On 11 August, the Straits Times Index closed at 5,774.21. A fresh all time high, and the fifth straight week of gains. If you've been holding Singapore blue chips this year, your portfolio has probably never looked better.

The rally has been powered almost entirely by one group of stocks. Bank earnings came in strong, trading volumes stayed heavy, and every green candle made it feel like the good times were just getting started. That feeling is exactly what makes this moment worth paying close attention to.

Just a week after the STI's record close, European Central Bank economists published something far less celebratory. On 18 August, they warned that today's record valuations, driven heavily by AI enthusiasm, are likely heading for a correction.

Their reasoning wasn't about a crash being imminent. It was about pattern recognition. They pointed to the railway boom of the 1840s, the 1920s electrification rush, and the dot com bubble of the late 1990s. In every case, technology reshaped the economy, and in every case, the market ran ahead of what was actually real before snapping back.

Timing a top is nearly impossible. But recognising when a market is stretched is a skill you can actually build.

This is where Weinstein's stage analysis becomes genuinely useful, not just a chart theory you skim past. Stage 3 is the distribution phase. Prices are still near their highs, the headlines are still positive, but momentum quietly starts to slow. Smart money begins offloading into the strength while retail investors are still buying the story.

It doesn't announce itself with a crash. It shows up as choppier price action, weaker follow through on up days, and rallies that fail to make convincing new highs. Right now, nobody can say with certainty whether the STI is entering this phase. But a record high paired with a very public correction warning is exactly the kind of setup where it pays to watch closely instead of just riding the wave.

DBS reported record second quarter profit of S$3.08 billion on 6 August, up 9% year on year, with total income crossing S$6 billion for the first time. OCBC and UOB posted similarly strong numbers around the same window. Since banks make up such a large chunk of the STI's weight, their earnings essentially carried the index to its new high.

That's worth sitting with for a second. A record breaking index isn't the same as broad based strength across every sector. When a handful of heavyweight stocks are doing most of the lifting, the index can look far healthier than the market actually is underneath.

With 20 years of investment expertise, Caleb Gan is a seasoned professional in stock trading. The hard work and dedication were recognized when his partner and him were featured on Singapore TV Channel 9's MoneyWeek, a prominent financial program. He's also had the privilege to share insights on radio stations like 93.8Live, Capital 95.8FM, and 96.3FM through live interviews about stock market investments. Beyond that, he's also the co-founder of NDU System, where he continues to help others navigate the world of trading.

If you’re serious about improving your results, the difference usually isn’t effort—it’s guidance and structure. Opening an account with us isn’t just about access, it’s about stepping into a system that helps you see the market with more clarity, avoid common mistakes, and make more confident decisions. Instead of guessing what to buy or when to act, you’ll start understanding why things move, and how to position yourself ahead of it. If you’ve been feeling stuck, inconsistent, or unsure… this is where that changes.

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Until next time,

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