 |
N.B. Above Chart is abstracted from
NextView Program
Happy New Year 2008 to all of you! While
we would like to start to new year with a bang! Unfortunately the market is
rather uncertain and many signs have indicated to us that we will be heading
to a very volatile year! With the worst than expected job data last Friday,
we expect more storm to come this week, as investors digest dismal news on
employment and oil at $100 a barrel, while trying to assess whether the
Federal Reserve can cut interest rates more forcefully in an attempt to
prevent the economy from sliding into recession. Indeed, technically we are
very near to the FINAL BATTLE between the BULLS and the BEARS! While Fed may
be very much in favor of cutting rate to rescue the falling economy, the sky
rocket oil price may put pressure for Fed to do so. Perhaps the minutes from
last Fed meeting to be released on Wednesday may give a first clue as to
what Fed is thinking ahead. Next week will not see many economic numbers to
help investors decision. On Tuesday, pending home sales and consumer credit
data for November will be released. Thursday will see November wholesale
trade numbers and weekly jobless claims, followed by import/ export prices
on Friday. All these data may give some clue on the state of economy, but
are not main data that investors are monitoring. Perhaps the kick-off on
fourth-quarter earnings season will give a better clue, we are yet to see
the impact. While the fourth-quarter earnings may play a role in the market
direction, we believe the ultimate will be on Fed, as to whether there will
be a 50 basis point cut at or before its next meeting by end January!
Technically, we are indeed very worry. For global indices are now all in
their respective cross road. For example a break down on Dow Jones
Industrial at 12500, STI at 3300, Hang Seng at 26000 and Nikkei at 14000
will invite big trouble to the market, which will mean a possible beginning
of Bear Market! Plus the fact that the only cylinder that is power up over
the last two months (I mean the NASDAQ index) has begun to show sign of
weakening, we are indeed at a very dangerous position now. We strongly
believe the next two to three weeks will be very important to the world
economy. The battle between the BULLS and the BEARS will come to an end and
that a winner may be decided! So, folks stay tight and enjoy the show!
Personally, we believe there will be some rebound next week but will not be
sustainable unless Fed does something. Technically most of the global indexes are
now getting weaker and need extra booster to stay alive! In fact, Dow Jones Transport index
has already turned bearish, which may give us an advance hint on the market. As for STI,
the recent high of 3482 will become a strong resistance and that it is
likely to test a strong support at 3300 this week. We could expect some
rebound once the index hits 3300, but whether it will become a bottom is yet
to be seen. The
development next two to three weeks 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 3482 follow by 3600. 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 13000
28350 15650
Support 12725
26090 14000
As for STI the resistances and supports
are as follow:
Resistance: 3462, 3550, 3622, 3650, 3700
Support:
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 Tuesday's Pending home sales and consumer credit
data, Thursday's November wholesale trade numbers and weekly jobless
claims, Friday's import/ export prices.
-
Wednesday's release of minutes from the Fed last meeting and the
kick-off on fourth quarter earnings.
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!!
previous | next |