(Updated: 26/03/2000)

N.B. Above Chart is abstracted from Metastock Program

Last week we said, "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." Although STI did move lower last Monday, the low was at 2073 and subsequently it began to move up and hit a high of 2158 before settled at 2146 last Friday. The stronger than expected performance in STI was mainly fueled by the strong surge in Dow Jones and Nasdaq. In fact, the breathtaking   up-surge by both Dow Jones and Nasdaq had caught us by surprise, and make us wonder if this is another bubble in the making? As for Sesdaq, we said " 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!" Sesdaq did move down to 124.89 last Monday but did not touch the target of 123.4. Instead it turned up from there and headed to 133.04 before settled at 131.47 last Friday. So, does it mean that Sesdaq can now hold its low now? If so, have we seen the short term bottom by now? How long can we expect this rebound to last?

With S&P heading for record high, Dow Jones strong rebounded with a gain of 11.6% within two weeks, and Nasdaq climbed back vigorously to near its all time high, it make us wonder when will the old & strong bull come to an end in US market? It is a bubble in a bubble? Perhaps time will tell and we should just be patient and wait for the story to unfold. As for the timebeing, although Dow Jones seems to be deeply over bought now, a strong pull back may not happen very soon. Perhaps it will take a breather and consolidate sideways for the coming weeks. With not many important economic data to be released next week, investors will probably forces on any possible pre-announcement by companies in regard to their 1st quarter corporate result. As such, next week will probably be a sideways market for Singapore and the Asia region too. Expect STI to open flat and may come down a bit to 2080 in the early part of the week, but will eventually move up to test 2200 by end of the week, or if not the week after. As for Sesdaq, it will continue to be the weakest index in the market and will track closely with STI movement. However, it will probably trade within the range of 135-129 in the coming week. Manufacturing and Electronic stocks shall continue to be the star performance in the coming 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.

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. The possible tension between China and Taiwan after Taiwan President election.
2. The 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.