 (Updated: 04/06/2000)  N.B. Above Chart is abstracted from Metastock Program Last week we mentioned that, "with markets deeply oversold now, some technical rebounds are likely. Expect STI to trade within 1920-1780 in the coming weeks before a break down towards 1700 in the later part of June." STI did trade within the range of 1920-1780 last week, and we were right in this area. However, we did say that "The pattern next week will probably be a rally in the early part of the week before circumb to selling pressure and move down by end next week." And we were wrong in this respect. Instead, market when down to test a low of 1782 early last week before bouncing back strongly and closed at 1910 last Friday. So, with the strong Friday's close, the friendly Unemployment data and the strong surged in Dow Jones and Nasdaq, have we seen the bottom? Can STI surge up from here towards new high? These are million dollars questions that we shall discuss now. To me, it seems that there is a high chance that Nasdaq may have hit its Intermediate bottom and is now turning up. Only a break below the recent low will create another panic selling worldwide. As for Dow Jones, it is still confined to a trading range and does not show any preference to move in either directions. Only a break above or below the two distinct trend line will set the trend for the coming months. And we shall be patient to wait for such break out. Technically, all regional stock indices, such as Hang Seng and Nikkei, did manage to break above their respective down trend line last week and are poised for further gains. With no major economic data in the pipeline next week, the positive atmosphere should carry forward at least for the early to middle part of next week. As for STI, we believe it will continue to move up in the early part of the week. But this technical rebound should be capped at 1990-1980 level before profit taking set in. The down trend on STI index is still intake and that a test of new low in the 1700s is still possible in the coming weeks. A clearer picture will only emerge in the later part of June when more economic data such as, PPI and CPI are released and that they can confirm that US economy is slowing down. Failing which, another panic selling may emerge. As for Sesdaq, a rebound towards 105, as per what we predicted last week, is likely and may happen early next week. However, the eventual target of 88 remains possible and may occur by late June. If you are running out of patient and would like to do some bottom fishing, may we suggest you to concentrate on Manufacturing, Electronic and Communication sectors, for we believe if there is an Intermediate bottom insight then the most likely sectors to offer good return will be the above three sectors, so good luck and please do not trade using contra at this stage for the trend is still not confirmed!
We have finally cracked the long awaited 1970-1930 level, which signaled the beginning of an intermediate down trend (at least!) in the coming months. This break down has now open up two possible long term scenarios and we shall discuss them in our long term perspective site. Please check it out for our latest updating in the Long Term Perspective page. One of the possible Intermediate bottom may be at 1700, for it represent the 50% retracement from 800 to 2580. We shall discuss it more detail later.
Events To Watch For The Coming Weeks/Month .
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