History of Jakarta Composite Index
1999

20th December: Nothing much happening over the last couple of weeks. But a few nice scenarios, including a long term scenario with target of 1,150. Could be nice for the new year.

Current prediction

Short term: none

Medium term: none

Long term: a double bottom or reverse head and shoulders pointing to between 800. Good volume. Good chance of success.

Currency: appears to have bottomed - but resistance is approaching.

29th November: The market is looking a little weak, with worst case being a fall back to 500. But the long term picture still looks good. Average volume is increasing. I would therefore pay close attention to long term supports before getting bearish about this market. 560 is the next one to watch.

Current prediction

Short term: reverse head and shoulders points to 680

Medium term: none

Long term: a double bottom or reverse head and shoulders pointing to between 800. Good volume. Good chance of success.

Currency: appears to have bottomed - but resistance is approaching.

15th November:. The index could be making a bullish short term pattern. Volume is building. But the index stopped on a resistance last Friday. Currency also turned on resistance last week. It could weaken by as much as 10%.

Current prediction

Short term: reverse head and shoulders points to 700.

Medium term: none

Long term: a double bottom or reverse head and shoulders pointing to between 800. Good volume. Good chance of success.

Currency: appears to have bottomed - but resistance is approaching.

8th November: The short term prediction of 700 looks quite probable. Volume could be a bit better. But long term prospects look good, suggesting that the index has made a medium term bottom.

Current prediction

Short term: reverse head and shoulders points to 700

Medium term: none

Long term: a double bottom or reverse head and shoulders pointing to between 800. Good volume. Good chance of success.

Currency: appears to have bottomed - but resistance is approaching.

25th October: The index broke out of a reverse head and shoulders pointing to 700. Volume supports the prediction.

Current prediction

Short term: reverse head and shoulders points to 700

Medium term: none

Long term: a double bottom or reverse head and shoulders pointing to between 800. Good volume. Good chance of success.

Currency: appears to have bottomed - but resistance is approaching.

11th October: A double bottom broke last week, pointing to 650. But we need to see a break above 620 or 630 to cancel our bearish target of 455 with confidence. My feeling is that the long term prediction of 800 has a greater chance of succeeding than the bearish top pointing to 455. But let's wait a week to see.

Currency could be bottoming. But it suffers the same ambiguity as does the index.

Current prediction

Short term: double bottom points to 650 - valid provided that the index remains above 580.

Medium term: head and shoulders top points to 455 - questionable

Long term: a double bottom or reverse head and shoulders pointing to between 800. Good volume. Good chance of success.

Currency: 9,400

4th October: A valid short term pattern points to 440. But the index could be making an interruption pattern at the current level, which coincides with the neckline of our long term pattern pointing to 800. The currency could also be bottoming, failing which, we should keep in mind the possibility of a fall to 11,200.

Current prediction

Short term: none

Medium term: head and shoulders top points to 440

Long term: a double bottom or reverse head and shoulders pointing to between 800. Good volume. Good chance of success.

Currency: 9,400

27th September: The currency is still supported on the neckline of  our pattern pointing to 800. If the market falls to 480, we can cancel the prediction of 800, and the bull market. The currency is sitting on a good long term support. But if it falls through, we could see 11,200.

Current prediction

Short term: none

Medium term: none

Long term: a double bottom or reverse head and shoulders pointing to between 800. Good volume. Good chance of success.

Currency: 9,400

20th September: The index is well supported at the current level. The target of 800 would not be cancelled unless the index fell below 520 (possibly 500). But the currency could still fall to 9,400.

13th September:  The JCI rallied last Friday, confirming our target of 800. But the currency is still in danger of falling to 9,400 and possibly somewhere between 11,000 to 12,000. Of course, political risks could upset the picture without warning.

Current prediction

Short term: wedge suggests a return to 700 in the short term

Medium term: none

Long term: a double bottom or reverse head and shoulders pointing to between 800. Good volume. Good chance of success.

30th August: Not much movement last week. The short term picture is ambiguous. But the long term picture looks good, provided the index stays above 530.

Current prediction

Short term: none

Medium term: none

Long term: 1.  a double bottom or reverse head and shoulders pointing to between 810 and 830. Good volume. Good chance of success.
2. A double bottom with horizontal neckline, confirmed by pullback to 570, gives a slightly higher target of 860 - 880

Currency: none

23rd August: The index has recovered above the neckline of the top pointing to 420. If the index breaks above 595 or 600 (to be safe) we will have a breakout  from the falling wedge. If this happens on good volume, we can look forward to our target of somewhere above 800.

Current prediction

Short term: head and shoulders top pointing to 420 - now in doubt: will be cancelled if the index breaks above 600

Medium term: none

Long term: 1.  a double bottom or reverse head and shoulders pointing to between 810 and 830. Good volume. Good chance of success.
2. A double bottom with horizontal neckline, confirmed by pullback to 570, gives a slightly higher target of 860 - 880

Currency: none

16th August: The index confirmed a short term target of 420. But there is a falling wedge forming. If the wedge breaks upside, the bearish target will be cancelled. Target of 800 therefore remains valid until the index falls below 520.

Current prediction

Short term: none

Medium term: none

Long term: 1.  a double bottom or reverse head and shoulders pointing to between 810 and 830. Good volume. Good chance of success.
2. A double bottom with horizontal neckline, confirmed by pullback to 570, gives a slightly higher target of 860 - 880 - cancelled

Currency: target of 6,000 cancelled

9th August: The index is well supported. 570 is the crucial support this week.

