 (Updated: 18/06/2000)  N.B. Above Chart is abstracted from Metastock Program Last week we commented that, "The markets are now back to a trading range where the bulls and bears are trying to out beat each others but dare not come out with any big commitment. Only a break above 4,000 for Nasdaq and 11,000 for Dow Jones will trigger another bull run (may be a summer rally towards a new record high!). However, if the above two resistance manage to cap the US market rally, then a new low on both indices are still possible." Indeed both Nasdaq and Dow Jones did trade within a trading range last week and had yet to provide a clue as to where the next big move is! We also said that, "we believe STI will come down in the early part of the week towards 2015 and lower. The pivot point for STI next week will be at 2015, a drop below this level will lower the trading range for STI towards 1900-2000 level for the coming weeks before the Fed meeting." STI did trade around the 2015 pivot points a few times over the week and just closed marginally below it at 2012 last Friday. As for Sesdaq, we said that "It may pull back and consolidate around 105 before setting up for another big move." Again, we were right, Sesdaq did move down last week from 109 to a low of 104.48 before closing at 106.72. So what will happen next? Are we going to stay in this dull market for another week? When can we expect the next big move to come? Was the big plunge in Dow Jones last Friday (-265 points) a sign that another big sell off is coming soon? Like we had said one week ago, the US market is now entering into a sideways consolidation phase and until today, both Nasdaq and Dow Jones have not given us a clue as to where the next big move is heading. Although last Friday's drop of 265 points in Dow Jones did cause some concerns, it was still closed within the well define support trend line of a possible diamond head. So long as Dow Jones does not break below 10400-10300 on close basis, the consolidating phase shall remain intact. However, if the 10300 is broken decisively than we may be heading for another big trouble! And this could be another big sell off in the global stock markets. Judging from the past week's performance and the shortage of economic data to be released next week, we believe the US market will remain sideways and that Dow Jones will probably remain in the tight range next week until some big events explored. As for STI, it shall behave as per our commentary last week, i.e. will drop below 2000 and eventually stay within the range of 1900-2000 for further consolidation. Sesdaq will also drift lower and consolidate within the range of 100-105 next week. The market next week shall remain quite and simply looks like a calm before a storm! We believe the month of July will be an interesting one, for most of the global markets will eventually make a break out and set up an intermediate trend. However, we have to be patience and wait for the market to tell us which direction (trend) it is heading to. So, do trade cautiously until a clearer picture emerge. 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 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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