STI Statistics

Dow was down 313 points on Friday to close at 8378. The big plunge that was supposed to take place based on activity in the futures market did not happen. Dow futures plunged 550 points on Friday morning, triggering a temporary trading halt. A 313 points (3.6 percent) drop is therefore something that no one expected.

In Asia markets, Singapore STI drop 8.33%, Japan Nikkei drop 9.6%, Hong Kong Hang Seng drop 8.3%, South Korea drop 10.57%, Shanghai drop 1.92% and India drop 10.96%.
So the drop in US is mild considering what happened in Asia.

Looking at Singapore, STI has dropped 32% since the beginning of October. Let’s look at the index based on its performance from May to Oct and Oct to May period.

Based on records from 1988 till present, there was only 1 period where the index dropped more than 30% during the Oct to May period.

That happened during 1997 from Oct 97 to May 98. The lowest point during that period was 47% below the Oct 97 opening level. Following that decline, the index dropped by another 37% from May 98 to Oct 98.

Will we see another double digit percentage drop from Oct 08 to May 09? Based on the records that I am looking at, the chances of that happening is slim. STI have dropped 15% from Oct 07 to May 08 and another 25% from May 08 to Oct 08. The record shows that there was never a consecutive 3 periods of double digit percentage drop in the index. And when consecutive 2 periods of double digit percentage drop occurred, the next period was a rally. That occurred in 1998 (101% rally) and 2001 (30% rally). And both of these rallies stated in October.

STI Update

US market tried to overcome from market weakness on Friday. However at the close, it succumbed to market forces and Dow was down 127 points. At one point, the Dow index managed to put on a gain of nearly 300 points. The optimism could not hold and the index gave back all the gains plus some extra losses to end at 8852.

The STI index dropped 72 points on Friday in anticipation of further weakness in the US market. The index gave up all the gains made on the first 2 days of the week.

The index has broken through the 62% re-tracement level and is now heading towards the low of 1205 set in March 2003. The support level is at 1848 and 1793.

The daily chart is showing a potential for a double bottom. However the index needs to move above 2218 for the pattern to be valid.