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Weekly Preview (Updated 7/2/99)
N.B. Above Chart is abstracted from Metastock Program

Last week did provide some surprise to us. Instead of having some technical rebound, STI was continue dragged down by the plunge in regional stock markets (especially Hang Seng Index) and the weakness in Dow Jones and US Treasury bond. However, if you did follow my advise on 17/1/99 to sell your stocks holding, you will probably in good shape by now. When I called a "sell" on 17/1/99, to my surprise most of the analysts were still very bullish at that time, and kept on saying that the uptrend was still intact and that STI will reach 1,700 by the 1st quarter of this year. But now, many analysts have changed their views and started calling for a big correction, ranging from 1,200 to below 1,000. Even every single man in the street notices these changes and turns bearish. Is this a sign telling us that a short term bottom may be reaching soon and that a technical rebound is imminent? I think the big plunge in Japan's JGB and US's Treasury bond may be over reacted and that a rebound in these markets should be very soon. While Hang Seng had been sold down sharply over the past few weeks, it is extremely oversold now and should be reaching a short term bottom soon. As such, I would not be surprised if next week STI reverts and move up on a technical rebound (or shall we call it a mini Chinese New Year bull run?). I think STI should be trading in a range between 1,338 and 1,428 next week with some upside potential. However, any possible rally will be capped below 1,480 and that the bigger picture shall remain bearish. If you still hold some stocks, this may be the last chance for exit.

From the wave structure analysis, we have completed wave (A), (B) and (C) of the bigger Wave ((B)), and now entering into Wave ((C)) which will bring the index into 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.

Support 1338, 1320, 1270-1250, 1180, 1160-1140, 1080, 980, 880
Resistance 1390, 1428, 1480, 1538, 1580, 1600, 1635, 1700

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 and T-bond.
  4. Hang Seng Index movement.
  5. Japan JGB and its long term interest rate movement.
  6. The stability of Regional and Singapore currencies (especially Indonesia Ruppiah)
  7. Regional stock markets movement.
  8. Singapore 3 months Inter-bank rate.
    9.