 (Updated: 14/05/2000)  N.B. Above Chart is abstracted from Metastock Program Last week we said that, "Expect STI to move within the range of 2234-2050 next week. Only a break above 2234, will signal a continue rally to 2300-2365. However, if it breaks 2050, it will probably go down to test the recent lower towards 1960. As for Sesdaq, a continue rally in the early part of the week towards 125-127 is quite possible, but will probably reverse its direction by middle to end next week, when many contra players unwind their holding of last week's position." Initially STI was confined to the range between 2150-2050 and was behaved within our expectation. But then, when Nasdaq plunged 200+ points on Wednesday, coupled with a big sell off in Nikkei (-800 points) on Thursday, it had triggered the selling in STI too. Indeed, last Thursday was a bloodbath in Asia (only Hongkong and Korea managed to avoid the massacre for they were on holiday), many regional stock markets confronted with a big fall and that STI had broken its more than one month consolidation range of 2000-2200 and tested a low of 1986. Although last Friday, it did make a come back and closed at 2026.65, the chart had definitely been damaged. As for Sesdaq, it did not create a new high, instead continued to drift lower and closed at 115.75 last Friday, well below the pivot point at 120. Can STI hold its two months consolidation range at 2000-2200 or will it fall below 1970? How about Sesdaq, any hope of further rally or is it going to drop towards 100 as per our prediction few weeks ago? These are the questions we hope to get the answers. While early last week was a big sell off in US market, both Dow Jones and Nasdaq indices did manage to halt the selling above their recent low. In addition, the friendly retail sales and PPI data that released last Thursday and Friday did lend some support to the market. The fact that both indices did manage to hold above their recent low are an encouragement to the bulls, but that does not mean that the worst is over. On contrary, the Fed meeting and CPI that are about to release on Tuesday, may be the main events that the market is longing for. At present, we believe the odd is still favoring another sell off in Dow Jones and Nasdaq towards a new low, before a more meaningful rebound can occur. This could happen either after the Fed meeting or towards the end of May. As for our market, it simply has too much to worry in the month of May. The Fed meeting on 16/5, the tension between China and Taiwan, the riot in Indonesia, the coming IPO of BCA bank in Indonesia and the bearish outlook of Nikkei etc. These are the huge uncertainties that may affect our market one way or another. Besides, the break down in our financial sector index last week, and the weakness exhibit in both properties and manufacturing sectors indices, had shown us that there would probably no prominent sector that is capable of leading our stock market out of the wood yet. With these in mind, if STI can continue to trade within the range of 2000-2200, is considered lucky! But we believe, the odd is probably belong to the bear, and that a break of support at 1930-1970, will probably see STI drops towards 1800-1850 level. Next Thursday is a public holiday in Singapore, the shorter trading week will add further selling presure to the market. As for Sesdaq, expect it to continue drifting lower. A break below 110, will signal a continue sell off towards 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.
Events To Watch For The Coming Weeks/Month .
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