SGX: Final call for boarding!

It's been a while since the last update on the SGX, the Singapore Exchange. After a few futile attempts to clear upper channel resistance, SGX has been in consolidation mode for months. Last session saw a breakout of a wedge pattern on decent volume, and may be the beginning of a rally of sorts.

Bad Weather Overhead

Unlike the last time, this may not be a rocket-launch, but a gentler takeoff - lots of bad weather overhead. In the very short-term, a back-test is possible. Resistance levels to the upside are at 7.66, 7.90, upper downtrendline, 8.11, 8.5 & 9.0

Eventual target of 9.0 is possible, especially on a break above the downtrendline. This blog usually doesn't cover individual stocks. If you are curious, here's why i cover this stock.

Chanced upon a Fractal in Shanghai

Elliott Wave Theory describes markets as fractals.

"A fractal is a geometric shape that can be separated into parts, each of which is a reduced-scale version of the whole... ...that movements of a stock or currency all look alike when a market chart is enlarged or reduced so that is fits the same time and price scale. An observer then cannot tell which of the data concern prices that change from week to week, day to day or hour to hour..."

Take a look at this 30-min SSEC chart from today:

And now, the weekly SSEC chart:

Take your time to study the two charts. (Compare the boxed area in the first chart, with the second chart.) What do you see? Could we be looking at a similar rally? I will not be surprised, but please donot trade on that basis alone! Examine your reasons, formulate your own plan, and make your decision.

All the best!

Suggested Further Reading:

"A Multifractal Walk Down Wall Street"

Elliott Wave Tutorial

Elliott Wave Video Crash Course

(Video) China's empty city

Although bullish on China in the medium-term, the Chinese market may head back down in the longer-term, before recovering. Here's an example of some of the issues dogging China.

Hang Seng Index Very Short-Term: Resuming Upwards

Since the bounce off the lower parallel channel, HSI went vertical and then consolidated in a 1000-point range. In the last session, price gapped above the congestion, setting up a resumption of the move upwards for the very short-term. Have a look at the closeup of the HSI daily chart.

We can expect a move towards 21000 initially, then stiff resistance around 21500 (or where the upper trendline is). An eventual break above the upper channel line, will result in a medium-term bullish setup.

Refer to this last post for the big picture. Meanwhile, Shanghai is on track towards 2700, with a stumble or two at 2600.

Video (Forex): How to Combine Wave Analysis with Momentum Indicators

Every Friday, Jim Martens, the editor of Elliott Wave International's forex trader-oriented Currency Specialty Service, records a market overview video for his subscribers, usually with lots of educational insights into the currencies markets.

In this classic free 5-minute video, Jim Martens shows you how to combine Elliott wave analysis with RSI and other momentum indicators.

Watch "How to Combine Momentum Indicators With Elliott Wave Analysis"

NOTE: You need a free Club EWI membership to watch.

"Kimchi Curry" anyone?

Previous posts noted the remarkable similarity between the Bombay SENSEX and the Korea KOSPI indices. Both looking equally bullish, and both poised at crucial junctures. While price could go eitherways here in the short-term, they are both likely to go the same way. Have a look at these maternal twins below.

Elliott Wave Count

Having dropped in 3 waves during the financial crisis, SENSEX and KOSPI have turned up impulsively and look to be completing 4 waves so far. A sustained break above the upper trendline has upside targets as shown in the charts above.

However, do note that the supposed wave 5 has completed the minimum target (to exceed wave 3). Any significant correction here, would be great buying opportunities for the long-term.

Meanwhile, you may want to sample the basic staples of Indian and Korean diets - Curry and Kimchi respectively - before they become all the rage! Caution: Both are spicy stuff. (Similar phenomenon happened with all things Japanese, during, and after the Nikkei boom days)

All the best!