Current prediction

Short term: none

Medium term: none

Long term: 1.  a double bottom or reverse head and shoulders pointing to between 810 and 830. Good volume. Good chance of success.
2. A double bottom with horizontal neckline, confirmed by pullback to 570, gives a slightly higher target of 860 - 880.
3. A reverse head and shoulders points to 1,000. The geometrical proportions are not good. But volume is good, giving a good probability of reaching target.

Currency:  strengthening towards 6,000

2nd August: On balance, the long term prospects look good. The index has pulled back and turned on a good support. But the top pattern, a head and shoulders, is in danger of being repeated on a larger scale. Then there will be a danger of a double top at 720, if the index reaches this level on low volume. But these "failure scenarios" are unlikely.  The bottom line is that the long term reversal patterns are good and attended by good volume. Odds are that they will work.

Current prediction

Short term: none

Medium term: none

Long term: 1.  a double bottom or reverse head and shoulders pointing to between 810 and 830. Good volume. Good chance of success.
2. A double bottom with horizontal neckline, confirmed by pullback to 570, gives a slightly higher target of 860 - 880.
3. A reverse head and shoulders points to 1,000. The geometrical proportions are not good. But volume is good, giving a good probability of reaching target.

Currency:  strengthening towards 6,000

19th July: Nothing much happened last week that could throw out clues as to the short term direction of the market. The fund chart shows a big resistance approaching. But in the event of a fall, 590 should be good support.

12th July: The short term direction of the index is unclear. The long term fund chart suggests a possible period of consolidation. 750 presents a strong resistance.

Current prediction

Short term: none

Medium term: none

Long term: 1.  a double bottom or reverse head and shoulders pointing to between 810 and 830. Good volume. Good chance of success.
2. A double bottom with horizontal neckline, confirmed by pullback to 570, gives a slightly higher target of 860 - 880.
3. A reverse head and shoulders points to 1,000. The geometrical proportions are not good. But volume is good, giving a good probability of reaching target.

Currency:  strengthening towards 6,000

28th June: Anything's possible, but this is more than just a vague hope. The index is doing very well. It has now consolidated within the long term bullish trend channel that defined the market's ascent prior to crash. A slightly distorted pattern with good volume could take the market up to the resistance at 1,000 as soon as August, otherwise September or October.

All this depends on channel supports holding. There are three channels to note. They are clearly marked in the chart below. But the important thing to note is that average volume, shown in one of the long term daily charts below, is double the previous volume high. This fact makes a surge to 1,000 a good bet.

Current prediction

Short term: none

Medium term: none

Long term: 1.  a double bottom or reverse head and shoulders pointing to between 810 and 830. Good volume. Good chance of success.
2. A double bottom with horizontal neckline, confirmed by pullback to 570, gives a slightly higher target of 860 - 880.
3. A reverse head and shoulders points to 1,000. The geometrical proportions are not good. But volume is good, giving a good probability of reaching target.

Currency:  strengthening towards 6,000

21st June: The index broke out of a pennant last week. Target is 790. But there is a weekly resistance at 740 approaching.

Current prediction

Short term: a pennant points to 790, but there is resistance at 730 and weekly resistance at 740

Medium term: none

Long term: 1.  a double bottom or reverse head and shoulders pointing to between 810 and 830. Good volume. Good chance of success. 2. A double bottom with horizontal neckline, confirmed by pullback to 570, gives a slightly higher target of 880.

Currency:  strengthening towards 6,100

14th June: The surge last week reveals a neckline giving a higher target of 880. Volume is good. Supports are between 620 and 640.

Current prediction

Medium term: none

Long term: 1. reverse head and shoulders points to 670 - good chance.
2.  a double bottom or reverse head and shoulders pointing to between 810 and 830. Good volume. Good chance of success. 3. A double bottom with horizontal neckline, confirmed by pullback to 570, gives a slightly higher target of 880.

Currency:  strengthening towards 6,100

7th June: The index might have finished its short term correction, as it now sits on some very good supports. The fund chart also gives cause for hope. But there is a strong resistance that must be overcome at around 630. After that, if volume is still good, the next resistance would be at 670 and then nothing much before 770. On the other hand, we could see a pullback to 530, if the resistance is not passed.

Current prediction

Medium term: none

Long term: 1. reverse head and shoulders points to 670 - good chance.
2.  a double bottom or reverse head and shoulders pointing to between 810 and 830. Good volume. Good chance of success.

Currency:  strengthening towards 6,100 or turning on long term resistance.

31st May: The market looks reasonably stable. The greatest probability is that the market is correcting to either 560 or 520 before turning. The currency, on the other hand is ambiguous and presents a big uncertainty. It could be strengthening towards 6,100, or it could be topping out, in which case, the downside would be 12,000.

24th May: No clear short term signs. The market is rising to target at 660. There's a weekly resistance at that level. Fair chance that we will see this target in the next week or two before a short term correction. But the index is rising on lower volume, suggesting a possible short term correction.

Current prediction

Medium term: none

Long term: 1. reverse head and shoulders points to 670 - good chance.
2.  a double bottom or reverse head and shoulders pointing to between 810 and 830. Good volume. Good chance of success.

Currency:  strengthening towards 7,000; resistance at 7,500

10th May: The index broke out of our double bottom scenario last week. Volume was huge. Target of 810 is confirmed. Higher targets may be confirmed if the index pulls back.

Current prediction

Medium term: none

Long term: 1. reverse head and shoulders points to 670 - good chance.
2.  a double bottom or reverse head and shoulders pointing to between 810 and 830. Good volume. Good chance of success.

