updated 12 Dec 2011  

N.B. Above Chart is abstracted from NextView Program
 

Last week we said that, "Well, we were hoping last week a clear direction can be created and that could lead us to a clearer direction for the next two months. However, the intervention by Central Banks only managed to bring the market into a neutral zone and fall short of making the Bull the winner. We are therefore back to the drawing board in search for the next winner. Can the winner arrive this week? I think there is a high chance it will happen. From economic front, this week we have Monday ISM Nonmanufacturing, Meeting between Merkel and Sarkozi, Wednesday Greek 2012 Budget Vote, Thursday China CPI/ PPI and Industrial Production, ECB rate decision, and Friday EU Summit on Debt Crisis. From the above schedule, it is very clear next week market direction will be dictated by what is happening in Europe. Monday Merkel and Sarkozi meeting will be the starter, however the main course should be Friday's EU Summit. If last week joint intervention by Central Banks was done on a well plan basis, then the coming Friday meeting should produce some concrete events to convince market that EU nations are very serious in solving the crisis and therefore push up the market. On the other hand, if coming Friday fails to inject the much needed steroid then the Bear will charge back and force everyone into the cold winter! From technical point of view, S&P and DJIA need to break above 1265 and 12200 respectively in order to put the Bull fully in charge. On the other hand, if S&P and DJIA break below 1200 and 11600 respectively, then the Bear is likely to continue ruling the market." Well, last week volatility was close to our expectation, except we did not expect it was a near draw again between the Bull and the Bear, for we had a big sell down on Thursday but a big buy up on Friday to neutralize the situation. We also said that, "As for STI, it needs to move above 2820 next week for the year end rally to come. Failing which a break below 2685 will resume the downward direction." While the Bull and the Bear were fighting fiercely in global market, our Singapore Bear got an helping hand from the government. The newly announced property tax policy had literally killed all the property stocks and pushed the STI much lower as compare to USA and Hongkong counter part. So what could happen next week? Are we able to get the winner between the Bull and the Bear? Will Singapore market follow the global indexes?

Well, last week we were hoping a clear winner will emerge for there was a big event (EU Summit) happening on Friday. On Thursday, there was a big sell down after S&P putting the whole EU countries into watch list and we thought the Bear had finally shown their secret weapon and should make a clear winner by then. However, came Friday the Bull decided to charge back after getting some positive news from the EU Summit and by closing, it was a tie between the Bull and the Bear. So, there was no clear winner and we have to wait for another week to see who is the winner to determine the next two months market direction. On economic data, next week we have Tuesday FOMC meeting, Wednesday OPEC meeting, Thurs NY Empire Mfg Survey and Philly Fed Survey, all these data may have some impact to the market. As for Europe, we believe they will gradually move out of the main headline news for a couple of weeks and therefore market will refocus on USA economic data. With so much money sitting sideline waiting for the development in Europe plus the year end factor, we believe there still have a good chance the year end rally may come, thought it may not last for long. The fact that Friday's EU Summit did not provide spectacular results, yet market was able to surge up, suggesting to us that the market is ripe for some form of rally despite there is any bad news or not. As such, we believe the Year End rally still possible. From technical front, a break of either side from the range of 1220 and 1265 in S&P and 2600 and 2800 in STI will set the direction for the next two months. So do monitor carefully, for we strongly believe it will happen next week. If you are intermediate term investors,  you may want to wait and buy/ sell on any possible break out of the range stated above. As for short term traders, it would be advisable to switch to day trading and trade on the range until market make its move.

                       Dow Jones   Hang Seng     Nikkei
Resistance      12300           19250             8750
Support            12000           17600             8350

As for STI the resistances and supports are as follow:
Resistance:  2750, 2800, 2890, 2920, 2975
Support:        2685, 2640, 2600, 2570, 2500

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 economic data, Tuesday FOMC meeting, Wednesday OPEC meeting, Thurs NY Empire Mfg Survey and Philly Fed Survey.
4. The news from Europe after the Summit.