 |
N.B. Above Chart is abstracted from
NextView Program
Last week we said that, "While the week before last was a bad
week for US stock market, with Dow Jones dropped a further 4% for the week.
Surprisingly the technical picture did not indicate that a fierce sell down
will follow suit! Indeed Dow Jones Industrial index is now in its cross
road. A further sell down will trigger a potential impulsive wave 3 that
will bring the index much lower than 11000. However, if it manages to hold
on at current level and starts to move up, it could still be in its wave c
of (b) bounced. So, the next two weeks are very important for confirmation
of wave structure, which in term will give us a clearer picture for the
intermediate market direction. A series of economic data such as Wednesday's
Retail Sales, Thursday's Jobless Claims and Friday's Consumer Sentiment will
probably provide a clue for the intermediate market direction." True enough,
Dow Jones did not follow through a big sell off, instead going through some
good rally last week. We also said that, "As for STI,
we could expect a weak opening on Monday with support at 2850 and 2750. The
index will continue its volatile movement until USA market provides a
clearer direction. As such, if you are intermediate term investor who would
like to bottom fish the market. You may consider buying now at bargain
hunting price, however, if STI breaks below 2746, you should mentally
prepare to cut loss." Again, we were right to the dot! STI did have a dip on
Monday, and then followed by a continue four days rally, so if you had
listened to my advise to buy, you could have making good profit. So, what
could happen next week? Will our market continue to rally?
While Dow did close on a positive week, it did not provide a convincing move
that could trigger a sustainable rally. Similarly, there were no evidences
from global markets that suggesting we are out of the wood now. The global
markets including USA, have merely told us that the Bulls and Bears are now
in its equilibrium and that we may see a clearer direction in the next one
to two weeks time. Perhaps after Monday holiday, the corporate results from
Wal-Mart Stores and Hewlett-Packard, plus the coming CPI economic data will
provide a clue to us on the intermediate market direction. Right now,
especially for Monday and Tuesday, we could only expect some range trading,
while waiting for a more definite direction in later part of the week. As for STI,
we could expect a slight weakness on Monday opening follow by some rally,
but should be stuck within the range of 2950- 3100 in the early part of the
week, before having a clearer direction by end of the week if Dow Jones does
provide the direction. As such, if you are intermediate term investor my
suggestion is to hold on your positions but do not add on too much, until a
clearer direction is confirmed. As for traders, you may have to sell on
rally and buy on dip during this range trading period. For STI, the first
resistance will be at 3100 follow by 3168. Support are at 2950 follow by
2850.
The following are the support and
resistance to watch for Dow Jones, Hang Seng and Nikkei next week.
Dow Jones Hang Seng
Nikkei
Resistance 12800
25100 13900
Support 12000
22500 12900
As for STI the resistances and supports
are as follow:
Resistance: 3050, 3100, 3168,
3200, 3250
Support:
2950, 2930, 2850, 2746
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 Home builders' index, Wednesday's
Consumer price index and Housing start.
-
Earning reports from Wal-Marts, Hwelett-Packard and some European Banks.
The following are two
possible wave counts on STI as at to-date:
- Preferred Count (60% 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 had then entered
into an impulsive wave ((3)) that ended at 3906. We are now in the
development of wave ((4)), of which we expect it to be a big triangle
formation that take about one to two years to complete. The recent sell
down is the first leg of wave ((4)), which will take a form of a-b-c and
reaches the potential target of 2770, as the wave (a) of ((4)). The
index will then continue to develop the (a)-(b)-(c)-(d)-(e) triangle
formation.
- Alternate Count (40% probability)--
bearish count
My alternate 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 had then entered
into an impulsive wave ((3)) that ended at 2666 in May 2006. The index had
then entered into wave ((5)) that ended on 3906 in October'07. We are
now in the downtrend bear market, which will last for a few years!
Although this count remains as the least chance as compare to my
preferred count. If the index breaks below 2776 convincingly on very
high volume, the odd on bear market will significantly increase.
previous | next |