 (Updated 19/09/99)  N.B. Above Chart is abstracted from Metastock Program Last week, our concern and the re-draw of corrective wave (4) proof to be correct. The wave (4) consolidation was indeed much longer than what we initially thought of. Having say that, the market remains firmly on the bull trend and over the past three weeks had not even touched on the support line L. This has encouraged us to remain positive throughout this corrective phase without changing much of our standing. Although STI did not break above 2160 last week, it did provide us some clues as to what we can expect next week. The strong close last Friday couple with good volume had indeed cheered the market participants. So, what can we expect next week? Is the rally coming soon? We have mentioned in our last week's commentary that we need additional information from the market to see if we are in the beginning of wave (5) or the impulsive wave 3 of wave (5). The market did feed us some information and indicated to us what we could expect next week. We think the market is about to enter its impulsive wave 3 of wave (5). If this is true, it needs to satisfy two conditions next week. First, STI must break above 2160 convincingly with high volume. Second, Sesdeq index must break and stay above 160 by Friday. If all these conditions fulfill, we could expect STI to trade into new high very soon and in an impulsive manner. Having say that, if the rally could not sustain into next Tuesday, we may trap in the triangle consolidation phase again, with extended sideways correction. We believe the rally should continue and that the impulsive phase is in the making. With the announcement on new CPF investment regulation by BG. Lee, we think the biggest beneficiaries will be Sesdeq and penny stocks, since there will not have anymore comparison between trustee and non-trustee stocks. The sweetening offers on housing loans by banks will also give the market a boost. The move-in on UN peacekeeping force to East Timor will help to calm down the situation in Indonesia. The only main concern that we have is the G7 meeting over the week end and that if no concerted effort by G7 on US$/Yen, whether by words or actions, it will certainly have a negative impact to the markets. Having say that, US$/Yen will most likely going through a corrective rally next week to absorb the oversold scenario. With the non-oil export figure coming out on Monday and the improve regional situation, we think we have a good chance of breaking 2160 next week and a continue impulsive rally for the coming weeks. For individual sectors, Sesdeq counters, properties and finance will lead the market in term of priority. Technically, STI may have just completed its wave 2 of wave (5). Although the wave count has not been confirmed, the probability appears to favor this count. And if this proof to be right that we are about to enter the impulsive wave 3 of wave (5), then we should not miss this golden opportunity. 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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