| 09/25/2002 Thurs 09:30 am Thurs The low of STI at 1326 yesterday and the bounce from here suggest that a technical rebound is underway. Venture seems well supported at 11.50 and Chartered has cleared 1.00 and these are positive technical signs. On the geopolitical front, it is now less likely that Bush can declare a war on Iraq unilaterally as Democrats have thrown the spanner into the Bush plan for war as they accused him of politicizing the war. Britain's labour party is also having a split in their support for Blair's total endorsement of the Bush war doctrine. Without Britain at his side, George Bush could find it lonely going into Baghdad this winter. Another potential positive market development is the fact that out of 12 Fed governors, 2 dissent votes in the last FOMC meeting suggesting that we could get one more rate cut before the year is out. There are many emails returned, apparently due to job change, email change or simply due to lack of quota from hotmail. pls update your email if you have change job or email address. Tuesday STI next support is at 1350 and a bounce can be expected when this target is tested. The next major target is at 1320. The impact of war talks is almost fully factored in and with stochastic and rsi at deeply oversold level, a bounce could come sometime this week. Semi-con and tech stocks could be the first off the block and even without a rate cut in tonight's FOMC, sellers may be scarcer at current levels. The only players are expected to be hedge funds and they are playing a musical chair of who will be the last to cover their shorts. Friday As the Dow plunges, some signs that world markets are slowly getting out of the rut. Europe fell but the margin of their falls is much lower than the Dow. Some bottoming process for the short term is building up in Chartered Semi-con as prices are seen supported at 1.10. With Merrill Lynch and Temasek having to pick up their rights issue, there are some assurance that it could see interest lower down. Whilst the gloom is evident on Wall street with Bush hell-bent on going to war with Iraq come what may, it could take a while before we see Dow stocks getting back into a bull phase. Some accumulation of defense related stocks is possible as a war means big business for the likes of GE, Alliant etc. Meanwhile, I-com privatisation offer suggest that too many stocks are near bargain levels when it makes sense for major shareholders to take them out of the public's fold. This may be the time to look for viable companies with potential future earnings to pick up and keep for the next bull run. Previous commentaries |
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