Tuesday, December 04, 2007

STI flattish, up 6.31 pts

Today, STI went up 6.31 pts (0.18%) to close at 3527, with a very low volume of only 1.38 billion. Dow closed down 55 pts so in the morning, I had expected STI to plunge, maybe to test the new-found resistance turned support. But the most it did was to touch 3500 and came bouncing back, especially after HSI opened at 10am.

There are some things to be happy about, and some things to worry about. First of all, Dow and STI is becoming less volatile. In the past few weeks before this, both are moving up and down violently, sometimes up to 2%. To see both closing at this small volatility is to see a storm calming down to a light drizzle, a welcomed change indeed. This is something to be happy about.

What I'm worried about is that while STI is climbing steadily, the volume keeps decreasing. This shouldn't be what is happening in a bull market. In such a market, rally is accompanied by surging volume while declines are accompanied by decreasing volume. We all need to be careful when volume is clearly diverging from the rising STI. This is a fool's rally.

An announcement to share:

1. BBR announced that it had won a contract awarded by URA to construct a common service tunnel with a contract sum of S$189,600,000 and lasting for 40 mths, ending on sept 2010. Hello, S$189 million contract is not a small sum, how come nobody 'knew' it before the news are announced? BBR closed flat at 0.080 today. Strange huh? haha, looks like the news didn't translate into action for BBR.

Dow's future is -74 pts now.