STI. Is the Boat Gone? Can I still Swim After It?

Since the beginning of this week, the Strait Times Index (STI) has been in a winning streak, rising close to 10% in just 5 days. This sudden movement caught many investors unaware given the lackluster movement of the index for the past few weeks. Some attributed it to a huge bullish option bet by a certain big boy as reported in Business Times which has resulted in many other investors jumping onto the boat (bandwagon or whatever you like to call it) in fear of missing out the tide.

For me, it does not really matter what the cause is. The system's Market-Wide Trend Analysis (MATA) has already been bullish since 7th April 2020 which I have announced to my premium subscribers on the same day and also made a free post in this blog a few days later. So if one has heeded MATA's advice, and initiated a long position on STI, one would have gained 8.35% in just 2 months!

So far, for this year, MATA has been really accurate in its prediction of trend reversal. If you look at the chart below, MATA was neutral at the beginning of the year until 14th February 2020 where it turned bearish. We all know what happened next. If one has shorted STI based on MATA, one would have gained about 21% profit. The bearish trend reversed on 14th April 2020.

So are we already too late for the party?
Ever since MATA has turned bullish, it appears that the overall Singapore market is well supported and the overall market has just managed to come out of the oversold region. Hence, there is still potential for further uptrend as the economy starts to gain momentum as well. On the other hand, the US market is reaching the overbought region so there is a chance of a pullback coming which will put some pressure on SG as well. When exactly will MATA or the overall market trend reverse? I don't know. I will only know on the day when MATA tells me the trend has reversed. If I were to start investing today, my plan would be to only invest a portion of my capital and wait for the pullback in the US to invest the rest. And do not forget to do your own due diligence.

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