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N.B. Above Chart is abstracted from
NextView Program
Last week we said that, "Well, we have a continue three weeks
of rally with each week closing at higher high. We also have a reversal bar
closing on monthly chart for the month of March, so long as DJIA close above
7063 on 31st March (which is very likely). These are strong indication that
an intermediate bottom has formed and that at least a technical rebound is
on its way, and it is still in a very early stage! I would not be surprised
if the rally can continue to move up till 8400 before a more meaningful pull
back occur. However, after three weeks of continue rally, where S&P had the
largest three weeks gain since 1938, the market is certainly ripped for some
form of pull back! For next week, there are a series of economic data, such
as Tuesday S&P/Case Shiller index of home prices, Chicago manufacturing and
consumer-confidence surveys for March. Wednesday Pending home sales and
Friday the all important March employment report. These will certainly have
great impact to the market, in particularly the Friday job data. In the mean
time, some early earning reports will kick in too, such as Thursday Research
In Motion, Micron Technology etc. Plus the G20 meeting over the weekend,
which will likely add some volatility in the market. We expect DJIA to move
up slightly in early part of the week, however a pull back correction will
start by mid to end of the week and is likely to bring the index down to
near 7600 level." Well, we did expect some form of correction last week.
Thought it had happened, the pull back was rather shallow and short period
of time. We also said that, "As for STI, it had met its 1780 resistance last
week and is likely to contain there before a correction emerge. I would
expect the index to start its correction by middle of the week and is likely
to test 1700- 1660 level before a strong rebound emerge." Again, we were
right to the dot! STI did correct to 1660 level, before bouncing back
strongly. So, after 4 weeks of rally, will the market goes for correction or
will the rally continue?
Although last Friday's Unemployment
data was the worst so far, market managed to recover by end of the day. This
had shown to us that there are some more upside in the coming week. Plus the
fact that next Friday will be a public holiday in USA, a pull back may be
postponed till the week after. With 1st quarter reporting season starting
next week and some important economic data coming next week, the market may
be volatile. For corporate earning reports, we have on Monday Immucor,
Tuesday Acoa, Thursday Chevron Corp. As for economic data, we have on
Thursday Jobless claims, Friday February U.S. trade balance. Plus Wednesday
the Federal Reserve will release the minutes of the March FOMC meeting. We
expect DJIA to continue rally in early part of the week and could be
challenging the 8250- 8400 level, before a correction emerge by middle of
the week. As for STI it is likely to move up in the early part of the week
to 1850- 1880 level before correction emerge by middle of the week. In
Singapore, the blue chips rally may be pausing soon and give way to second
liners and S chips rally in the coming week. As
such, for mid term
customers who had followed my email advise to purchase on 3rd March, you may want to
take this opportunity to sell some blue chips and add on some more position in
the second liner and S chips to take the advantage of the second liner
rally. As for
those who do not have any position, a pull back in blue chips in the coming
two weeks will represent a golden
opportunity to jump into the bandwagon! As for shot term investor, you may
slowly start your contra trading, as rotating play will be the key in the
coming weeks.
The following are the support and
resistance to watch for Dow Jones, Hang Seng and Nikkei next week.
Dow Jones Hang Seng
Nikkei
Resistance 8400
15760 8900
Support 7900
13600 8700
As for STI the resistances and supports
are as follow:
Resistance: 1780, 1800, 1830, 1850, 1900
Support:
1717, 1690, 1660, 1630, 1570, 1550
Events To watch For The
Coming Week:
- The movement in Dow Jones
Industry and NASDAQ..
- The
movement in currencies, oil and commodities price.
-
The early corporate earning results on Monday Immucor, Tuesday Acoa,
Thursday Chevron Corp.
-
The economic data such as Thursday Jobless claims, Friday February U.S.
trade balance. Plus Wednesday the Federal Reserve will release the
minutes of the March FOMC meeting.
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.
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