Refering to Singapore’s Straits Times Index (STI), after 2746 was broken down on 19/8/2008, it was indeed "all hell break loose" as anticipated. That is the fantastic side of Technical Analysis because IT WORKS!

Looking at the current weekly chart, STI merely dropped by 11.6 points for the week. But on the daily chart, it presents a very volatile week, having plunged to as low as 2308, before closing at 2559. The week high and week low is a whopping 268 points difference.

The Candlestick bullish hammer seems to suggest in the short term, there may be some upsides. But the upsides are likely to be capped by the overall down trend of the STI chart. STI will likely be caught in between the Fibonacci 38.20% retracement of 2900 and 2278 range in the medium term.

It is still too early to determine if STI has bottomed out because its medium-term down trend is basically still intact. However, last week’s low at 2308 is a possible bottom to watch out for if it can be maintained, breaking down of which the down trend will zoom down like Formula One’s speed.

More daily bars are required before the direction of STI can be ascertained.

In the meantime, there is still some fast money to be made, but the trading horizon must be kept short with strict stop loss order.