(Updated: 09/04/2000)

N.B. Above Chart is abstracted from Metastock Program

Last week we had said that STI should trade within the high of 2180 and a low of below 2100. Although the range was within our expectation, the movement was a surprise to us. Instead of moving up in the early part of the week and came down towards the end of the week, the index had moved in the opposite way (ie. moved down in the early week and surged up by end of the week). Nevertheless STI had not changed much on its bearish picture. As for Sesdaq, we said "An attempt towards 133-135 is quite possible, but should eventually drop towards 125 and possible lower by end of the week." It had never tried a high towards 133, instead heading down all the way to a new low of 120.50 for the year. This index had indeed fulfill our past month worried on its potential bearishness. With Nasdaq now showing some signs of calmness and Dow Jones seems to have stabilised, can these indices bring back the confident in our local bourses? What will be the immediate direction for STI and Sesdaq in the coming week? Will Nasdaq try another low in the coming week? These are the questions we are trying to explore for this week.

A big drop of over 500 points (intraday basis) in Nasdaq last Tuesday had us wonder how long the bull market can last. Over the past few months, we had been experiencing some very volatile movement in both Dow Jones and Nasdaq indices. This phenomena usually signal to us that a prominent top may soon be formed. For it is a classic case that both bulls and bears are fighting vigorously to make their respective stand. As such, there is a high possibility that a super (or grand super) cycle top for US stock market is now in the making. However, that does not mean that it is now entering the bear market and indeed there still a possibility that, we may see another new high in both Dow Jones and Nasdaq, before the end comes. For next week, the 1st quarter corporate results will kick in, with many expect the results should be better than expectation. Also, we will have the March retail sales and PPI come out on Thursday and the CPI releases on Friday. While corporate reporting season usually accompany with volatile stock price movement, the PPI and CPI may set the tune for the direction of stock market in the coming month. Although, Dow Jones seems to be able to hold its past week gains and stayed within a tight range in the past few days, we believe it will eventually drift lower and may test a new low below 10700 to complete its correction. As for Nasdaq, a continue rally in the early part of next week is quite possible, but will need to test its low again to see if 3649 can hold. With these in mind, there are not many good news that can provide a helping hand to our stock market. Not to mention that, the verbal attack between China and Taiwan may escalate into a new tension between the straits. As such, we expect STI will probably hold its corrective bound at 2170-80 level and resume the down move towards 2015 and below in the later part of the week. Only a break above 2234 will make us re-consider our bearish view and the wave count. As for Sesdaq, it remains the weakest of all the indices, and that any rebound shall be kept at 129-130 level, before heading lower towards 119 and possible much lower. A break to a new low last Wednesday at 120.50 (previous low was set at 123.41 on 19/7/99), had certainly set a bearish tune for the index in the coming months. Last week, we said that " Our electronic and manufacturing sectors are now looking ripe for some form of correction in the coming weeks." Hope that you did take our advise and sold the stocks in the early part of the week, for we believe the correction may continue for awhile and is very much dependent on the direction of Nasdaq for the coming weeks.

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. But nevertheless, the early we make our stand, the easier it is for our investment decision. At current stage, it looks as if that we may have completed the wave B at 2234.65, for it represent 0.382 pull back for wave A (although we would prefer wave B to end at 2300, but since it has moved to our expected range of 2200-2300, we may consider the wave completed). If this is correct, then we can expect STI to head for 1965 as first target and may eventually drop to 1800 soon. Only a move above 2234 will make us re-examine the above short term wave count.

Events To Watch For The Coming Weeks/Month .

1. Thursday's March retail sales and PPI, as well as, Friday's CPI.
2. The possible tension building up between China and Taiwan.
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.