(Updated: 16/04/2000)

N.B. Above Chart is abstracted from Metastock Program

Last week we had predicted many issues and were all very close to the call. First, we said that "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." The big plunge in Nasdaq and Dow Jones over last week had merely fulfill over our prediction. Second, we also said that "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." In fact, last Friday's released of CPI had caused the big crash in both Dow Jones and Nasdaq, which we believe it is just the beginning of many volatile days/weeks ahead. Third, we said "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." And it was right to the dot, for both Dow Jones and Nasdaq had plunged through 10700 and 3647 supports and well below the levels. Fourth, we said that "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." This was a bit tricky, for STI did manage to break above 2180 last Friday and closed at 2189. The strong closing last Friday, made us a bit high, for many investors thought that this could be the one that will bring the index up and test the 2300 target! The thesis was further supported by the fact that this up move was engineered by foreign funds, where strong buying by them were seen in the finance and property sectors. Just we were about to celebrate the party last Friday, our friends across the Atlantic Ocean had us caught completely wrong footed. As we were expecting them to join us with Champaign, instead they brought us "Bloody Mary" and had destroyed our mood completely over the week end. So, what can we expect in the coming Monday? Will STI made a reverse and crash! If not, when will we see a bottom in US market? These are the million dollar questions that every one is look at now. We will try to answer them this week.

With Nasdaq continued to go down over the past one week without a single rebound, the momentum indicator is now deeply oversold. However, that does not mean that a rebound is a must under such condition. Not to mention that the market is now at its crash mode! We are not sure how bad the damage were created in USA over last week massacre, what we are worried are the force selling and margin calls which may cause another big slide in the market. There are a few main supports in both Nasdaq and Dow Jones just below current levels, ie. 2800-3200 for Nasdaq and 9800-10200 for Dow Jones. These levels must held in order for the bull to have a chance to make its stand. Failing which, the bear will take full control and the world will be heading for big trouble!!! Although, our Singapore market seemed to be quite immune to the fall in US market over the past one week, our market is simply too small to escape the big fall by uncle Sam and companies. As such, a panic openning on Monday is expected. As to how much is the damage, it will be determined in the coming two days. The pivot point for STI will be between 2080-2120 range. If the index broke below this level, we will be heading towards 1965 and potentially much lower. On the other hand, if this level prove to be strong support and STI manages to bounce back from there and close above that level next Friday, then an attempt towards 2300 is still possible. As for Sesdaq, we do not see any possible of moving above 130, instead a drop below 120 is highly possible. And the index should eventually drop towards 100 in a few months time. For investors who have been followed closely to our weekly commentary, you would probably manage to escape this masacre, for we have been stayed in the bear camp since the beginning of the year. Remember, it is easier to call for buy during the bull market, but only selected few (brokers) dare to be honest and provide a sincere view to lead you out when bear market strikes.
The following are major resistance and support to watch for Dow Jones, Hang Seng and Nikkei next week. We feel that the markets will be very volatile and that major supports and resistances will become the crucial points to watch for the bulls and bears.

Any break-out on these levels, will certainly affect our STI movement.

We have 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. Monday's Asia market opening as well as the over night trading on US futures indices.
2. Any possible supports from the G7 meeting.
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.