Currency:  strengthening towards 7,000; resistance at 7,500

3rd May: The market and the currency are moving according to my speculations. Let's see if we see 520 this week and a turn.

Current prediction

Medium term: none; but the market could make a small reverse head and shoulders pattern over the next few months, in symmetry with that of the last quarter of 1997. This pattern, if attended by increasing volume, would complete the long term reversal pattern.

Long term: a reverse head and shoulders points to 680, but volume is weak and the market might prefer to consolidate at 520 -540 and form a larger pattern.

Currency:  strenghtening towards 7,000; resistance at 7,500

26th April: The index could be making a compound reverse head and shoulders pattern. Take a look a the long term daily chart below for a scenario. If this were to happen, we should see three more attempts at 520 over the next few months, with volume building on the final attempt. Let's see. This is just a hunch, but rarely do we see such a complex pattern. Chances are good, especially in the context of the regional correction.

The currency has a chance of rallying to 7,000. It has broken a resistance and has made a reversal pattern, but these have proven unreliable in the past. Let's see.

Current prediction

Medium term: none; but the market could make a small reverse head and shoulders pattern over the next few months, in symmetry with that of the last quarter of 1997. This pattern, if attended by increasing volume, would complete the long term reversal pattern.

Long term: a reverse head and shoulders points to 680, but volume is weak and the market might prefer to consolidate at 520 -540 and form a larger pattern.

Currency:  none

19th April: The market broke out of a reverse head and shoulders on good volume pointing to 680. The pattern has good symmetry. However, while volume was good at the point of breakout, the right shoulder did not build up volume throughout its formation. The pattern therefore has only a medium chance of success. The index could stall at 520. But this would give the index a chance to consolidate and make a larger pattern. The fund chart looks encouraging.

Current prediction

Short term: nada

Medium term: none

Long term: a reverse head and shoulders points to 680, but volume is weak and the market might prefer to consolidate at 520 -540 and form a larger pattern.

Currency:  none

14th April: The index has rallied to a long term resistance point. But the long term fund chart has broken its long term resistance. If the index is to rally further, we would need to see more volume.

26th March: A symmetrical head and shoulders top is taking shape. A fall to 360 would confirm the pattern.

Current prediction

Short term: nada

Medium term: head and shoulders top pointing to 295 - cancelled

22nd March: Our head and shoulders top was cancelled by the retracement of the index above the neckline of the pattern. However, the accompanying volume was not persuasive. The retracement could serve to give a larger head and shoulders top pointing to a lower target, perhaps near our long term support of 270.

Current prediction

Short term: nada

Medium term: head and shoulders top pointing to 295 - cancelled

15th March: The market is set to tumble to 295 at least, unless the long term support at the current level intervenes. If the market does fall to 295, there is unlikely to be good long term support before 270.

Current prediction

Short term: nada

Medium term: head and shoulders top pointing to 295.

8th March: The index is making a short term reversal pattern that would confirm 290 if the index falls below 375. A short rally to 420 might occur first.

1st March: Daily turnover has fallen to its lowest level in three years. Not the stuff that rallies are made of. The most likely scenario is a rapid fall to 350, 300 and then 270 on the long term weekly support. But the neckline of a head and shoulders top at 370 must break before we can see this train set in motion.

15th February: Volume fell off last week, lowering chances of an imminent rally.

8th February: A placid week last week. The index did nothing much. But the currency pulled back to our double top, changing the prediction to 9,900.

Current prediction

Short term: none

Medium term: none

Long term: Triangle pointing to log target of 234 is on hold. But the weekly chart still points to 186. (250 log and 270 is good support).

Currency:  double top pointing to 9,900. Support points to March 9th or thereabouts.

1st February: The weekly chart still shows short term support for the index. But a short term pattern in the daily chart suggests that a top could be coming. A review of volume in the daily chart over the past two years suggests that a long term reversal is not likely in the coming months. A new low is possible.

Current prediction

Short term: none

Medium term: none

Long term: Triangle pointing to log target of 234 is on hold. But the weekly chart still points to 186. (250 log and 270 is good support).

Currency:  double top pointing to 10,300

25th January: The index retraced below the neckline of our last bullish pattern, cancelling all positive predictions. The only operating pattern now is the long term target of 234. The rupiah broke out of a double top pointing back to 10,300.

Current prediction

Short term: 470 cancelled

Medium term: none

Long term: Triangle pointing to log target of 234 is on hold. But the weekly chart still points to 186.

Currency:  double top pointing to 10,300

11th January: The index has a chance of hitting 585. But the weekly charts still show bearish danger.

Current prediction

Short term: 470 approaches and a new target of 585 is encouraging. Good volume over the next few weeks will assist.

Medium term: triangle pointing to log target of 234 is on hold. But the weekly chart still points to 186.

Long term: none.

Currency: Chance at 4,000



1998

21st December: Not much new this week. The index has not given any encouraging signs. Volume is falling off, reducing chances of 470. But there's still a chance.

Current prediction

Short term:  reverse head and shoulders pointing to 430 has been touched. Now we have a  target of 470. All depends on volume.

Medium term: triangle pointing to log target of 234. Weekly chart points to 186. These are still valid.

Long term: Weekly chart  head and shoulders pattern with a log target of 157. Cancelled.

Currency: Chance at 4,000 if the current resistance breaks.

14th December: The index moved sideways last week, failing to confirm or invalidate predictions. Let's see what this week brings.

