SGX Capitulation

Personally I subscribed to the idea that a true bottom is formed when capitulation take place.

Let have a look at the defination of caputulation in investopedia again:

Military term. Capitulation refers to surrendering or giving up.

In the stock market, capitulation is associated with "giving up" any previous gains in stock price as investors sell equities in an effort to get out of the market and into less risky investments. True capitulation involves extremely high volume and sharp declines. It usually is indicated by panic selling.

After capitulation selling, it is thought that there are great bargains to be had. The belief is that everyone who wants to get out of a stock, for any reason (including forced selling due to margin calls), has sold. The price should then, theoretically, reverse or bounce off the lows. In other words, some investors believe that true capitulation is the sign of a bottom.


We do not have 'extremely high volume' and 'sharp declines' now. Instead, we have a slow and steady plunge with trading volume almost dry-up.

To quote a word from Brother 7s: DJ is overbought, STI is oversold. Until both are extremely oversold, all, include the hardcore value/longterm investor is giving up, we are not going to have a solid bottom.

Meanwhile, just try to avoid falling into bear rally by controlling our greed.