 (Updated 18/4/99)  N.B. Above Chart is abstracted from Metastock Program Last week's STI performance was indeed breath taking. By Friday, we had already gone through a total of 14 days upmove with only one day retracement of 4 points. And most important, the past week upmove were coupled with very strong volume and breadth. The strong resistance at 1,728 had also been broken last Friday without much difficulty. All these scenarios had forced us to rethink the current market view. Is this the moment we should turn in our alternate count (2) (please refer to the Long Term Perspective site) as our preferred count instead? Although we should not immediately rule out the current preferred count and turn to our alternate count (2), the regional indices such as Nikkei, Hang Send and Korea indices had indicated that a change of scenarios may be right. So for the time being, let assume our prefer count as per the chart above and that our last week's count become the alternate count (please refer to our up-date in Long Term Perspective site). Market is now highly overbought on daily basis and will succumb to profit taking very soon. Expect STI to test the resistance at 1780-1800 before a correction emerge. This will probably happen in the middle of next week and coincide with the correction in Dow Jones. However, any correction will be well supported at 1,650 level and will eventually push STI index towards 1,850-1,900 level. Only a break below 1,580 will force us to re-examine our current view. Investors should be highly cautious when doing the trading at current stage, for the market will be very volatile and couple with a rotating play on different stocks. A strategy of sell on rally and buy on dip is still very much preferred. I had mentioned in my "Long Term Perspective" site that "unless this rally carries over 1700 with strong volume and momentum, I believe we will see another leg down to test 800 and below." The current upmove above 1700 was indeed coupled with strong volume and momentum. Therefore we have to switch our view into alternate count (2) as per the chart above. If this view is sustainable, we are indeed at the 3 of the wave (3), which will be very powerful and should easily push above 1,950. We will have to see the development next week to double confirm the count. Meanwhile, it does not mean that our previous preferred count should be totally abandoned. But we have to switch it into our alternate count instead, for the probability is now getting lower. Only a break below 1,480 in the coming one month will force us to re-examine our view again.
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