During the week of July 10-14, the Straits Times Index gained 109 points to end at 3,248 on July 14. On July 7, the dragonfly formation on the candlestick chart did indeed lead to a rebound. However, after three white candles, a black candle has appeard on July 10. But its pattern isn’t indicative of a top yet. However, there is some minor resistance at 3,260, which may curb investor and punter enthusiasm. The main resistance sets in at around 3,323 or thereabouts. These resistances and the support at 3,140-3,150 place the STI’s movement within a trading range.

The STI’s quarterly momentum has rebounded to its equilibrium line, a level that may provide some resistance.

The reason why investors shouldn’t get too carried away with the 109-point rebound is because of the yield of the 10-year US treasuries chart. The 10-year US Treasury yield rose to a high of 4.09% before retreating. Its current level of around 3.78% is above the confluence of the 50-, 100- and 200-day moving averages at 3.705%, 3.65% and 3.3.698% respectively. Hence the confluence of the moving averages is likely to provide sufficient support to stop the 10-year Treasury yield from falling further.

As the 10-year US Treasury yield finds support, the US equity market’s rally may lose its legs. That would cause smaller markets like the SGX to ease. As it is, the STI has been trading within a range, and is unlikely to break above the top of that range in the near term.

https://s3.ap-southeast-1.amazonaws.com/www.theedgesingapore.com/public/usr/8azncs/bee032-1095-RT.jpg

The rally’s legs depend on US risk free rates as STI approaches resistance  

DPM Lawrence Wong appointed as GIC’s deputy chairman

Will the Rising Sun keep rising?

Fed signals higher-for-longer rates with hikes almost finished

EQT Impact Challenge offers platform for impact entrepreneurs to attain 'patient capital'

Singtel to sell 20% stake in regional data centre business valued at $5.5 bil

RHB remains positive on ST Eng for its ‘strong’ earnings potential and ‘well-supported dividend yield’

Citi remains cautious on Nanofilm amid uncertain demand recovery 

UOB Kay Hian ups SingPost’s TP to 51.5 cents after postage rate hike

Tapping into the power of conversational commerce

Building up the digital skills needed to futureproof Asean’s growth

Cisco strikes US$28 billion deal for Splunk in biggest buy yet

SingPost signs MOU with FedEx to trial acceptance points at post offices

US stocks flash recession warning as trouble spreads to industrials

Norqain partners with Dean Schneider to raise funds and awareness for the Hakuna Mipaka Wildlife Oasis

Weekout (Sep 25): &Juliet, Halloween Horror Nights, Ganko Sushi, High Bar Society

See the latest from Alexander McQueen, Puyi Optical and more

Instacart has caught tech's next big thing

The end of an era for global automakers

China must avoid a debt-deflation spiral

OCBC becomes first bank in Singapore to offer cross-border payments for customers through Alipay+

Goh Jin Hian, former CEO of New Silkroutes Group and son of former PM Goh Chok Tong charged with false trading

Thomson Medical has 3 months to restore public float

Proposed rezoning of Marina Square could have 'significant upsides' to NAVs, says DBS

DBS keeps 'buy' call and 18 cents target price on Seatrium

The rally’s legs depend on US risk free rates as STI approaches resistance

Related News

Highlights

DPM Lawrence Wong appointed as GIC’s deputy chairman

Related News

Equity markets dictated by rising risk-free rates

Straits Times Index moves above resistance as investor focus moves to FPL

Straits Times Index’s rebound could approach resistance soon