 (Updated 08/08/99)  N.B. Above Chart is abstracted from Metastock Program Last week, we said "STI may open weak but should trade higher toward 2200 by the end of the week. The month of August should be a month of rally for Singapore stock market, and expect STI to test a new high by the end of the month." The market did come off in the early part of the week, but failed to make any rally towards the end of the week. It had certainly cought us off guard, for we did not expect the correction to be so deep. But then, like we said in last week commentary, we were entering into the wave (5), which is the most unpredictable wave in the entire up-move. It requires strong gut feeling, patience and wisdom to win the battle. As such, investors who are prudent in nature or are not willing to take high risk, are advisable to stay sideline for this last part of the up-move. So what will happen next week? Some analysts have been saying that the bull market is now over and that we are now entering into a new bear phase. On the other hand, some have been saying that this is just a mere pull back in the up-move and that we could still see 2500 by end of the year. Two extreme views are now surfaced in the market, to believe in one view but then turn out to be the other, could be a disaster to many investors. This is indeed a typical wave (5) phenomena, with full of pretenders and false moves to trap investors, which is very frustrating. One view is that, SIT will probably drift a bit lower next week towards 1999 to cover the gap before an impulsive up-move occur, to bring STI into new high by end August. The other view see the market continue to move down towards 1936 low and will eventually hit a bottom at 1850 to complete wave (4). We tend to think that the former scenerio is more likely and to achieve this count, STI must close above 2100 by this Friday and preferably above 2162 to trigered the impulsive wave 3 of wave (5). Since Sesdeq was the leader in reaching the short term bottom three weeks ago (a week before STI reaching its bottom at 1936), we tend to think that if we are going to see another upsurge in the market, Sesdeq would probably be the leading index in this up-move and we should monitor it closely to find out the clue. As such, a break of 160 on Sesdeq index continue to be the key for the return of our bull run. On the other hand, if STI fail to stay above 2000 by this Friday, a disaster may be about to start soon! Technically, STI has completed its wave (4) and is now entering into wave (5). Wave (5) is the most unpredictable wave in the entire up-move, as such many false moves and bull trap are expected. The target for this wave is some how academic, for it could reach a new high but can also be a wave (5) failure. The only practical way is to watch its development carefully and do not over commit in the trades. It seems that the preferred count in our "Long Term Perspective" site remains to be the most likely case that is going to happen.
Events To Watch For The Coming Weeks/Month
|