Latest thoughts from our resident Queen Chartist, Ploy. She was spot on last week with the change in sentiment and still forecasts a recovery until mid-November.

I wrote this comment after having arranged piles of sandbags around my house, located only 200 metres away from the Chao Phraya River. We really should have Futures contracts on sandbags and rubber boots. The price of sandbags has tripled over the past 2 weeks while the price of rubber boots doubled. Bottled water, canned tuna, eggs, and instant noodles are scarce. And, I have no wonder why the stock market is still open, based on the fact that I had to travel through bullets and bombs to work during the Red Shirt’s protest last year. The market was open until the Red Shirts put a fire on the first floor of the SET building. THAT is when the people over there knew they had to close the market. Note: The SET just announced today that if 12 brokerage firms were unable to send orders on behalf of clients then the market would be halted.

Ok, enough of nagging and mumbling.

I have not yet cancelled last week’s opinion. I maintain my comment that the SET may rebound until mid November, where there is a cycle awaiting, and the key resistance of the SET remains 1,030-1,035. While the SET was closed for holiday on Monday 24th October, the Dow Jones and the Hang Seng rose quite sharply and breached above their short-term barriers (11,717 for the Dow and 18,425 for the Hang Seng). However, I’d love to see other major markets break out above their resistances as well, particularly France’s CAC40, Germany’s DAX, and Japan’s Nikkei. The barrier against the CAC40 is 3,296, the DAX at 6,106, and the Nikkei at 8,912. Such breakouts will confirm that the world’s equity markets may continue to rise significantly for a longer while.

This week, I’d like to update my SET & Brent oil price chart. The Brent oil price has backed down from its barrier at 116 and its downside is as low as 101-99. Recall that the plunge in Brent oil price is correlated with the plunge in the SET. So, whatever you do this week, keep your eyes on the Brent oil price.

Also, along the way up, there are several gap resistances in the SET. Right now, the SET is testing the gap resistance at 927-936. On breakout above that, another gap resistance awaits at 972-990. We have to break out above these resistances, gap by gap, on the way up to 1,030-1,035.

Good luck with your trading and I hope I stay dry until next week.   🙂

Thanks Ploy! You can contact her directly @ ploy@thaicapitalist.com