(Updated 24/1/99)

N.B. Above Chart is abstracted from Metastock Program

Early last week, we did see STI continue to surge up and on Wednesday it did a high of 1565.14 before succumbed to profit taking on Thursday and Friday. Hope you did take my advise to reduce your portfolio by at least half the amount during the rally. Last week we had seen Dow Jones continued it correction throughout the week and looked increasingly likely that the mania bull may come to the end very soon. One market that make me very worry last week, was Hongkong Stock Market and its Hang Seng Index. The Index plunged through its important support last Friday and looks increasingly venerable. Hang Seng needs to pull back up on this coming Monday or later by Tuesday to cancel its negative picture, otherwise it would probably be the first market to lead the down turn of the whole Asia region! So, do monitor this index closely. Now, what will be the coming week for STI?

STI will continue its correction on early part of next week. Whether it will rebound on later part of the week, will be determined by the outcome of Dow Jones next week's performance. As for domestic factors, the Interest Rate play is basically over and that we are yet to see light coming from our non-oil export figure or the coming corporate results. I am afraid we may have seen the high of this four months rally, if not, it should be very near. Our target of 1,600-1,640 looks more and more difficult to achieve as time goes by. For the time being, I can only put a 50% probability that we can see this target before Chinese New Year. Suggest to sell whatever balance shares you have on any possible rally in the coming week.

From the wave structure analysis, we have completed the triangle Wave (B) consolidation, it is now going through the Wave (C) of ((B)). However, last week we may have seen the completion of Wave (C), with a failure wave 5 of (C) at 1565.14. A clearer picture can be seen by next week which will then help us to clarify our view. If STI breaks below 1,382, we may assume the end of this four months bear market rally and the continue of the Wave ((C)) bear market to a new low.

Alternate count, suggest that we have just completed Wave 5 of Wave (1). A completion of Wave (1) will follow a corrective Wave (2) which will bring the index down towards 1,030 or lower.

Events To Watch For The Coming Weeks/Months

1. Latin America currencies and stocks movement
2. The impeachment development on US President Bill Clinton..
3. The movement of US stock market.
4. Hang Seng Index movement (Are hedge funds back to market now?).
5. The stability of Regional and Singapore currencies (especially Indonesia Ruppiah)
6. Regional stock markets movement.
7. Singapore 3 months Inter-bank rate.