Dear Readers,

“An Ocean Ship Turning” was the title of my 25th May Weekly review and market has lose over 116 points.

Let ‘s look at the charts and see if sell-off over or another wave of selling continue.

STI Open: 3,375.05

STI High: 3,375.05

STI Low: 3,326.84

STI Close: 3,333.67

Price Change: -58.44

Percentage Change: -1.72%

Total Volume: 1.225 billion

Weekly chart MACD histogram is ticking down. Both 13 weeks and 26 weeks exponential moving average are point down.

Daily Chart MACD histogram are looking ugly and STI are out of the lower channel (Dr. Alexander Elder envelope),

STI had peaked on 16th Apr at 3,549.84 and since that day we have lose over 191.52 points, that is about 5.4% correction from the peak.

The 3,300 to 3,330 is seeing another test as the market continues its choppy action.

I believe that we're in a bear market - but no bear market goes down in a straight line.I sense that one of such rallies is developing now.

What does all of this mean from a trading standpoint? If you are a bear, be sure to protect your profits. Bear market rallies tend to be relatively short but very sharp (I have closed all my short positions).

Either take profits or use protective stops.

If you are a bull, hurting from the latest down move, use rallies to cut losses and get out. And if you're not bogged down in losing positions, consider nibbling on the long side.

I will looking at some STI blue chips and mid cap stocks for this week.

Best wishes for the week,

Divergence Trader

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