(Updated: 19/03/2000)

N.B. Above Chart is abstracted from Metastock Program

We had said in our last week's commentary that, "Expect our market to be very quite in the early part of the week with a downward bias. As for Dow Jones, its inability to stay above 10,000 has suggested to us that a new low may be in the making, and could be happening by end of the week. As such, STI will probably be heading towards 1970 by then." STI did move down in according to our expectation and on Wednesday hit a new low at 2015. However, Friday's strong rebound was some how out of our expectation. It was mainly due to the strong performance from Dow Jones overnight   499 points surge. This had created the interest in buying our "old economy" blue chips. At this juncture, we may ask ourselves if the low of 2015 created last Wednesday could be considered as short term bottom, after all it was only 45 points above our 1970 target? We shall try to answer this question later. As for Sesdaq, we had said that, "It will continue to drift lower and may test its important low at 128." Indeed Sesdaq had plunged last week and hit a low of 126.51 on Wednesday before making a rebound and closed at 128.94 last Friday. How is this index going to performance in the coming week? When can our retail investors see the day light after being in the tunnel for so long?

With the Taiwan opposition win the President election last Saturday, we now have an additional uncertainty factor to look after. And like it or not, stock market does not like uncertainty. As such, this will be a negative factor for Asia stock markets in the coming week. As for Dow Jones, it had make some remarkable come back last week, with an increase of nearly 1,000 points for a week. Can it continue to move up from here? We doubt so. It has now reached its short term resistance at 10800-10900 level and is likely to form a short term top from here. Next Tuesday will be the long awaited FOMC meeting. Although it is widely expected to have a 0.25% increase in interest rate, the most important issue will come from the announcement by Fed committee on Wednesday, as to how the Fed's stand on interest rate for the coming months. Subsequently, we will have companies in USA start to make their pre-announcement before the release of 1st quarter results. As such, any surprise move (such as the case in Proctor and Gamble) may have negative impact to the market. With all these in mind, even though our market is highly over sold, we could not be over enthusiastic on any strong rebound. Expect STI to move lower in the early part of the week, with a possible of closing the gap at 2050. It will then stay sideways for further consolidation and unwinding the oversold condition. Expect it will stay between 2115 to 2020 for the coming week. As for Sesdaq, the fact that it had broken below an important support at 128, make us really worry. It will likely test the important low at 123.4 in the early part of the week. If it can hold at that level, then the index will stay in the range between 133 to 123.4 towards the end of the week. However, if it fails to stay above 123.4 in the early part of the week, then all penny stocks may be heading for a big big trouble!

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.

We have finally decided to put 2583 as the top of wave 5 of wave (5), even thought theoretically we should wait until STI close below 1970. This premature labeling may lead us into a wrong picture for the long term, if STI eventually stay above 1970 and do not break below it thereafter. But nevertheless, the early we make our stand, the easier it is for our investment decision. At current stage, we would prefer to be prudent then to be sorry later. We will of course continue to monitor closely and should circumstance require us to rethink the wave labeling, we will not hesitate to do so accordingly.

Events To Watch For The Coming Weeks/Month .

1. Tuesday's FOMC meeting and Wednesday announcement by Fed after the meeting.
2. The possible tension between China and Taiwan after 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.