(Updated: 05/03/2000)

N.B. Above Chart is abstracted from Metastock Program

Last week we said, "Expect STI to move down and test its major support at 1980-70 level. A rebound from there in the latter part of the week, may be possible but will not alter its down trend. As for Sesdaq, it will eventually break its support at 146 and headed lower to test 142 and below." For STI, although it was on a down trend throughout the week and moved in according to our expectation, the underlying seemed to be well supported. It had moved to a low of 2093 but failed short of our 1980-70 target. As for Sesdaq, we were right to the dot! It did move down and broke its support at 146 and eventually closed below 142. Does it mean that our market is now confirmed in a bear mode? Can STI make a rebound after a good performance in US market last Friday? If not, are we continue heading towards STI 1980-70 in the coming week? These are the questions we would try to answer this week.

With a big surged in Dow Jones of 202 points and another record breaking in Nasdaq last Friday, it will certainly give a positive start for our Singapore market tommorrow. However, the question remains. Is Dow Jones having a technical rebound due to heavy oversold situation or could it turn out to be a medium term bottom? The big move in Dow was created due to a softer-than-expected employment data, which in itself is rather argumentative and may not represent a fact that economy has slowed down. However, the up-move last Friday had Dow Jones broke its down trend channel, which could be of significant. Perhaps a more accurate picture will emerge next week, which will than give us a better clue as to whether we are heading for a good rebound! As for STI, expect it will move up early next week towards 2150-70 level. The first two days will probably tell us if STI has a strength to move further up or make another U turn to test its expected low at 1980-70. Only a break above 2220 with good volume, will give us a confident that STI is now entering into its big upmove towards 2350. We are not sure how good is the chance, but we believe the next two or three trading days will give us a clue on this matter. As such, we shall watch closely next week for indication. As for Sesdaq, with the close below 142 it now looks more vulnerable. If by next week, it still unable to close above 145, it may be heading for big trouble. A break below 137, will lead to a test of 133 and may eventually form a rising wedge with a target of 103. It is certainly too premature to make such a call, but nevertheless we should not over look such danger for the coming weeks. There are many uncertainties hanging in the air for the month of March. First, starting 15th March, we will have a shorten down on shares delivery days from T+5 to T+3. This will have a great impact to contra players in the short term and will lead to a period of low volume transaction due to a hold back on short term speculation. Second, the Fed meeting on 21st March will also deter investors to hold new positions when we are approaching the date. Third, the conflict between China and Taiwan may escalate during the final two weeks of Taiwan president election. In addition, some surprises may come from Indonesia too. All these may have negative impact to our market! On the other hand, if STI manage to gain some ground and close above 2170 on Monday. It may receive another boost from DBS result, which suppose to be announced on Monday evening. As such, it may break 2220 and move up towards 2350. Whatever it is, we believe a true story may prevail next week.

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.

Ever since the beginning of the year, we have not changed the labeling of our wave counts on the above chart. This is because, technically the high of 2583 on 3rd January'2000 can still be either be wave 1 or wave 5 of bigger wave (5), thought the possibility for the later case has greatly increased over the past two weeks. Only a break below 1970 will confirm that we are now in a bear market (a big wave (II)). For the time being, there are two possibility for the short term wave counts. First, 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. Second, we may have just completed the 5th of wave (5), we can only confirm the case when STI breaks below 1970. 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. Monday's speech by Mr Alan Greenspan on "New Economy".
2. The possible tension between China and Taiwan during Taiwan President election.
3. The political development in Indonesia.
4. The movement of US stock market and T-bond.
5. The movement of Dollar vs Yen.
6. The stability of Regional and Singapore currencies
7. Regional stock markets movement.
8. Singapore 3 months Inter-bank rate.