Current prediction

Short term:  reverse head and shoulders pointing to 430 has been touched. Now we have a  target of 470. All depends on volume.

Medium term: triangle pointing to log target of 234. Weekly chart points to 186. These are still valid.

Long term: Weekly chart  head and shoulders pattern with a log target of 157. Cancelled.

Currency: Chance at 4,000 if the current resistance breaks.

7th December: Short term gives us a prediction of 470, if volume picks up. But the long term picture suggests that the peak at 430 could have been the top of the recent rally. All depends on the market getting over long term resistances at around 460 on strong volume.

Current prediction

Short term:  reverse head and shoulders pointing to 430 has been touched. Now we have a  target of 470. All depends on volume.

Medium term: triangle pointing to log target of 234. Weekly chart points to 186. These are still valid.

Long term: Weekly chart  head and shoulders pattern with a log target of 157. Cancelled.

Currency: Chance at 4,000 if the current resistance breaks.

18th November: Volume picked up over the past two weeks and a new pattern has broken out pointing to 430. Good chance. But there are strong resistances facing the index. Note that the index is still in a medium term down trend and that there are medium term patterns pointing down which have not yet been cancelled.

Current prediction

Short term:  reverse head and shoulders pointing to 430. Recent volume surge improves chances.

Medium term: triangle pointing to 164 on an arithmetic scale (log target is 234). Weekly chart points to 186. A double top points to 208.  These are still valid.

Long term: Weekly chart  head and shoulders pattern with a log target of 157. Cancelled.

Currency: Chance at 4,000 if the current resistance breaks.

4th November: The market isn't picking up volume. It needs MORE VOLUME to sustain the rally. Failing the volume, the market could miss the fun that the rest of the region is enjoying. Note that all of the long term bearish targets are again valid.

Current prediction

Short term:  reverse head and shoulders pointing to 390. But volume is not building up consistently. Chances are now not so good.

Medium term: triangle pointing to 164 on an arithmetic scale (log target is 234). Weekly chart points to 186. A double top points to 208.  These are still valid.

Long term: Weekly chart  head and shoulders pattern with a log target of 157. Cancelled last week. Valid this week.

Currency: Resistance at 7,000. Chance at 3,500 if the current resistance breaks.

23rd October: A nasty medium term resistance has turned the index. But as at Friday's close, it was above the neckline of the short term reverse head and shoulders. So the short term hopes are still good.

Current prediction

Short term:  reverse head and shoulders pointing to 390. Volume for the pattern is fairly good. Chances are reasonable. But keep your eyes on the neckline for a possible failure.

Medium term: triangle pointing to 164 on an arithmetic scale (log target is 234). Weekly chart points to 186. A double top points to 208.  These are still valid.

Long term: Weekly chart  head and shoulders pattern with a log target of 157 is cancelled.

Currency: Resistance at 7,000. Chance at 3,500 if the current resistance breaks.

19th October: Long term prediction of 157 is cancelled. But the medium term triangle prediction with log target of 234 is still in tact. A new reversal pattern last week looks promising. But we should see a bit more volume before getting too excited. If volume builds up, we could see 390 in the short term. The Rupiah is defying the odds and could test 7,000 soon.

Current prediction

Short term:  reverse head and shoulders pointing to 390. But volume isn't great. Medium probability.

Medium term: triangle pointing to 164 on an arithmetic scale (log target is 234). Weekly chart points to 186. A double top points to 208.  These are still valid.

Long term: Weekly chart  head and shoulders pattern with a log target of 157 is cancelled.

Currency: Resistance at 7,000. Chance at 3,500 if the current resistance breaks.

12th October: There are a few encouraging signs for the JCI: a small reversal pattern that could build into something else, and good volume. But no lower targets have yet been cancelled. The currency has a chance of recovering considerably if it can break 9,000.

Current prediction

Short term: tiny double bottom pointing to at least 315

Medium term: triangle pointing to 164 on an arithmetic scale (log is 234). Weekly chart points to 186. A double top points to 208.

Long term: Weekly chart has a head and shoulders pattern with a log target of 157.

Currency: Resistance at 9,000. Chance at 4,000 if the current resistance breaks.

14th September: The index is taking advantage of good support. But it is not expected to hold.

7th September: The index has come to good support in the long term weekly chart. But the triangles pointing to 200 and below are still valid. There is also a weekly triangle pointing to 210.

Current prediction

Medium term: triangle pointing to 164 on an arithmetic scale (log is 234). Weekly chart points to 190. A new double top points to 200.

Currency: Resistance at 10,200

31st  August: A double top points to 200, adding weight to the probability of further falls.

Current prediction

Medium term: triangle pointing to 164 on an arithmetic scale (log is 234). Weekly chart points to 190. A new double top points to 200.

Currency: Resistance at 11,000.

24th  August: We now have further confirmation of an impending fall with the weekly chart pointing to 190.

Current prediction

Medium term: triangle pointing to 164 on an arithmetic scale (log is 234). Weekly chart points to 190.

Currency: Resistance at 11,000.

12th  August: As if things couldn't get worse, we now have a confirmed target of 164 that could happen as early as December this year, if the current supports hold.

Current prediction

Short term: triangle pointing to 164 on an arithmetic scale (log is 234).

Medium term: none

Currency: Turn at 12,600 resistance allows the possibility of a fall to 18,200

3rd August: If we don't see 500 in the next week or two, chances are that the index will be at 160 by the end of the year. The reason for this prediction lies in the triangle forming in the medium term chart. If the index turns at its current level, it will be completing the triangle pattern. A fall through 400 would then take the index down to a new, dizzy, low.

