Wednesday, September 05, 2007

Inaccuracies in STI

Funny things happens.

Today, STI wasn't tracked properly. According to an announcement made by SGX at around 6pm plus, they said that they had investigated and found that STI did not accurately reflect the value of its components in the morning. The index was 3,376 at 1230pm, when it should have been 3,437 (a huge difference of 1.27%!). This error was rectified at the start of the afternoon trading session. The reason? The error was traced back to an isolated computational error from the corporate action of a component stock.

World class financial hub huh? It's too much to expect SGX to slap some punishment on itself, but not even an apology from them? I remember SGX slapped some fines on a certain brokerage firm when it caused STI to plunge because they are selling DBS at 20cts or something. Yeah, life's unfair. Live it or quit it.

Saved some asses today. I know some people had bought put warrants. This small episode saved their put warrants from going down so fast. They have the whole morning to sell off their warrants and buy call warrants to arbitrage the error. Wanted to buy call warrants too, but wasn't tempted enough to buy. Really had enough fun for warrants, so won't touch it even though it's such a golden opportunity. Mainly it's because I don't have time to monitor, and time is the essence when trading warrants.

Anyway, STI closed above the resistance level when it closed up 69 pts (2%). Volume is still low but at least it's higher than yesterday's at 2.1 billion. A lot of STI components like property and banks went up a lot. My watchlist was mainly green, but the rally wasn't that broadbased. Maybe it's just me. Construction quite lethargic today, not here not there. Lianbeng losing its momentum. It's like that lah, if there's still no contracts and they keep dragging their feet, construction stocks will drift lower and lower.

A BB bought up yongnam though. JP morgan bought back yongnam, increasing its percentage level from 8.50% to 9.33%. I said "bought back" because I remembered they sold off their stack during the market downturn. I posted it on 24th August that JP morgan pared down their stack from 9.38% to 8.50%. So, no big deal. Sell first during market downturn and buy more when market is recovering.

Straits asia's chart looks not bad leh. From weekly, looks like a symmetrical triangle, coupled with low volume. Though support at 1.380 is broken since I last mentioned this, it didn't go down lower but instead started to rebound from there (on daily).

Looks set to break out of triangle on the upside, from both weekly and daily. I did a fibo retracement and found a possible resistance at 1.42 level. Should be quite a significant resistance because the price of the stocks hit and tested it 4 times around 1.42, acting as both support and resistance level. Should see some action by this week or latest middle of next week.

Dow futures quite red, -76 as of now. Europe is pretty bad too, averaging around 1% drop. Looks like Dow cannot make it tonight. Let's hope to see STI close a higher low, so we can head up higher :P