 (Updated: 21/11/99)  N.B. Above Chart is abstracted from Metastock Program Last week, we said that, "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." Once again we were right to the dot! STI did rally in the beginning of the week and tested a high of 2276, before profit taking pushed it down and closed at 2221. It was even more amazing for Sesdaq, for it hit a high of 160.89 on Wednesday (just 0.89 points above our target) and started a correction in exactly the way we expected. Lastly, the rally last week was indeed a broad base and with increase retail participants. We were very glad to see our past few weeks predictions to be right, not only in term of direction but the exact index figure. If you have followed our advise in the past few weeks, you should be in a very good shape by now. Not to mention, most of our clients who had received our stock recommendation, would have sit on good profit by now! So, what could we expect next week? How long can the 5th wave last? It is quite amazing to see how crowd psychology affect the stock market. In October, we had tons of worries in US market. Starting with the anniversary of Dow Jones '87 Crash, the Y2K syndrome, the Fed's tightening on interest rate, the spike in Gold price etc .... At that time, every investors, analysts and so call CNBC bulls were so bearish that, it seemed the end of the world was right at the corner. These were the classic crowd behavior that converted into a melt up of NASDAQ and Dow Jones in November, isn't it amazing! While there is nothing change at this moment as compare to in October (like the Y2K and the Fed), one thing has change, i.e. every one is so bullish now! So, what to worry about Y2K, isn't it already built into the market price, and that every body is preparing for it? Well, yes and no ...... and honestly I am not so sure! But then, why worry now, we still have another 40 days to go! Let's discuss it again in December. As at last Friday closing, most of the regional stock markets had broken into a new short term high, and indeed was a bullish sign for the region. While a break of a new high, usually will have a knee jerk pull back on its first attempt, it should quickly resume its bull mode if the rally is to continue. Expect STI to try and rally on Monday (due to a better than expected Trade data that released yesterday), but will meet with increase selling pressure from contra players on the due contracts. It will then correct towards 2150-2180 level, before finding a short term bottom and starting to move up again by end of the week. We remain confident that STI can reach 2350 by end of the year and most likely then not, it will coincide with the announcement of the re-weighting of Banks and SIA by Morgan Stanley on the MSCI index this month. Watch out for the following resistance for Dow Jones, Hang Seng and Nikkei, at 11150, 15300 and 19300. Any turn from these resistance, may signal a correction in our market. Technically, it is increasing likely that we have just kicked start the long awaited 5th wave. If we are right, the market has just completed its 3rd of the 1st of the wave (5). In this case, a pull back towards 2150-2180 is quite likely, before it resumes the rally again. With STI closed at 2221 last Friday, the count is now favour more for the upside, 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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