The Straits Times lost some 65 points in three trading sessions to end at 3,291 on May 6. The largest decline of 51 points took place on May 6. This was probably part of a global sell-off as a result of fund redemption. Some market watchers blame the increased volatility in the US on ETFs. As stocks fall, these ETFs have to rebalance.
Technically, the STI has weakened over the week, falling below a support at 3,320, and its 50-day moving average, currently at 3,328. At present, the STI’s decline has been stopped by the 100-day moving average at 3,289.. Since sentiment is poor, and the chart pattern is weak, a break below this level could materialise in which event a downside of around 3,250 would be indicated. The STI's 3-month low of 3,148 was in March.
The STI’s quarterly momentum is retreating, but remains in positive territory. Directional movement indicators are turning gradually negative, suggesting some weakness for the Singapore market.