support (2608) and nearest resistance (2892-2919)

thunderous 400-odd point surges in May (from 1950 to 2350) and July from 2250 to 2650, the still youthful bull may continue to be unstoppable

until a test of the next 2900 historic area. Intermediate resistance around 2750 is a mere 50-odd points away as

the STI touches 2700 this morning and yet it is still only above the half way mark (2643) between 3831 peak and 1455 bottom.

All the yawning gaps during the Sept-Oct 2008 crash from 2763 to 1474 have been filled but there is still another 670 points to go to last year’s

opening high of 3371 from 2700. There were 3 occasions when 2750 acted as support and resistance last year.

First after Jan 2008 600-point crash from 3370 to 2747 followed by a strong rebound to 3130 and another plunge to 2746 in March. This was

followed by another rally to as high as 3270 before the next stage of market collapse began, accelerating by Sept from 2763.

But with the clear V-shaped recovery underway, the STI should test 2750 and higher levels as indeed this year’s market behaviour has a

significant resemblance to the 1999 post-Asian crisis super-bull run. It is highly unlikely that a new record above 3831 can be seen this year

unlike in 1999 when the pre-Asian crisis high around 2150 was broken and the STI topped up at a new peak of 2608 in Jan 2000, 15 months

after it bottomed out at 800 in Sept 1998.

Although the latest bull run is only 5 months if measured from March low of 1455 or 9 months from last Oct low of 1474, investors can be

expected to start worrying very soon about the short term sustainability of the bull run which has not seen 5-8% pullbacks since June and early

July. The earnings season will end in the next couple of weeks and while anticipation of better than expected results had fired up the market,

consolidation should soon set in to in second half of August.

It may not be worth to wait for 2750 to be tested first as the STI is expected to test its half way mark of 2643 and 2608 before it moves

higher from 2700-2750. A pullback from 2750 to 2600 is a mere 5% and it is even a smaller drop of 3.7% from 2700 to 2600.