 (Updated 03/10/99)  N.B. Above Chart is abstracted from Metastock Program It was another boring week for Singapore stock market with STI stuck in between a tight trading range. We had mentioned in our last week commentary that, "The market will continue to move lower in the early part of next week, but may experience some technical rebound towards middle or end next week. STI should hold its support at 1936 and experience a bound towards 2040 by end of the week." Indeed, we were right and that STI did manage to have a rebound towards 2057 last Friday and closed at 2051, 11 points above our target of 2040, which considered not too bad under such uncertain market. Let us look at what had happened in Asia region stock markets last week. While Nikkei managed to bounce back and stayed above 17,000 (it could be due to Japan's year end window dressing), Hang Seng was stuck below critical resistance at 13,000 on tight trading range. The only market that showed very negative sign was the Korea market, where its index broke the main support at 850 and went lower. As for Dow Jones, it did try to rally a few times but failed to move above 10,450 critical level. Hence, despite the movements, last week activities were rather mix and did not give us any clue as to where the markets are heading to, and left us no choice but to wait patiently for the markets to tell us their stories. Nevertheless, we believe this month is very important for the stock markets, not only for US market but the whole world stock markets too. However, under such critical juncture, we are still hand tight and unable to forecast the exact future direction for the market. It is because we are right at the pivot point that may determine the medium to long term market perspective and that it needs some time for the market to take its course. But then, do we have some clues for next week? We believe STI will remain in a trading range between 1980-2080 for the first half of the week and may try to break up or down after the October 5 FOMC meeting. The markets worldwide had built up an expectation that Fed will not hike rate this time due to the uncertainty in the market and that we are approaching the Y2K which is too sensitive for Fed to make any unpredictable moves. As such, if Fed did not hike rate, a rally may prove to be brief and short. On the other hand, if Fed did hike rate, we may see a sharp correction in the US market and that other stock markets may follow suit. As such, we would rather stay sideline at this critical juncture while waiting for a clearer direction. If STI breaks above 2160 with high volume, it may kick up the wave (5) that we are expecting for a long time. On the other hand, if STI breaks below 1970, we will have a high chance of heading towards 1860, with a possible of going towards 1665. The movement of Gold and Crude Oil will be another factors to watch for the coming week. As for Sesdeq, it must move up next week and close higher than this week. Failing which, a close below 134 will spark a sell down towards 120 or lower. Technically, we are in a critical juncture for the medium to long term. As we are unable to identify wave 5, the market had left us in two possible long term scenarios. One is that we are still in wave (4) correction mode (or just about to complete wave 2 of wave (5), please refer to the above chart). On the other hand, so long as we are unable to identify wave 5, the up-move since September 1998 remains as a three wave move, which could turn out to be a corrective rally, hence a bigger wave C will bring STI into a new low below 800! (please refer to our alternate B scenario in our Long Term Perspective site). We need to be patience for the market to tell us its possible direction.
Events To Watch For The Coming Weeks/Month
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