Weekend Wrap

It's the second week of the ugly fall-out for STI, mainly attributed to the Greece crisis. To date, STI has dropped 211 points or 7.2% in two weeks time. It closed at 2779.1 on Friday, within my expected support area 2770-2780( refer to my previous post).

Take a look at STI weekly chart below, the weekly candlestick is a big black bearish candlestick, indicates the bears are still in dominate, market may drop further if we lost current 2770-2780 support. The next major support is 2650, which is a critical support level, it's STI last year closing level as well.

On STI daily chart below, STI gapped down to its long time uptrend line support level now. With the belief that market can't drop forever, the lower it drop, the higher it increased the probability of a rebounce. I have identified two support level to watch closely:

S1: 2770-2780
S2: 2650

Meanwhile, take a look at my STI momentum chart below, this chart tells me STI momentum, where above 160 indicates extremly bullish, and below 60 indicates extremly bearish. Market would very much likey reverse soon in both cases. This indicator has worked out quite accurately, never fail so far. It just dived below 60 on Friday, which shows me the probabilty of market rebounce is highly possible in coming days now. I expected market may have a last flush in coming week before it rebound.