N.B. Above Chart is abstracted from NextView Program

Last week we said that, "With USA President been elected last week and the corporate results announcing season is almost over, the market will now focus back to the economic data and waiting eagerly to see who will be the next Treasury of State. As such the economic data such as Thursday Trade Balance and Jobless Claims, Friday Retails Sales and Consumer Sentiment will likely move the market. In addition, speech by Obama on any stimulus packages or announcement of the new Treasury of State will also have some impact to the market. As some part of USA will be having holidays on Tuesday, I would expect a quite start in Wall Street, where market is likely to move up slightly. However come middle to end of the week, it will be succumb to big selling again. The exact wave structure will then be able to properly defined by end of the week." True enough, Dow Jones started with a quite days, but were followed by volatile movement by mid to end of the week, with big swing down/ up/ down till end of the week. We also said that, "As for STI it may attempt to rally in the early part of the week, however by middle of the week, its direction will be closely related to USA market. In other word, it is likely to come down by end of the week. Unless STI breaks above 1950 on good volume that may spur another wave of rally to 2050- 2250 level, the index is likely to pause here before a big sell down." True enough STI had only managed to climb up to a high of 1916 on Monday and began to drop throughout the week. So, what could we expect next week, is the big sell down going to start soon? OR a strong counter trend rally is about to start?

Well, the G20 meeting is certainly a disappointment without much concrete proposals been laid down on table. It is still more like photo sessions of world leaders to say farewell to President Bush! This meeting was certainly do no good to help the wounded market. With a string of economic data lining up next week, such as Monday Industrial Production & Capacity Utilization and the November manufacturing report, Tuesday PPI , Wednesday CPI and Housing Starts and the urgency of funds for Auto Industrial, the market will be very nervous which will set the stage for a bigger fall. If that is true, we will probably see a new low in Dow Jones Industrial by end of the week. While in the next one to two weeks, the market will continue to drop and likely to see a new low, the Global stock markets are indeed in the process of finding a mid term bottom. As such, if you have a deep pocket, you may want to consider some slow accumulation when Dow hit its new low. Expect next week continue to have huge volatility, but as a whole the market should trend lower. As for STI it will retest the 1718 again in the early part of next week. If the support breaks, the index is likely to test its low at 1473 again. So watch out next week as a new low may be seen.  If you are a mid term investor, you may want to start buying when STI reaches below 1500.  As for short term investors, watch out for 1718 level, if it breaks, you should add on your short for the odd on reaching the low or even lower than 1473 is increased.
The following are the support and resistance to watch for Dow Jones, Hang Seng and Nikkei next week.

                       Dow Jones   Hang Seng     Nikkei
Resistance       9000            15320            9520
Support             7880            12900            81500

As for STI the resistances and supports are as follow:
Resistance:      1800, 1850, 1900, 1935, 1950, 2040
Support:            1750, 1717, 1700, 1550, 1500, 1200

Events To watch For The Coming Week:

1. The movement in Dow Jones Industry and NASDAQ..
2. The movement in currencies, oil and commodities price.
3. The development on rescue funds for USA Auto Industrials..
4. The economic data such as Monday Empire State Index, Industrial Production, Tuesday PPI, Home Builders Index, Wednesday CPI and Housing Starts.

The following are two possible wave counts on STI as at to-date:

1. Preferred Count (60% probability)-- bullish count
   My preferred count calling for a top at 2502 (on 7/1/2000) as wave ((1)), it then follow by a two year sell off on wave ((2)) to 1197 (on 28/9/2001). The index had then entered into an  impulsive wave ((3)) that ended at 3906. We are now in the development of wave ((4)), of which we expect it to be a big triangle formation that take about one to two years to complete. The recent sell down is the first leg of wave ((4)), which will take a form of a-b-c and reaches the potential target of 2770, as the wave (a) of ((4)). The index will then continue to develop the (a)-(b)-(c)-(d)-(e) triangle formation.
    
2. Alternate Count (40% probability)-- bearish count
   My alternate count calling for a top at 2502 (on 7/1/2000) as wave ((1)), it then follow by a two year sell off on wave ((2)) to 1197 (on 28/9/2001). The index had then entered into an  impulsive wave ((3)) that ended at 2666 in May 2006. The index had then entered into wave ((5)) that ended on 3906 in October'07. We are now in the downtrend bear market, which will last for a few years! Although this count remains as the least chance as compare to my preferred count. If the index breaks below 2776 convincingly on very high volume, the odd on bear market will significantly increase.

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