There is no doubt that chart watchers will be busy enhancing their analyses, this week, of the Straits Times Index. Among the key questions is whether the dips buying will still continue. If so, can they be eventually strong enough to assure that the 2,700 mark index is convincingly reclaimed.

In a logical manner, central bankers and government spin doctors would probably work too hard to make sure that the impact can be minimised because there is no any reason to wait for another negative economic data this coming weeks. The possible answer to the first key question is that the dips buying must be surely continued and it will just be a matter of time that momentum and liquidity push the index to more than 2,700.

Helping the process all along will increase the number of positive reports that effectively state 'buy Asia'. An example is the DBS Group Research, wherein in its 17 September fourth quarter outlook, it said that the V-shaped recovery of Asia continues at its full strength.

“We do not subscribe to W-shaped scenarios for the US or Asia, especially the latter”, stated DBS. “In short, we never regarded this downturn as a garden variety recession; rather a 'shell-shock' arising from the Lehman Brothers debacle and several one-off factors related to China, and have always looked for the sharp rebound that is now under way”.

Still, signs of buoyancy abound are pointed out in a column last week. In an indirect manner, this was the points of the ‘sell’ of DMG & Partners last Wednesday in the Singapore Exchange.

The DMG had pointed out that the value per unit had traded in at 79 cents in July and August, which is down from $1.08 on 2008 financial year of SGX.
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