Dear readers, the Singapore Straits Times Index (STI) continued to head south today, closing the day 1.39% lower.
The performance of STI is rather different from regional and other overseas stock markets as these other markets seem to have regained some ground based on the closing of their stock indices today.
However, when stock markets rebound after a massive stock market rout, there could be some reasons behind the rebound that investors may not know.
First, there could be covering of shorts.
Secondly, some investors may want to buy on the cheap, unafraid to catch a falling knife.
On a personal note, I believe the rout we have saw on the Singapore and regional stocks markets yesterday are but just the first of more corrections to come.
At the current level of the STI, I think the Singapore stocks markets are not cheap still. I would encourage investors to take note of the psychological level of 3,000 for the STI. Once this 3,000 level is broken, more downside will come and 2,800 of the STI level is considered a good entry point to start investing in tranches.