It may take another quarter of consolidation before the STI makes its break. Interestingly, a successful breakout indicates a significant upside objective.
Elsewhere, directional movement indicators suggest that the chart of the yield on the 10-year US treasuries is turning increasingly weaker. Here, ADX has flattened at 14, as DIs are negatively placed, an indication of a potential decline. To confirm this, quarterly momentum has broken below its equilibrium line and continues to fall.
While markets can change their mind, the chart pattern is currently weak. The 10-year yield has fallen below both its 50- and 100-day moving averages at 3.1741% and 3.6671% respectively. Both moving averages could start to draw together in preparation for a negative cross. The yield is attempting to break below the next important support at 3.44%. If this materialises, the downside objective would be indicated.