Current prediction

Short term: triangle pointing to 505, still valid, but chances are diminishing as the index has turned on resistance at 490 .

Medium term: none

Currency: 18,200 questionable, due to the extent of the fall before the pullback to 12,600. But still possible.

27th July: The index is making one of two possible patterns: a double top, pointing down, or an ascending triangle which gives a tiny chance of a rally to 530. But I would not bet my last krupuk on it.

Current prediction

Short term: triangle pointing to 505, still valid, but chances are diminishing as the index has turned on resistance at 490 .

Medium term: none

Currency: 18,200 questionable, due to the extent of the fall before the pullback to 12,600. But still possible.

22nd July: The index has approached a tough resistance that could spell the turning point for a plunge. No signs of further rallying.

Current prediction

Short term: triangle pointing to 510, still valid, but chances are diminishing as the index has turned on resistance at 490 and is making a double top. (see next week).

Medium term: none

Currency: 18,200 questionable, due to the extent of the fall before the pullback to 12,600. But still possible.

14th July: Nothing clear this week. The long term weekly chart shows a turn on long term resistance, suggesting further falls.

Current prediction

Short term: triangle pointing to 510, still valid, but chances are diminishing as the index turned last week.

Medium term: none

Currency: 18,200, possibly by the last week of July.

6th July: The good news is that the gloom prediction of 343 is cancelled. The bad news is that the index could be making a larger pattern showing long term bearishness. And the Rupiah is still on track for 18,200

Current prediction

Short term: triangle pointing to 510.

29th June: The index still has a valid double top hanging over it. The predictions are given below.

Current prediction

Short term: double top - 314 target arithmetic and 342 logarithmic

Medium term: none

currency: 18,200, possibly by the last week of July.

22nd June: The index is making a short term triangle that should soon give clear direction. The index needs to break above 450 before we can cancel the double top prediction. There is also a chance that the Rupiah will continue to weaken.

Current prediction

Short term: double top - 320 target. 360 long term support might intervene.

1st June: The index is still heading down to 320. Could happen by the end of June.

25th May: The rally last week took the index above the neckline of our double top, giving rise to doubt over the pattern. The pullback occurred on very low volume. Thus the pattern is not cancelled. I expect the index to fail and fall back. The weekly chart was less euphoric than the daily chart. It closed below the neckline for the double top. Thus the double top prediction of 350 is still valid.

The currency passed our prediction of 14,500, but only intra-day and was not recorded on our chart. There is now no clear prediction for the currency.

18th May: Despite the gloom, there is a small chance for a reversal at the current level if the long term supports of the index and the fund hold sway. But the valid predictions point down further. Read on.

11th May: The index is heading to 320, perhaps as soon as the middle of next month. The rupiah could go to 14,500. But it could just as easily strengthen this week.

Current prediction

Short term: double top - 320 target. 360 long term support might intervene.

Medium term: none

4th May: The index is in danger of making a double top that could take it back to its previous lows of 330.

Current prediction

Short term: none. Currency could go to 5,900.

Medium term: none

27th April: The index could be making a double top that would take it back to its recent low at 310. However, volume supports a reversal pattern at the current level that could see a breakout to the 700 level.

Current prediction

Short term: none. Currency could go to 5,900.

20th April: Still encouraging volume patterns building, but Friday's close suggests that the market might be in for a few swift falls.

Current prediction

Short term: short term weekly chart points to 725 - doubtful. Currency 5,900, more likely.

Medium term: none

11th April: A strict reading of the charts says that the index is heading up to 725 and the currency is heading for 5,900. The latter prediction has a good chance, but with the rest of the ASEAN region looking decidedly weak, I don't give the stock market rally much hope.

Current prediction

Short term: short term weekly chart points to 725. Currency 5,900.

Medium term: none

20th March: The index broke out of a long term resistance last week. The short term picture still looks promising. But the currency gives no clear indication of direction.

Current prediction

Short term: a triangle pointing to 640. Breakout is close to the apex. But need not stop the prediction. Resistance 550.

Long term: none

16th March: Well how about that! The IMF news didn't do diddley squat to the index last week. It kept rising "noiselessly", as its habit. Now we have two patterns that, together, point to 800 for this index. I suppose, in dollar terms, 800 is not such a high target. Given that the currency has fallen so much, the dollar value of 800 is equal to about 200, compared to the dollar value of the index a year ago. In other words, it's real cheap. (Doesn't mean to say it's worth anything though. We leave that to the fundamental analysts to ponder.) So let's not get surprised if something weird happens, like the index surging to 800.

Current prediction

Short term: a triangle pointing to 640. Breakout is close to the apex. But need not stop the prediction. Resistance 550.

Long term: none

9th March: Despite bad news in the market, the index continued to rally and the reversal continues to take shape. The currency, however, is back on the fast track to 13,000 or below.

2nd March: Indonesia is lagging a bit behind other ASEAN countries, but the reversal scenario is still building up nicely. The currency is subject to many conflicting influences, but it has a chance of reversing to 4,000.

23rd February: The recovery scenario looks good. Volume is still strong as the market rises. This phenomenon - market rising on good volume - occurred during the worst of the uncertainty about the currency board and riots. Journalists in Jakarta were at loss to explain it. That is why it pays to pay attention to the charts and not get too excited about news reports.

I confess that I took the currency board thing too seriously. Thanks God it has fizzled out and Suharto has conceded that it is a nonsense. But trading nonsense doesn't do a lot of good for the credibility of the country. In hind sight it appears to have been an impossibility that the currency board would be established. But who knows how desperate the government is to buy time till the election next month?

