 (Updated 07/11/99)  N.B. Above Chart is abstracted from Metastock Program Once again, the performance of STI last week was close to our expectation. We said, "Expect STI to move up and test its major resistance at 2100 early next week, but will probably face strong selling pressure and retreat back towards 2030-50 by end of the week." STI did move up accordingly and tested a high of 2126 before profit taking set in. Although the correction last Friday was rather shallow and was on intraday basis (which gave us some surprises), it merely indicated to us that the underlying market was pretty strong and that a strong rally may be just around the corner! We had also seen Hang Seng broke through its critical support at 13000 and Nikkei at 18100 last week, these were another evidences that a regional rally may be in the card. Another encouraging sign came from Dow Jones. Although Dow did not surpass its critical resistance at 10820, it did manage to stay above its intermediate support at 10649 over the last two sessions. These had suggested to us that the low of 9976 on October 18th, may be a major bottom for the timebeing. With a release of reasonable unemployment figure last Friday, the fear for US rate hike had certainly subsided for a while, and most likely then not, even if there is a rate hike, the market may take it as the last action from the Fed for the year and show up a release rally after the announcement. To sum up, last week's actions in regional markets as well as Dow Jones, had certainly provided us a much encouraging picture and suggested that a new bull run may be coming soon! So, when can we see STI break new high? While we were encourage by the good performance on regional markets last week, we think this rally may be a short one, that last for about one month before the Y2K fear set in to spoil the party. Despite of a short rally, we believe our this year target of 2350 for STI is still possible and may be achieved by end November. As for next Monday, the law suit on Microsoft may have a negative impact for Dow Jones, but will probably have little effect to our market. Watch out for the following critical resistance for Dow Jones, Nikkei and Hang Seng, at 10850, 18630 and 13800 respectively. If these levels break, we will probably see a global markets rally for November. As for STI, it may have a slight influence by Monday's Dow Jones performance when Singapore market opens on Tuesday, but then the good show up by Indonesia's President over the week end should be able to neutralize any negative factors from US, and cheer the market up for the week. If STI can manage to stay above 2169 by next Friday on high volume, then we can safely say that the fifth wave rally has started and we will see 2350 soon! 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 three possible medium term scenarios. One is that we have just completed a triangle wave (4) correction mode, and that wave (5) is about to begin. Second, we have just completed wave 2 of wave (5) and that an impulsive wave 3 of wave (5) is about to start. Third, we are still in wave c of wave (4), which eventually will bring us down towards 1800 before completing the correction. Judging from the performance last week, it is increasing likely that we have just completed a complex triangle wave (4) and that wave (5) is about to start. 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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