please also note on important data, such as as China PMI and US non Farm payroll, to have a gauge on the markets.
It will be a holistic approach as the current market is driven by macro views.
STI Index - quick update on levels to watch in the near term.
- STI index holds well at the mentioned 2760-2790 levels for now
- Needs to break above 2860 or mid Bollinger band for further upside
- MACD hooks up instead of forming a bearish crossover for now.
As per our morning announcement on 25 Sept 15, the focus could be on the trading range of 2760-2790 once the STI index trades below 2800.
In the near-term, the STI index has broken out of the "bearish triangle pattern". The MACD histogram is in correction mode and a potential MACD bearish crossover awaits.
In the border picture, the STI index could be trading in a fashion similar to that of 2011 (see diagram 2). A "left shoulder" appears to have formed for now.
Conclusion:
No changes as per our note on 2 Sept 15.
A break below 2,760-2,790 and failure to recover above that could suggest further downside, possibly towards the 2665 target. Estimated timeline: 4Q15.
Diagram 1 
Diagram 2
Diagram 3 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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