16th February: The index is still within safe bounds for making a reversal. But the currency is heading south again.

Current prediction

Short term: reverse head and shoulders pointing to 510, has been reached.

Long term: Head and shoulders pointing to 220 is cancelled. But the neckline has been broken again. So it could still happen. 10th February: The rally over the past two weeks has clearly cancelled the 220 scenario. The fund has tuned on its long term support. The currency also looks as though it has reversed.

Current prediction

Short term: reverse head and shoulders pointing to 510, has been reached.

Long term: Head and shoulders pointing to 220 is cancelled.
.
31st January: The rally continued last week, such that the index has retraced above the neckline of the pattern that gave rise to the prediction of 220. It's not decisive. But it is sufficient to put the gloom prediction on hold. Thus we have cause for a glimmer of hope that the worst is behind us.

This week sees a bit of resistance at the outset. But our prediction of 510 has a little way to go.

Current prediction

Short term: reverse head and shoulders pointing to 510.

Long term: Head and shoulders pointing to 220, on hold.

26th January: The index moved nicely towards our target. The neckline of the head and shoulders has even been touched. This puts the 220 target on hold for a while. But the wretched currency situation makes the stock market a powder keg.

Current prediction

Short term: reverse head and shoulders pointing to 510.

Long term: Head and shoulders pointing to 220. This will be cancelled if the index reaches the short term target.

19th January: There is a good chance of a rally to 500. If the target of 500 is met, we can cancel our bearish prediction of 220.

Current prediction

Short term: reverse head and shoulders pointing to 510.

Long term: Head and shoulders pointing to 220. This will be cancelled if the index reaches the short term target.

12th January: Nothing very encouraging. The currency doesn't look like it's going to improve in a hurry.

Current prediction

Short term: triangle target of 350 fulfilled.

Long term: Head and shoulders pointing to 220.

5th January: Now that the index is halfway to its target of 220, it seems pretty likely that it will keep on going.

Current prediction

Short term: triangle target of 350 fulfilled.

Long term: Head and shoulders pointing to 220.



1997

29th December: Now that the index is halfway to its target of 220, it seems pretty likely that it will keep on going.

Current prediction

Short term: triangle target of 350 fulfilled.

Long term: Head and shoulders pointing to 220.

Now that the index is halfway to its target of 220, it seems pretty likely that it will keep on going.

8th December: The only good news is that the fund has reached target and has turned. Otherwise, there's nothing radical to report. Of course, there is a good chance that the market will take encouragement from the rest of the region. It might be a laggard.

Current prediction

Short term: fall to 350 possible.

Long term: Head and shoulders pointing to 220.

1st December: The bad news is that the medium term chart points to 220. The good news is that the fund has nearly reached its minimum target.

17th November: The long term support of the index and the short term fund chart both show at least a little more weakness. But there is no telling for sure that the next supports will hold. In short, there is no end in sight to the downtrend. But the signals are mixed and the index has a chance to rise if the green falling wedge in the medium term chart breaks out upside.

Meanwhile, the Rupiah has a good chance of strengthening to 3,100. But it might fall to 3,500 first.

Current prediction

Short term: fall to 350 possible. But if the green wedge in the chart below breaks upside, we might see 600.

Long term: Still a down trend until a good reversal indicates otherwise. Keep in mind the bearish omens, pointing down to 350, 250 and even 150. These are still possible: the long term head and shoulders pointing to 250 is valid.

27th October: One or two charts point down to 450. But the long term fund chart has come to rest on a good long term support, suggesting a possible reversal. The rupiah is still not giving clear direction.

Current prediction

Short term: fall to 450 possible.

Long term: Still a down trend until a good reversal indicates otherwise. Keep in mind the bearish omens, pointing down to 390 and below. These are still possible.

20th October: Only one positive sign: the falling wedge in the fund chart. It could be a reversal pattern. But the currency could go either way. See the new Rupiah chart.

Current prediction

Short term: a bit of falling until the wedge in the fund chart breaks.

Long term: Still a down trend until a good reversal indicates otherwise. Keep in mind the bearish omens, pointing down to 390 and below. These are still possible.

13th October: The index has broken out from the long term descending channel, giving hope for a rebound, but not necessarily for a durable rebound. The falling wedge in the fund chart also suggests short term gains.

Current prediction

Short term: short term gains

Long term: Still a down trend until a good reversal indicates otherwise. Keep in mind the bearish omens, pointing down to 390 and below. These are still possible.

6th October: The short term charts look sinister - all pointing down; some as low as 400, even 200. The long term charts nonetheless give some hope for support at current levels.

Current prediction

Short term: an invalid triangle points to 400.

Long term: Who knows, but the fund suggests a possible further fall of 47%, corresponding to 232 on the index or the equivalent of the 1992 low. See below. Note that the funds are denominated in US$ and could be indicating further weakness in the currency.

26th September: The long term index chart still shows the market trapped in the descending channel. The fund chart has broken out of its similar descending channel. But no reversal pattern has yet formed. Accordingly, no signs of a recovery yet.

22nd September: Still in the nasty down channels. But the short term picture might, possibly, fingers crossed, hope for the best, be making an ascending triangle.

8th September: Despite the rises of last week, the index and the fund chart are still trapped in the bounds of a descending channel. There is no reversal pattern. Accordingly, the trend is still down.

