 (Updated 14/11/99)  N.B. Above Chart is abstracted from Metastock Program Last week was certainly an exciting week for the bull. Although we only had a four days short trading week, the breadth and volume were very encouraging. We were once again right to the dot to say that, "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!" While STI did open with a bit of uncertainty last Tuesday, it eventually moved up on good volume and breadth. The participants were not only fund managers, stockiest and syndicates, but retailers did come in towards the later part of the week. The close of 2186 last Friday (at the high of the week) has indicated that there should be more gains coming up this week and that the long awaited 5th wave rally has just begun! So what can we expect next week. While we are encourage by the good performance last week, we believe the 5th wave is a tricky one and frequently trap investors in an unexpected way, so investors should trade cautiously even thought the market is bullish now. Do not expect a straight line kind of movement towards new high but a rather tricky zig-zag movement. Last Friday's Dow Jones close with +170 points should give a good support for STI at the beginning of the week. There are a few important issues need to watch next week. First, the october 16th FOMC meeting. Second, the outcome on negotiation for China to enter into WTO. Third, the release of Singapore economic data this Thursday and last but not least the development of Aceh situation in Indonesia. It seems to me that Dow Jones may be undergoing a buy on roumour and sell on news situation, and that most of the good news and expectations on Fed meeting had been build in over the past few weeks. As such, whether Fed hikes the rate or not is not so important now, and most likely than not, profit taking will set in after the meeting. It will be especially so if Fed is to maintain its tightening bias after the meeting. In addition, good news are expected to be announced on China enter into WTO early next week and an expected good showing for Singapore economic data on Thursday. These pointed to a good start for STI in the early part of the week but how long can it last? Expect STI to move up in the early part of the week, with a possible of testing the resistance between 2210-2250. But then it should face strong selling pressure at that region and retreat by end of the week. As for Sesdaq, it will probably follow closely with STI towards resistance at 156-160 level, before a correction emerge. The rally should be broad base and with increase retail participants. Watch out for the following resistance level on US and regional indices. Dow Jones 10840, S&P Cash 1420, Nikkei 18660 and Hang Seng 14600. If any of these markets fail to cross the above resistance and start to move down, it may be an indication that a correction is about to come. Technically, it is increasing likely that we have just kicked start the long awaited 5th wave. If we are right, the market is probably at the 3rd of the 1st of the wave (5). In this case, it is likely to encounter strong resistance between 2210-2250 and make a correction. We had mentioned in our last week commentary that, "2169 is a critical resistance to watch. If STI can break above this level, the bearish count is automatically cancel." With STI closed at 2186 last Friday, the count is now favour more for the upside by now, and that we are unlikely to see STI goes below 800 for many years to come.
Events To Watch For The Coming Weeks/Month
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