Ernest Lim's investing blog

Unique insights into SGX small caps

Seng

Ernest’s market outlook (25 Nov 16)

el15

Dear readers, S&P500 hits record high! Will STI follow suit? Read on for more.   S&P500 Index Just to recap what I have mentioned on 11 Nov 2016 (see HERE), I wrote “S&P500, after closing below its 100D exponential moving average (“EMA”) for six consecutive days, surged with volume and closed above its 100D EMA (currently 2,137) for five consecutive days. 21D EMA has just formed a golden cross with 50D EMA on 10 Nov 2016. Another positive feature is that the directional indicators (“DIs”) have turned positive with ADX closing at 28. S&P500 has closed above 2,157 for three […]

Ernest’s market outlook (11 Nov 16)

el15

Dear readers, Notwithstanding most experts’ dire predictions that Dow may plunge as much as 10% on Trump’s win, Dow closed at a record high AFTER Trump’s win! Read on for more.   S&P500 Index Just to recap what I have mentioned on 28 Oct 2016 (see HERE), I wrote “S&P500 closed below 100D EMA (currently 2,136) yesterday. As mentioned previously, S&P500 has not closed below its 100D EMA for three consecutive trading days since 1 Mar 2016. Thus, the price action around its 100D EMA is worth watching. After forming a death cross, 21D EMA is moving apart from 50D […]

Ernest’s market outlook (14 Oct 16)

el15

Dear readers, Although my market outlook is a biweekly issue, the technical outlook for some technical indices has deteriorated and I view it timely to update my clients. See below.   S&P500 Index Just to recap what I have mentioned on 7 Oct 2016 (see HERE), I wrote “all the exponential moving averages (“EMAs) are converging and trending higher. ADX has slipped from 22 on 23 Sep 2016 to 20 on 7 Oct 2016, indicative of a lack of trend. Indicators are neutral and stuck in a range. Although the trend continues to be an uptrend until proven otherwise, my […]

Ernest’s market outlook (7 Oct 16)

el15

Dear readers, The recent selective small cap rally seems to be as hot as the China property market! For those who have not benefitted in the recent selective market rally, is it too late to jump on the bandwagon now? Let us take a look at the various broad market indices first.   S&P500 Index Just to recap what I have mentioned on 23 Sep 2016 (see HERE), I wrote “S&P500’s volatility has increased since 9 Sep 2016. RSI has increased around 32 on 9 Sep 2016 to 52 (a neutral level) on 23 Sep 2016. All the exponential moving […]

Ernest’s market outlook (23 Sep 16)

el15

Dear readers, S&P500 reached my measured technical target of 2,120 and rebounded. STI continues to be trapped in a range. What’s next?   S&P500 Index Just to recap what I have mentioned on 9 Sep 2016 (see HERE), I wrote “The break below 2,157 on 9 Sep 2016 points to an eventual measured technical target of around 2,120. With this sharp plunge, RSI has declined from 59 on 19 Aug 2016 to around 32 on 9 Sep 2016. It is noteworthy that since Aug 2015, S&P500 typically staged a rebound when RSI reached around 27 – 32. Amid the sharp […]

Ernest’s market outlook (9 Sep 16)

el15

Dear readers, S&P500 finally broke the (one month plus) tight trading range 2,157 – 2,194 with a 2.5% drop yesterday. What’s next? Read on for more.   S&P500 Index Just to recap what I have mentioned on 19 Aug 2016 (see HERE), I wrote “S&P500’s EMAs continue to move higher with a constant degree of separation which is a positive development. However, I am (increasingly) wary of two main factors namely, A) ADX continues to decline from 17.1 on 5 Aug 2016 to 15.9 on 19 Aug 2016, indicative of a lack of trend. B) Indicators such as MACD, MFI […]

Ernest’s market outlook (5 Aug 16)

el15

Dear readers, S&P500 has registered another high whereas our STI plunged 117 points, or 4.0% over the past two weeks. How will the markets move from here ? Read on for more.   S&P500 Index Just to recap what I have mentioned on 22 Jul 2016 (see HERE), I wrote “it is good to see that all its exponential moving averages for the S&P500 (“EMAs”) are moving higher with a good degree of separation. However, I am worried by the low ADX and the bearish divergences exhibited by the indicators such as MACD, MFI and RSI. Nevertheless, the break above […]

Ernest’s market outlook (10 Jun 16)

el15

Dear readers, Two weeks ago, I mentioned that I have increased my stock holding from 36% to 80% by accumulating on one stock on weakness. I have since taken profit on this single largest stock holding and have pared my stake in another stock. Besides the stock sales, I have increased my stake in another stock on weakness. All in, my percentage invested was reduced from 80% to approximately 31%. I am unlikely to exceed 50% invested in the next two weeks, unless I spot some extremely attractive opportunities as I remain cautious on the general market. Read on to […]