(Updated: 16/01/2000)

N.B. Above Chart is abstracted from Metastock Program

We had another lucky guess correctly predicted again last week. We said, "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." STI did move up to a high of 2468 last Monday (within the range we predicted). It then started to drift lower and touched a low of 2363 on Friday before closing at 2392. Although it did not challenge the recent low of 2318, it was indeed come close to the target. The whole week's movement was also very close to our expectation, with an initial up-move to be followed by a downward correction. Although last week was full of US economic data together with an important Mr Greenspan's speech, Dow Jones had managed to hold on to its gains and continued to break its record high. This will certainly give a booster to our market next week, but can we say that the correction is now over?

Well, it will be too premature to declare that the current big correction is now over. However, last Friday's record close in Dow Jones (+140 points) has   certainly given the bull a great moral support. We believe the movement in Dow Jones in the coming week  will tell us a story as to whether the current consolidation is over. If Dow Jones can continue to move up in the next two trading days and close on Friday above 11750, then we can say that the correction may be over. Failing which, if Dow Jones break below 11700 in the early part of the week and stays negative through the week, it will look more like a continuation of an irregular flat consolidation. In this case, STI will follow Dow Jones with a possibility of testing a new low below 2318, towards an eventual target of 2280.
We are now living in a rapid develop globalization world, with not much local news in the pipeline, our STI will mirror closely on the Dow Jones movement. As such, it pays to keep a great attention on the Dow movement over the week. A break up in Dow, will kick start our long awaited Chinese New Year rally. However, if Dow chooses to stay in a doldrums, we may have to postpone our New Year's bull run celebration. Expect STI to move up in the first two days of the week, with a possible of testing 2520 (to close the gap). As for the mid to end of the week, it will depend very much on the Dow's performance. Not to mention, there are heavy corporate results to be announced in the coming week, hence a volatile movement in Dow Jones is expected. Under such circumstances, we remain cautiously bullish and await for the confirm signal from the market. As for Sesdaq, it will probably trade within the range of 140-155 level.

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 corporate results in US (especially the 10 Dow's component stocks).
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.