STI After "Taper Tap" Rally

To the contrary of general consensus, US is experiencing a "taper tap" rally after Ben Bernanke stated that the central bank will start trimming its bond buying program by $10billion per month starting Jan.

In my opinion, modest tapering in the preset of an improved economy is a positive step towards interest rates normalization. With the central bank persistence to hold interest rate to near zero(as long as unemployment exceeds 6.5%, inflation no higher than 2.5%), this will also reduces the uncertainty premium.


STI price action seems to have found its support and is currently trying to break its 10dma(3084.25). Macd showing a possible bullish crossover and RSI broke out from its oversold position. If 10dma is broken convincingly, a trend reversal will be confirmed, if not, more downside will be imminent. Be cautious.

3 comments :

  1. Yesterday was the start of the santa clause rally phenomenon. It did happened accordingly to tradition afterall.

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    Replies
    1. Hi SGYI,

      Hope the current "santa claus rally" transits to a capricorn effect and not to a black swan. Wishing you a merry christmas and a happy new year!

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    2. Hi Hayden,

      Thanks! Merry Christmas and happy new year to you too! :)

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