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(Updated 22/08/99)

N.B. Above Chart is abstracted from Metastock Program

Last week, we said "It seems to us that the August rally remain possible thought the magnitude of rally may not be as big as what we were expected early. They are a few factors need to monitor closely to see if the rally does occur. First, STI should turn up this coming Monday for it has just hit the important support line L (this is highly possible considering that Dow Jones did a huge rally last Friday and that OUB corporate result had come out to be better than expectation.) Second, for STI to remain in up-trend, it must close above 2030 and preferable above 2080 to make the market favorable. Third, Sesdeq must trade above 138 and preferable close above 140 by Friday to ensure the bull remains intact. If all these conditions fulfill next week, we may see a rally in Singapore market by end of August towards early September." We were very proud to see that all the three conditions stated by us last week, were all fulfilled. Could this be just a lucky guess or could it be ...? Anyway, we are very pleased to see STI close above 2080 at 2087 and Sesdeq at 155.47. Remember, about two weeks ago, we had mentioned that since Sesdeq was the one who hit the bottom first prior to STI index, we believed that Sesdeq could be the leading index for the up coming rally, and indeed it proved to be true again. Sesdeq is now clearly make a break up and should be heading towards 182 in a short time, while STI is still stuck in the triangle formation prior to a possible up-move.

So what should we expect next week? Can the rally continue and for how long? Judging from the last Friday's closing, we are very positive for Singapore stock market and indeed we are just about to experience a bull run that will probably last for two to three months. Having say that, we do expect some pull back when STI index hit 2100-2110, but the pull back should be quite shallow and that such pull back will give a good opportunity for late comer to join in this final rally.
Like I have been saying in the past commentaries, we are entering into the fifth wave now, and the character of fifth wave is usually very unpredictable. As such, the rally will not go as smooth as what we had experienced in the third wave (between Mar-Jul'99) and I can assure you that there will have plenty of rough ride along the way. If you are not careful you may end up losing money eventhough you are on the right side. So, do trade carefully and do not over commit yourself. If STI manage to break above 2100 this week, it would probably heading towards 2350-2400 level. The end August-early September rally is certainly on.

Technically, STI has either completed its wave (4) and is now entering into wave (5), or remained in wave (4). If our wave count is correct and that the bull market remain intact, then we could either forming wave d of wave (4) or just about to enter the impulsive wave 3 of wave (5), whichever count it is, the end result is up. The line L shall remain our last defend for the bull market.

It seems that the preferred count in our "Long Term Perspective" site remains to be the most likely case that is going to happen.


Support		 2080, 2055, 2030, 2000, 1936, 1820-1850, 1800, 1700
Resistance 2100-2110, 2175, 2200, 2214, 2250, 2300, 2500

Events To Watch For The Coming Weeks/Month

  1. The 24th August FOMC meeting and its comments.
  2. The conflict between China and Taiwan.
  3. The movement of US stock market and T-bond.
  4. The development of Indonesia election.
  5. The release of Corporate results.
  6. The movement of Dollar vs Yen.
  7. The stability of Regional and Singapore currencies (especially Indonesia Ruppiah).
  8. Regional stock markets movement.
  9. Singapore 3 months Inter-bank rate.
    10.