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N.B. Above Chart is abstracted from
NextView Program
Sorry folks for didn't do the updating last week,
for I was too busy doing the IPOs. Traditionally this month will have many
holidays and I will be going for holidays by mid-end of this month, so once
again my apologize again, the updating may be rather irregular this month.
This week
will be rather important for global stock markets, for we have Fed meeting
plus some important economic data on the pipeline. In general, stocks are
likely to rise early next week with another interest rate cut all but
guarantee from the Federal Reserve; but the strength and durability of any
gains will hinge on the central bank's outlook for the economy and on
whether there is any further fall out from the credit-market meltdown. There
are a series of economy data to be released. Starting with Monday's Pending
Home Sales, Tuesday's October Whole Sale inventories, Thursday's Retail
Sales and Friday's CPI data, all these data will have impact to the market.
On Thursday, we will also have Quarter result from Lehman Bros. which may
rock the market if there is additional provision write off for the sub-prime
mortgage. Indeed, the movement this week will probably detect what will
happen for the month of December. So, folks stay tight and enjoy the show!
Personally, we believe there will be continue rally this week after the Fed
meeting (if Fed decides to cut rate!), for year end is near and
traditionally window dressing will kick start by 3rd week of December.
Technically most of the global indexes are staying at their neutral zone,
but slightly tilted to bullishness. So if there is a rally this week it will
likely to carry on till end of the month. In fact, Dow Jones Transport index
has already turned bullish, which may give us an advance hint on the market. As for STI,
the recent high of 3622 is an important level. If STI manages to cross above
3622 this week, we could expect a continue rally till end of the month.
Failing which, if STI breaks below 3300, the bear will continue to rule. The
development next one week, will be very crucial for the near term movement in STI,
and could also identify the exact wave structure for the next few months. So do trade
carefully and pay attention to the market development. If you are an investor, my advise is to stay away from the market
until the wave structure is confirmed.
However, if you are a trader, this could be the best market you are longing
for, but do be careful and do not overtrade. As for STI, the first
resistance will be at 3622 follow by 3720. Support are at 3300 follow by
3250.
The following are the support and
resistance to watch for Dow Jones, Hang Seng and Nikkei next week.
Dow Jones Hang Seng
Nikkei
Resistance 14000
30000 16330
Support 13250
27455 15365
As for STI the resistances and supports
are as follow:
Resistance: 3622, 3650, 3700
Support:
3550, 3462, 3400, 3380, 3300, 3250, 3200
Events To watch For The
Coming Week:
- The movement in Dow Jones
Industry and NASDAQ..
- The movement in
currencies, oil and
commodities price.
- The
economics data, such as Monday's Pending Home Sales, Tuesday's October
Whole Sale inventories, Thursday's Retail Sales and Friday's CPI.
-
Building up on expectation for Fed to cut rate on their Dec 12 meeting.
The following are two
possible wave counts on STI as at to-date:
- Preferred Count (70% probability)-- bullish count
My preferred count calling for a
top at 2502 (on 7/1/2000) as wave ((1)), it then follow by a two year
sell off on wave ((2)) to 1197 (on 28/9/2001). The index has then entered
into an impulsive wave ((3)) that is still in progress. Wave (1)
of ((3)) ended at 1902 (12/3/2004), it then followed by wave (2) till
1690 (21/5/2004), the impulsive wave (3) then kicked start and ended at
2666
(5/5/2006). It has then followed by another sell off till 2277
(16/6/2006) on wave (4). The wave (5) has started and could carry
until March'07 before a bigger degree wave ((4)) emerge.
- Alternate Count (30% probability)--
bullish count
My alternate count calling
for a top at 1902 (on 12/3/2004) as wave 1 of wave (1) of wave ((3)). It
had then followed by wave 2 that ended on 1690 (21/5/2004). The impulsive wave 3
of wave (1) then started and had ended at 2400 (5/8/2005). It had then
proceeded with wave 4 that ended on 2190 (28/10/2005). The wave 5 of (1)
of ((3)) has ended on 5/5/06 at 2666. Wave (2) has then started and
ended at 2277 (16/6/2006). We are now at the very beginning of wave (3)
of wave ((3))! If this count is correct, we
are indeed in the very early part of a Grand Super Cycle, which may
carry us into the year 2010 on the wave ((1))- ((2))- ((3))- ((4))-
((5)) basis. A clearer picture can only be seen after the completion of
wave 5 and the subsequent development of the down trend correction.
I do not place a high
hope in this count, for there is simply no major economy or political
factor that can propel such move for the time being. However, if STI
can trade above 3300 by end of March 2007, such scenario may happen!!
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