Market is full with unexpectation, sometimes it can't be explained logically. Last Friday (16/7/10), Dow Jones down for more than 2%, however, our cash market seem didn’t show any response. With the plunge of US market, cash market falling of 3 point and closed at 1333.5 compare to closing on Friday at 1336.5. Here is the question, why our market was not affected by fall of Dow Jones? Such a weird phenomena recall something I read before, "in an uptrend, investors are ignoring bad news and tends to respond to good news only." and I just wondering are we in uptrend market now?
Besides that, I had noticed today our cash market volume had achieved more than 1 billion of total shares traded today which is quite high compare to previous trading days. I always pay my attention to the total volume of a market because I know that trend can be sustained only with the support of higher volume. Rising prices of the shares associated with higher volume, we shall say that the bull was in charge, and investors are so optimistic toward the market and they willing to pay higher price to buy stocks due to they believe the market can rise more higher in futures. However, it is different story if a price doesn’t goes up yet volume goes up. This might indicate sellers are becoming enthusiastic to sell off their shares and it possible to pointing a major reversal. Nevertheless it still needs further evidence to judge the validity of the reversal trend from the holding power of daily chart market support together with volume was come from blue chips shares rather than penny stocks.
Without continuous good news from US market, our cash market was consolidating within the range of 1330-1340. The price level was still moving within the upper band of the Bollinger bands which shows the market still moving in a bull territory so the domination of bear can be ignore in nearer term. I would capped my short term support at 1330 while long term support at 1312. I think the market will trigger my short signal if the market playing below 1330 for quite some time.
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