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N.B. Above Chart is abstracted from
NextView Program
Market has finally decided to trade lower after a long waiting
period. Is this going to be a big one or just a few days correction?
Traditionally the month of August and September are not very kind to the
market. By coincident, our Chinese 7th month is also starting soon. These
cycle events could have some impact to the market. We believe market will be
very tricky for the month of August and September, while the main trend is
down, the market may zig saw up and down, which is not good for contra
trading. In our opinion, the USA market
had started its correction since last Thursday and could carry on for about
a month. How low the correction can be and in what form we do not
have a clue. However, judging from the bullishness in current market
condition, I would not be surprised to see a sharp drop to shack away the
weak Bulls before the market resumes its upward surge. For next week, the
focus will be on economic data, we have on Tuesday PPI and housing starts,
Thursday Jobless claims and the index of Leading Economic Indicators and
Friday Existing home sales. Traders will be watching for sign of economic
weakness to find excuse for selling down. With corporate results
announcement near the end and time cycle favoring down move, it would be a
surprised if a strong rally emerge. We believe DJIA will continue drifting
lower towards 9000 or may even touch on support at 8800 in the coming weeks.
If you have long positions you may want to get out now. Alternately if you
do not have position you may want to consider shorting the market. As for STI, expect it to
continue its correction towards 2480 level, and may even go as low as 2424. For Intermediate investors, we
would expect you to have gotten out your long positions two weeks ago. And
may even started holding short position. You may continue holding your short
position for the time being. As for short term traders,
perhaps it is time to do more short trades and take advantage on the
downward momentum.
Dow Jones Hang Seng
Nikkei
Resistance 9435
21196 10629
Support 9133
19787 10252
As for STI the resistances and supports
are as follow:
Resistance: 2680, 2700, 2750
Support:
2604, 2580, 2500, 2465, 2424, 2371
Events To watch For The
Coming Week:
- The movement in Dow Jones
Industry and NASDAQ..
- The
movement in currencies, bond, oil and commodities price.
-
The corporate result announcements.
-
The economic data include Tuesday PPI and housing starts, Thursday
Jobless claims and the index of Leading Economic Indicators and Friday
Existing home sales.
The following are two
possible wave counts on STI as at to-date:
- Preferred Count (60% probability)-- bullish count
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