The Straits Times Index ended the week of Sept 20-24 unchanged, at 3,071, and that leaves it still above its 200-day moving average - now at 3,061. That puts the STI in a stronger position than the Hang Seng Index, which is hovering at the low end of a sideways range, at 24,192, down 728 points week-on-week.

The HSI - which broke below its 200-day moving average in early-July - has fallen below minor supports at 24,748, a low made on July 27, and then at 24,581, a low made on Aug 20. A break below these levels indicates a downside of 23,512. Technical indicators suggest a decline from 24,192 as ADX is rising, and the DIs are negatively placed. Quarterly momentum continues to decline and has yet to bottom.

While the STI continues to hold above its 200-day moving average, it may sink below it in the last week of September as indicators remain weak. ADX is rising and the DIs are negatively placed. Quarterly momentum is languishing beneath its equilibrium line.

While the local market is less volatile and more glacial than Hong Kong and China, the STI is susceptible to a sell-off in North Asia should that materialise that could drive it lower.