STI – Convince me.

Someone was asking me today – is the market going to reverse soon? He had heard rumors. He later bought into an index component share late noon and ride up 4-5 ticks. Just before STI wrapped up, we have a short conversation again on MSN. I want to – the bull in me – believe that we’re seeing a short-term bottom and posed for another rally. But a quick review of the charts proved unconvincing… yet.

Downtrend Channel

5-6 index component exhibition a similar characteristic to the above chart diagram, some more optimistically touching the top tier of the trend range. But that’s the visual scream for me – touch. Oh yea, you know, like when your partner gives you a light caress. Good under times of bliss but in crisis, a tight grab would have been much better. If I adopt a shortist’s stance, I’ll be getting ready to short-sell the components again at the first sign of any negative sentiment. But being sidelined, I’m cautious about buying anything now. STI has been relatively flat, and one market characteristic to wait for is when the strength tends towards one direction too much, a slowdown can be just another period of gathering momentum for a downturn.

More optimistic people out there? Sure – just 15 minutes ago, a local meetup group’s board had these words on them:

Feel of the Market:
Confirmed Rally – Beginning Week 3
Index charts show consistent accumulation
New leadership is emerging
No liquid leaders from last cycle have broken out yet
Bottom has been confirmed through index and leadership action

It appears there’re still many who hold hope for a near term rally again. I’m ready to consider another perspective – if you’ll stay with me – that STI may go below 2745 (an intermediate support cited in the BT a few days ago). Between the jargon of reversal and retracement, I’m stuck in my teeth with the latter. This is the bear, no? This is the Yogi shaking his furry bum at us no? This is Kobe beef being burnt – fat on the pan no?

Enough… sorry, I’m getting ahead of myself. So I’m guessing a break below 2745 in the days to come. Good reason to take a break or go on a short ETF on the S&P or NASDAQ, or take a stance on the other side and join the shorting – CFDs, put warrants… whatever you choose. But tell me to polish my horns for a bull charge? Not yet… I can still smell a matador some where… close.

Or maybe I’m just bored on a sideline seat, and I’m thinking thoughts that never will be. We’ll see, won’t we?