Current prediction

Short term: none

Long term: Who knows, but the fund suggests a possible further fall of 47%, corresponding to 232 on the index or the equivalent of the 1992 low. On the other hand, the index has turned on a good long term support, which may sustain a durable reversal..

1st September: The index fell to a firm support last Friday. A rebound to 580 would not surprise. But a fall to 410 or even 330 is possible, if the index fails current supports and if a small head'n'shoulders in the fund chart is to be believed.

Current prediction

Short term: a rebound to 580 is possible, but not a prediction

Long term: Who knows, but the fund suggests a possible further fall of 47%, corresponding to 232 on the index or the equivalent of the 1992 low. See below.

25th August: The index fell another twenty points today to around 550 (not shown on the chart). Next support is 530. Another rough week.

Note that the fund chart also shows good support at the current level.

18th August: Nasty little head and shoulders eh? It shaved off about 15% of the index in a week. The daily chart could show a support at current levels, but I doubt the index will stop here. The more likely scenario is a support at 570, on the weekly chart.

Current prediction

Short term: Test of weekly support at 570 possible.

11th August: The index fell unexpectedly last week, to fulfill the minimum of our unlikely head and shoulders top. The minimum for the head and shoulders takes the index exactly to the medium term support of 670. The index could hold here. But the long term fund chart suggests a dangerous fall, corresponding to about 580 on the index.

Current prediction: testing medium term support

Short term: The reverse head and shoulders pattern pointing to 765 is cancelled.

Long term: ?

4th August: The index turned obediently on the support at 710, corresponding to the neckline to our reverse head and shoulders. The fund, on the other hand, is showing a little weakness.

A possible head and shoulders danger, if the index falls below 710. In that case, a fall to 670 would be on the cards. But let's not get alarmist. Increasing volume and rising neckline are two factors that weigh against the possibility.

28th July: The index closed last week right on the neckline at 710. This is a good support for our reverse head and shoulders with target at 765. Accordingly, I expect the index to hold and turn here. There are no clouds on the horizon, except the possibility of a double top on the fund chart (low probability).

Current prediction: going up

Short term: Most recently: A little reverse head and shoulders pattern shown in red, pointing to 765.

20th July: The index is taking a breather, while holding on to current levels. Nothing much to report.

14th July: The weekly chart shows that the index has a major obstacle to overcome. The fund chart has a similar, long term obstacle.

8th July: The long term fund picture deserves attention this week. It is right at the point of breaking out of a long term reverse head and shoulders that could see the index hit 1000 in the long term.

The index passed the danger point clearly last week. Accordingly, the prospect of a double top is past on the index.

Short term: Most recently: A little reverse head and shoulders pattern shown in red, pointing to 765.

Medium term: Two reverse head and shoulders patterns, each of which has a target of around 730. The first starts in April and finishes in December last year. The second pattern slopes downward from January to May of this year. Necklines and arrows are shown in pink.

29th June: Looks like a good market to be in. Prices are moving up steadily in nice channels. And the long term picture looks positive, especially on the fund chart.

A pullback to the neckline last week and a turn back up on Friday all occurred within the rising channel.

Last week passed the previous top on the index, but not decisively. We are still in the caution zone, if not the danger zone. The fund hasn't yet reached its recent high and so the double top possibility hasn't been tested.

The long term picture appears to have passed the double top danger, but not decisively.

Short term: Most recently: A little reverse head and shoulders pattern shown in red, pointing to 765.

Medium term: Two reverse head and shoulders patterns, each of which has a target of around 730. The first starts in April and finishes in December last year. The second pattern slopes downward from January to May of this year. Necklines and arrows are shown in pink.

23rd June: The index is continuing to move toward the objective. Volume is picking up nicely. That should help things. The index is still in its ascending channel (starting in March) as is the fund.

Note that we are in the double top danger zone. A close above 740 would allay that fear. (No cause for alarm)

Current prediction: going up

Short term: Most recently: A little reverse head and shoulders pattern shown in red, pointing to 765. Volume and closing prices for today are not shown, and so the prediction is a little premature.

Medium term: Two reverse head and shoulders patterns, each of which has a target of around 730. The first starts in April and finishes in December last year. The second pattern slopes downward from January to May. Necklines and arrows are shown in pink.

16th June: Today at lunch time the index broke the neckline of a little reverse head and shoulders that should, in the near term, surpass our target of 730. The new target of 765, if it occurs in the next couple of weeks, would correspond with the long term resistance point shown on the chart below (and a wise profit taking juncture).

9th June: A little flag is forming. If it breaks out this week, the index will approach our target in one or two days and pass by the resistance at 710-720.

2nd June: The index passed our short term target of 685 last week, on very high volume. A bit of consolidation around the 700 point level could finish the trip to 730 with a pennant. Danger of a double top is shown in the short term fund chart.

26th May: The index is moving slowly but surely, turning on a good support at around 650. Cause for cautious optimism.

12th May: Nice progress toward short term target.

28th April: The index continued to rise last week, confirming the nice turn on the long term support.

8th April: Last week saw our target of 640 being met. A bit of consolidation is going on. We are right back at our neckline now, shown by the pink line. According to theory, the index should now rise to at least 730. But there's a lot of weakness in other ASEAN markets, so a little caution is warranted.

28th March: We have a bit of a turn at 646, and a break out of the channel. Meanwhile, the fund shows a good support at $8.2. Could this be a "near enough" satisfaction of the target? 1% off the mark (ie, 6 points) is pretty close. I doubt it. A very nice head and shoulders at work here: expect 640 or below.

