 (Updated: 23/04/2000)  N.B. Above Chart is abstracted from Metastock Program Last week we said that, " 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." STI did fall sharply to 1981 last Monday but had since climbed up slowly and closed at 2080 (exactly at the pivot point of our last week commentary). We also said that, "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." We were right to the dot. Indeed, Sesdaq had dropped below 120 last Monday and headed to 111 without much retracement. It had closed at 113.4 last Friday and had not shown much chances of rebound. So, what could be the implication to the coming week? In fact, both Nasdaq and Dow Jones did make a remarkable come back last week and erased out almost half of the losses incurred over the past weeks' plunged. What does that mean to our market? Have we seen the bottom in US market? Is this a correction or a beginning of bear market? Last week's rebound, had brought Dow Jones into slightly above its 50% down move and make a 0.382 retracement for Nasdaq from its top (all time high) to recent low. As such from Elliottwave point of view, next week will be very critical for both markets. If the bear is still controlling then both indices must move down vigorously next week (preferably in an impulsive way) to satisfy the wave expectation. On the other hand, if both indices can stand a tough test next week then the big plunged two weeks ago may be just a correction for the multi-years bull market. Hence we believe next week will be very crucial for the market, and most likely the trend will be determined by Thursday in line with the released of USA Employment Cost Index and the 1st Qtr GDP. As for STI, we would expect it to test a new low in the coming week. As for the target, it will be correlated to the movement in Dow Jones and Nasdaq. The most optimistic view is to test 1965 and complete the wave A. However, if US markets continue to plunge then a test of 1800 is highly possible. We shall let the market tell us the story in the coming two weeks. As for Sesdaq, although a rebound to 116 is possible, it will continue to go down and eventually test 100 and below.
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 .
|