Saturday, May 7, 2016

The STI has Made 10 Straight Days of Decline

The STI achieved an amazing feat on Friday.
 
It fell for the 10th consecutive trading day.
 
It started falling since 22 April when it was at 2960.78.   It closed at 2730.80 on Friday, making a total decline of 229.98 points or 7.8%.   The average drop per day was 23.00 points.   The RSI (14) indicator (Relative Strength Index) was at 15.9% on Friday. 


The STI daily chart from 20 April 2016 to 6 May 2016.


Record Streak?
 
Could this be the longest streak of consecutive daily decline for the STI?
 
Past data on the STI show that this is only the second longest streak since 1995.  
 
The longest streak occurred from 5-22 September 2000 in which the STI declined 14 consecutive trading days.   It fell 257.07 points, giving an average decline of 18.36 points per day.   In percentage terms, the total decline was 11.7%.   The RSI (14) indicator reached 0% on the last day of the decline.   It then staged a small rebound of 3.7%. 


The STI daily chart from 3 September 2000 to 25 September 2000.
 
Excluding the current, the next longest streak of consecutive daily decline lasted 8 trading days.   There were a total of 5 such cases since 1995.   2 cases occurred in both 1997 and 1998 and the remaining case happened in 2011.


Possible New Record?
 
Will this current streak of consecutive daily decline equal and then break the existing record of 14 days?  
 
For this current streak to match the existing record, the STI will have to drop in the first 4 days of next week.   If the current streak is to set a new record, the STI will then have to fall everyday next week.
 
It has dropped only about 100 points this month.   It still has ample room to fall if it decides to revisit its February low.

However, in its correction that started in January this year, when it reached about 2729 (which is very close to its value of 2730.80 now) on 7 January, it bounced up slightly the following day.  

Furthermore, it has already dropped 229.98 points this time.   Everyday now will be harder than the last for it to drop.

So, will the STI resume its drop next week in its quest to set a new record?   We will wait and see.
 
 
 
 


2 comments:

  1. If you check SGX how much short sales for the week and last week, i think you dare not buy now.
    i do.

    ReplyDelete
  2. The STI ended up on Monday and thus terminated this run of consecutive daily decline.

    Nonetheless, this streak of 10 days' decline stays as the second longest since 1995.

    ReplyDelete