A bit more upside

Currently 2007 and Oct 1987 - Black Monday
Source: Bloomberg

With Wall Street's follow through rebound last Friday, we expect regional markets to see more upside today. However, I expect both the KLCI and STI's upside to be capped. KLCI's 61.8% Fibonacci at 1,297 is expected to keep a lid on any rise. I see sellers waiting to pounce around those levels. As for STI, I believe that the 3,404 or its 62% Fibonacci level should cap gains.

Looking ahead, I still see a sharp correction ahead. This correction could even be worse than the previous one we just endured. Remember Oct 1987? See the resemblance? The Dow is 'currently' on its rebound just before Black Monday! If the Dow trades in a similar pattern as Oct 1987, then this rebound could end in about 2 trading days!! History to repeat itself here 20 years later in 2007? Only time will tell...