(Updated: 09/01/2000)

N.B. Above Chart is abstracted from Metastock Program

What's a way to start the new Millenium! We had one day rocket shooting up and three days gravity free fall. This had indeed painted an interesting and adventure picture for the stock market in the year 2000. I think we could expect more and more such volatility in the coming months, and that, it will make year 2000 a memorable year for every investors!
Last week, if you had taken our advise you would probably escape the big massacre with little damage. We said in our last commentary, "STI will probably continue to move up in the early part of the week on Millenium celebration but will turn cautious in the later part of the week. A test of 2500-2540 is quite possible but should be cautious on its support at 2400. A break below 2400 will bring STI towards 2280." STI did move up on Monday with a slight over shoot towards 2582.90, which was slightly out of our expected 2540 target. However, the index began turning down on Tuesday, with a subsequent plunge on Wednesday and Thursday in response to Dow Jones and Nasdaq big drop. In fact, there were only two days (Monday and Tuesday) that allowed you to escape with little injured, failing which you would probably have to ride through the storm! So, what can we expect next week? Has the hurricane passed by our market?

Last Friday's upsurge in Dow Jones and Nasdaq (+269 and +155) had certainly caught us by surprise and left us wonder if the correction was over. Before we put up our thoughts, let us examine what had been happening in Dow Jones over last week. We had seen a switch of funds from tech shares into lagged blue chips (those that doing traditional business), utilities and some small cap stocks. This can be seen as a temporally parking slots for funds in the coming weeks. Because the components in Dow Jones do comprise many traditional big corporations, such a shift of focus in the market in effect benefit the index and allow it to continue floating in the air. However, we believe such an up move by traditional lagged blue chips will not last, for there simply not many exciting news to cook on these stocks. So, sooner rather than latter, profit taking shall emerge. Although, the big come back by Dow Jones and NASDAQ last Friday were rather impressive, we continue to believe the correction is not yet over. Not to mention, there are a string of heavy weight economic data, such as Retail Sales, Jobless Claims, PPI and CPI  of USA waiting to be released by end of this week. This will certainly turn investors into cautious mode and begin to worry on inflation again. Another negative issue to our market is from Indonesia. Apparently, there seem to have no end in religious conflict in Maluku and Anbun of Indonesia. With many politicians try to protect their own interest and win over the power, the newly elected government may be in danger! We believe STI will move up in the early part of next week but will probably be capped at   2450-2500 level. It will then turn down and challenge the low at 2318 and may eventually find its bottom around 2200-2250 in the coming weeks. As for Sesdaq, it will probably follow closely with STI and settle its bottom at around 135. Only a break below 133 will cause a great concern to us. For the coming weeks, so long as STI does not break below 2180 and Sesdaq stays above 133, we believe our bull market is still intact and may eventually challenge 2750 for STI index in the coming months.

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, we are now in 5th wave. If we are right, the market has just completed the 5th of the 1st of the wave (5) and is now in its abc 2nd wave. In this case, we may have seen a short term top at 2582.90. 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 .

1. The economic data in USA (retail sales, jobless claims, PPI and CPI)
2. The fighting in Malukku and political development in Indonesia.
3. The movement of US stock market and T-bond.
4. The movement of Dollar vs Yen.
5. The stability of Regional and Singapore currencies
6. Regional stock markets movement.
7. Singapore 3 months Inter-bank rate.