N.B. Above Chart is abstracted from NextView Program

Last week we had witnessed a dramatic swing of mood from over bearish to over bullish. On Tuesday S&P went to a low of 1041 before reversing and closed near the week high at 1104.5. There are two ways to interpret current development. First the market is still stuck in range trading between 1040- 1100. Second, the market may be preparing themselves for a break out ahead of November mid term election. Of course, if the first scenario is correct, then S&P is likely to pull back next week. However, if the second scenario does take place then we may see a rally to continue next week. With not many economic data next week (the only important data probably is Wednesday Fed beige book minutes and Thursday Jobless claim). Plus the fact that corporate results announcement is now over, I would expect market to continue trap within the range trading. In other words, I am expecting some pull back next week. However, a convincing break above 1106 will result in S&P continue rally towards 1130 next resistance. As the past three days rallied were huge and was partly due to short covering ahead of long weekend, it is only natural to expect some pull back after the holidays. Hence, the direction clue should not be taken in early part of the week, but rather by end of the week as most traders would have returned back from holidays and the volume should gradually increase from here. Even a break out above 1106 does not guarantee the market will continue to go up. On contrary it may become an exhausted move that lead to a multi months of big decline. We shall inform you by next week update as soon as we can detect the clear direction.  As for STI, it may continue to rally for the early part of the week, especially for penny stocks cause there is no USA market on Monday. In addition the strong rally on eGenting HK will be the added fuel for the penny stocks to move. As such for short term traders buy on dip and sell on rally may be the best thing to do. As for intermediate term investors, may be stayed sideline is a preferred strategy for STI is approaching its top at 3050.  In short, our Singapore market shall remain strong next week until further weakness appear in USA or ASEAN markets.
                       Dow Jones   Hang Seng     Nikkei
Resistance      10500           21100           9300
Support            10160           20500           8950

As for STI the resistances and supports are as follow:
Resistance:   3018, 3040, 3050
Support:        2980, 2950,  2914, 2900, 2880, 285-

Events To watch For The Coming Week:

1. The movement in Dow Jones Industry and NASDAQ..
2. The movement in currencies, bond, oil and commodities price.
3. The news related to 2nd November mid term election.
4. The economic data include Wednesday Fed beige book minutes and Thursday Jobless claim.

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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