The Straits Times Index (STI) went up and went down several times this year so far. It had been a pattern.
The STI went down on three dates in the intervals of two to three months. And each time the STI went down further from the previous down cycle. This was a downward trend. See table:
| Date | STI |
| 25 March | 3,182 points |
| 31 May | 3,117 points |
| 28 August | 3,056 points |
One month before the above dates, the STI went up. Then it crashed the following month.
| Date | STI |
| 20 Feb | 3,278 points |
| 29 Apr | 3,407 points |
| 25 July | 3,381 points |
The STI went below last year’s closing on 28 August 2019. The STI ended last year at 3,068.76 points. On 28 August 2019, it was 3,056 points.
Now the STI is climbing and it is hovering at 3,200 points on news that there will be some form of trade deal between US and China.
Will the STI maintain the upward momentum this time round? My sense is that another crash is the offing following the historical pattern above. Another reason for my pessimism is that GDP forecast for Singapore for this year is 0 to 1.0%. This is weak growth compared to 2018 of 3.1%.
Copyright © 2019, limkimtong for Living Investment
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