 (Updated 12/09/99)  N.B. Above Chart is abstracted from Metastock Program Last week, we were expecting an impulsive wave in STI to kick off after the outstanding performance of Dow Jones in previous Friday. Unfortunately such events did not appear, primarily due to the crisis in East Timor and that the uncertainty had seriously undermined the investors mood in south east Asia region. However, we did say that "For next week the critical level to watch for the bulls, is at the resistance level of 2160. If STI manage to break this level convincingly on high volume, we may be heading for a new high very soon." The attempt on 2160 was only happened last Friday, with STI traded to a high of 2157 before retreated in the afternoon and closed at 2133. This again had brought the index back to the triangle trading range, with not much clues given to us on how the market is going to perform next week. However, judging from last week's STI movement and its volume, it seemed that the impulsive wave that we were expecting did not materialize. This had forced us to re-exam our wave counts and suggested that we may have to alter a bit on our wave counts to reflect what the market was telling us. The latest wave count is shown above ( but we will keep the previous wave count as an alternate count). So what will happen next week? Can the rally continue since we are still facing so much uncertainty? We believe the market will continue to rally next week. In fact we had a strong Hang Seng index break up last Thursday (up 498 points) which may lead the whole Asia region markets for a rally in the coming weeks. As for Dow Jones, last Friday's PPI figure did not create a negative impact to the market, hence it may suggest that a rally to a new high after next Tuesday's CPI figure is highly possible. Latest news from Indonesia, suggests that Indonesia government is now willing to ask for UN peacekeeping force to station in East Timor, which is a positive factor to the market. The successful meeting between President Jiang and Clinton at APEC meeting this weekend will also cheer for the market. With all this in mind, we think STI will move up next week and break the critical resistance at 2160. If the break does couple with high volume then we may be in the impulsive mode that will carry STI to a new high by end of the week. However, if the break at 2160 is not couple with good volume than a pull back by end of the week may happen prior to a resume of rally towards new high in the coming weeks. Whichever case it is, investors should seriously consider buying stocks now. Last week we said, "For individual sectors, we think Finance and Electronic industries will outperform the others and may be the leading indicators to watch for the bulls." We were right and indeed Finance index had created a new high last Friday. We continue to believe Finance and Electronic industries will lead the whole market for the next bull run and that some Internet related stocks may be the star performance in the coming weeks. As for Sesdeq, it needs to break the first hurdle at 153 and then 160 before seeing a strong rally towards 182 and above. Technically, STI has just completed its wave e of wave (4) and is now entering into wave (5) OR has just completed its wave 2 of wave (5) (the alternate count). Although the wave count appears to be a bit uncertain at current level, we can only confirm whether we are in the wave 1 of wave (5) or wave 3 of wave (5) after next week's market movement. Nevertheless, all wave counts pointed to a rally for the coming week! The only difference is the magnitude of rally which in this case need to be confirmed with the volume. As such, investors should take this opportunity to participate in the coming rally. 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.
Events To Watch For The Coming Weeks/Month
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