Bear market is here - be patience

The SGX market has not been doing well since April 2015.  It reached 3,549.85 on 16 April 2015 and started the descend thereafter.  Last week has been particularly bad.  SGX is not alone, the global market has not been doing well and the latest sell-off was due to fear of slow-down in China after China's Central Bank devalued RMB by 1.9% against US dollar on 11 August 2015.  Last night S&P500 dropped by 2.52%, Dow downed by 3.12% while NASDAQ downed by 3.52%.

Below are 3 charts on STI:
- Chart 1: STI monthly chart for the last 10 years with 10-month exponential moving average (EMA)
- STI monthly chart for the last 5 years with 10-month EMA
- STI weekly chart for the last 2 years with 10-week EMA

The EMA is the red line on these charts.

On hindsight, it is clear that one should be selling all stocks by May 2015.  I am lucky to have raise the cash level to 70% in early July and to 90% level in late July.  YTD my portfolio only dropped by about 1.3%.

A good lesson for me is that I should have paid even more attention to the chart, market trend and technical analysis.

What do we do next? Just be patience and wait as we are already in a bear market.  Wait for the daily transactions volume to reduce to a low level, wait until the STI and FTSE ST All Share Index rise above their respectively 10-month EMA and 10-week EMA.  Then, it will be the God-sent opportunity for you to buy stocks in near rock-bottom price.  This is an opportunity not to be missed.    Based on the charts, the next support level for STI is about 2,600.

     Chart 1: STI monthly chart for the last 10 years

      Chart 2: STI monthly chart for the last 5 years

     Chart 3: STI weekly chart for the last 2 years