnings (Singtel)

- US FOMC minutes, PMI

- China LPR Fixing

- SG final GDP 1Q24, Apr CPI, Ind Prod, Short trading week

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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