3 Mar 2008

From ccloh's "silly" theory:

have you noticed that each time the STI index fall rate is faster than the ADL fall rate, the next moment there will be a technical rebound. look at the 3 sharp dip on the index line from the chart.

i'm using some "silly" method to judge it. measure the difference distance between the 2 lines. tendency could start a long position there and sell on rebound strength.

"silly" method looks like anything more than 1cm difference between the 2 lines, will change direction next. applies for both directions also.

Let's call it S-theory, it is more professional this way.

The STI needs to pull about 15mm away from ADL in order for a technical rebound. If you look at the chart above, it is very near to the low 2844. If the S-theory works fine, we shall have a technical rebound on 2820 - 2840 region providing ADL does not dip much (about zero ADL change).

It is simple. If ADL dips together with STI, the 'correction' will be harsher. For example if ADL dips -400 tomorrow and STI dips -80. The rebound will not take place because the difference between ADL and STI is not equal or greater than 15mm.

Let us see whether STI is 'silly' or not.