 (Updated 10/10/99)  N.B. Above Chart is abstracted from Metastock Program Last week, we said that "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." Indeed STI did some rally on Monday and Tuesday (before FOMC meeting) and closed at 2065, just within our expected range. Subsequently, the market managed to break up and tested the resistance at 2135 before corrected and closed at 2114 on Friday. Although we are still in a trading range that build up over the past three months, the up-move has certainly provided us with some hope that the bull market may return soon. As for the regional markets, Nikkei broke through 18,000 level and remained strong, while Hang Seng was caught in a trading range but managed to stay above psychological level of 13,000. As for Dow Jones, it managed to over come the fear of interest rate hike and bounced back to stay above main support at 10450. As such, looking back from what had happened last week over the major stock markets, the performances were quite promising. As for Sesdaq, we had said that "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." Sesdaq did close at 141 last Friday, way above our critical support of 134. As such the target of 120 or lower, is now cancelled. So what will happen next week? Is the bull now firmly in place again? While we believe the outlook for the market is now much brighter as compare to one week ago, we are not sure if the market is completely out of the wood now. However, if we are forced to make a commitment, we will say that we are now 60% bullish and reserve a 40% just in case the bear win the battle. We are now in a sensitive month of October again, which many people could not forget the October'87 crash and the October'29 Great Depression. But then, if we take away these two disaster events, statistic has shown that most of the bull run were actually started in October after the 3rd quarter (August-September) seasonal correction. As such, it is very clear that October is a month that the bull and the bear will fight for their life and determine the next few months movement in the market. In USA, we had a mix data of Unemployment figures last Friday. We will also have Mr Greenspan given speeches on the coming Monday, Wednesday and Thursday, prior to the Producer Price Index to be released on Friday. As such, we will expect a volatile movement in Dow Jones for the coming week. As for the region, Indonesia is also packed with a string of events and meeting. Started on October 11, Golkar will meet to decide whether to retain Habibie as its presidential candidate. The IMF wants Indonesia Government to reveal by October 10, the entire PricewaterhouseCooper report on the Bank Bali scandal. On October 15, Habibie will make his report to the MPR and may risk to be turned down by the MPR that resulting in disqualify for the next presidential election. And finally, on October 20 the election of Indonesia president. All these events will have great impact to the Asian region, especially Singapore. As such, the next two weeks will be very important to our market. If all events turn out to be market friendly then STI should break above 2160 resistance and move towards our target of 2350 by end of the year. However, if any events turn out to be sour, then we may see STI continue its correction towards 1850 or lower. Nevertheless, we expect STI to move higher in the beginning of the week, with a possible of testing the resistance at 2150-2165 level. But it will pull back in the second half of the week towards 2080. The actual big move will probably come after next week. And for Singapore market, if the bull does return, it will be led by the Finance and Manufacturing sectors. 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). As such, 2169 is a critical resistance to watch. If STI can break above this level, the bearish count is automatically cancel. 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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