1. The STI Index is likely to trade in tandem with the Shanghai Composite Index (SSEC). The chart of SSEC suggests there could be further downside.
2. There are no changes as per the outlook mentioned on our "Regional Indices" on 2 Sept 2015. The weekly chart below may shed some light why the next level at 2,665 should be closely watched.
3. The situation now is probably the same as during 3Q2011. Then the STI index fell about 20% from the 3220 peak. That was owning to fears of contagion of the European sovereign debt crisis to other members of the PIIGS
4. The recovery or bottoming process, if the STI index could be supported near 2,665, could probably take months to unfold. The potential recovery could unfold in the the similar time taken when the STI index recovered after 3Q2011
5. Watch for a potential higher low to form at the 14-period RSI on the weekly.
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