The danger is that we could be making a little shoulder for a new head and shoulders. That would be catastrophic indeed; it would take us back down to 600 or below. But let's not panic yet. Patience... see what this week brings.

24th March: The JCI inched closer to our target of 640. Those hoping for a bull market can pray that the index turns there, because this 640 point is the neckline of our lovely reverse head and shoulders. Thus, a fall much below 640 will wipe out our target of 730. I'm a bit of an optimist. I think it will hold, having faith in the long term picture. But who knows!

If the index follows the little red channel, it could reach the objective in the middle of April.

17th March: Last week the index fell through the neckline of a head and shoulders top. See below for a description of the formation. A pullback to 680 would not invalidate the prediction.

10th March: Astute visitors will note that we have enlarged our ascending channel in the chart below. Cheating? Perhaps not. The index turned at its furthest (widest) point in the ascending channel. We only have two touches on this channel, both on the support (bottom line) and resistance (top line). But the new channel clearly shows the pattern of the ascent and demonstrates that there is no cause for alarm yet.

There is, however, danger of a head and shoulders forming. If the index rises to, say, 700, on low volume and then falls through the neckline at 680, we could expect a pullback to the pink line at 650, or below.

However, our target has not yet been reached and there is every reason to believe that it will be met.

The weekly chart below, shows the resistance that the market has been facing recently.

3rd March: The average volume of the JCI is pushing the index higher in its channel. We could see our target in a week or two.

14th February: Well that's nice! The index broke up through 700 and kept going. Let's see what it does next.

10th February: The index made a new closing high last week, albeit on falling volume. The volume fall-off may be attributable to Chinese New Year festivities in other countries. To continue our uninterrupted advance toward our target of 730, we would like to see the index break the 700 level this week, on high volume. Otherwise we would be in danger of a retreat to 650.

3rd February: Still nice volume on the JCI. Nothing much else to see, as the index continues to channel up.

27th January: Volume picked up very nicely last week, as we had hoped, thus confirming our expectation that the index will reach its target of 730. However, as the long term picture reveals below, the index has heavy resistance to penetrate. This may take a while.

20th January: The cloud on the horizon of our rosy outlook remains. Volume has not picked up significantly and the index appears to be dithering between 650 and 660. Overall volume is still good. But a sharp rise towards our objective without good volume is unlikely.

The fund chart above paints a more hopeful picture.

13th January: The index consolidated last week. However, volume failed to build up. Our target is therefore subject to some doubt. See also the fund chart below, which has just penetrated a major two year resistance.

4th January: Series of reverse head and shoulders formations: As expected, the index broke out of a new reverse head and shoulders pattern (pink neckline at 640).

(We expected the breakout due to the earlier head and shoulders (green neckline shown below at around 590). The minimum target for the earlier head and shoulders is 660. Reaching this target requires the index breaking through the second neckline at 640. And breaking 640 means a higher target.)

Subject to our comment below, we now have a new target of around 750. This is show by the pink arrow. In the chart above.

However, a pullback to 635 and consolidation at this point may occur due to the strong resistance in the fund chart, above.

Volume weak: The volume on the breakout was not strong. Theory requires that a breakout be accompanied by strong volume. The low volume may be explained by the lassitude in the markets on the part of foreign investors due to the silly season. If this is so, we may expect volume to pick up during the coming week. Volume, in general, is good. It is building up on the right side of the head and the right shoulder. This buildup supports the hypothesis outlined above. A few days of improved volume during the week of the 6th will confirm our view that 750 is in the bag.



1996

23rd December: The index is consolidating around the 625 - 635 point. This consolidation is making a shoulder (pink neckline) which, if broken, will take the index to 750. Our analysis with the lower reverse head and shoulders (dark line at around 590) suggests that the pink neckline will break.

If these hypotheses occur, our analysis with the two year fund chart, below, suggest a further rise of about 35%, taking the index to around 850.

Volume is still increasing.

16th December: No clear signs yet. A break above 640 would confirm another reverse head and shoulders. A fall below 610 would make a double top, suggesting a fall back, at least, to the neckline at 590 - 600.

10th December: The index is continuing towards its target of 660. The pink line could show another reverse head and shoulders, in which case, the target would be around 730. The fund chart confirms the breakout from a new reverse head and shoulders pattern.

25th November: After a second, smaller pullback, the JCI is proceeding nicely to its minimum target of 660. A break of the pink line at 623 will make a new reverse head and shoulders formation raising the target to around 700. This level would be a new record for the index. Fingers crossed.

16th November: Oooh! Aaaaaah! Wasn't that lovely! As predicted, the JCI pulled back exactly (intraday) to the neckline. It then rebounded with new steam, shooting up nearly 3% on Friday. The arrow shows our minimum target. Volume is picking up.

November 9th: The index broke out of the resistance shown by the green line at 590. This line marks the neckline of a reverse head and shoulders, or a symmetrical triangle. The target would be the same: 660. Volume on the breakout was reasonably strong, but not convincing. However, the JCI usually fulfills triangles. This historical observations should encourage a modicum of confidence in the minimum objective.

A pullback to 590 would not be any cause for concern.

18th October: This index does triangles nicely, as can be seen by the triangle outlined in pink. [I'm afraid we deleted that one. But you can see the symmetrical triangle starting in August and breaking out in early September.] The minimum objective was done. Then we had a nasty drop. The index then dropped sharply, consolidating around the 570 mark. This consolidation could be a pennant (except that the volume has been increasing in the last two sessions). If so, the Index will fall to around 540. Note that the Index closed the week under the 25 period moving average (green line).


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