 (Updated: 19/12/99)  N.B. Above Chart is abstracted from Metastock Program Like we said last week, the activities and Friday's rally continued to be centered on blue chips and that most of the second liners remained on sideline. Our market has certainly picked up the habit of US market and behave more like Dow Jones and Nasdaq now. Are we going to continue like this? I think so, so long as the momentum chasing game continues to play in US stock market. Last week we said that, "We expect STI to continue its rally in the early part of the week, and may create an intermediate top at 2400-2450 around middle of the week before a correction kicks in. As for Sesdaq, it will meet a resistance at 153-158 level and start to drift lower by middle to end of the week. The rally in Wall Street and our market will probably taper off some time next week and be replaced by a volatile side way trading range." STI did move up to 2400 on Monday before succumbing to profit taking and correcting for three days towards 2295. However, the rally on Friday had certainly caught us by surprise. As for Sesdaq, we were rather disappointed for it could only manage to rally towards 148 before correction kicked in. This has indicated to us that the second liners remain weak and would probably continue its correction for some time before any possible up-surge next year. So, will there be any Christmas presents or Millenium gifts for Singapore investors in the coming week? Or, shall we close shop earlier and prepare ourselves for the Y2K bugs? The global markets, lead by the melt-up in Wall Street, have completely written off the possible disaster that may strike by Y2K. It is an amazing thing that can happen in our financial market. When two years ago, every one is so worry about Y2K and that many analysts had actually predicted an end of the world kind of disaster that will happen to us, but then just about two weeks before the day, no one seems to care or rather, every one is so confident that nothing will happen when the year flip to 2000. What have actually happened over the past two years that make every one so confident? Not much. Are we well prepare for the Y2K? Not sure, but one thing for sure, many under develop nations are not well equipped for that. But why are we so confident? Well, perhaps it is due to the booming US stock market, or may be because the markets have been flooded with liquidity by the Fed and other central banks to prevent any panic in general public. Can we trust this illusion? Do you have the experience in Y2K? Does any body have an experience in Y2K? The answers are, no, no and no. So, we would suggest you to be cautious then to be sorry. Remember, when every one is confident, the opposite is always happen. Get prepare, just in case there is some unforeseeable things that may happen. So much for Y2K, now let us focus back to our stock market. Expect STI to continue its technical rebound in the early part of next week. However, any up-move will be capped between 2400-2450 and a correction shall continue in the later part of the week. The market will be more and more quite when approaching Christmas. STI will drift lower towards 2280 and may find a strong support around 2200 by year end. Only a break below 2150 will create a problem to the current bull run. As for Sesdaq, it will continue its side way correction, with support around 130-133 and resistance at 144.5. A break on either side (probably early next year), will determine the intermediate direction for the second liners. There are not much news and events that are interested to watch next week, except the Tuesday Fed meeting (expect to be a non-event, for Fed is unlikely to make any move just a week before Y2K) and the listing on the conversion of 27 US$ stocks into S$ stocks. The following are resistance and support to watch for Dow Jones, Hang Seng and Nikkei next week:
Any break-out on these levels, will certainly affect our STI movement. Technically, it is increasing likely that we have kicked start the long awaited 5th wave. If we are right, the market has just completed the 5th of the 1st of the wave (5). In this case, we may see a short term top at 2400-2450 level. Alternatively, we may have just completed the 5th of wave (5). If this is so, we may be experiencing a big correction soon. We shall let the market tell us the story next week.
Events To Watch For The Coming Weeks/Month
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