By: Kleer Compiled by OCBC Research on 9 January 2008. Will 3,300 hold? We had forecasted in our 28 Nov report that the rebound will wane out as it approached the 3,650 level, which has unfolded as per our forecast. The STI has failed to deliver a sustainable rally over the last 3 months since it rebounded off the 3,300 level in Mid-Nov 07. It tested this support level once in Mid-Dec 07 and is again approaching the 3,300 mark. As the decline over the last 2 trading days was made on the back of rising volume, we could see a little more downside from here, which would take the STI to our immediate support at 3,300. Elliot wave counts suggest the current down wave is segmented into 5 smaller waves. Currently, this puts the STI at the tail end of the current down wave (Wave V), which would take the index below our support level at 3,300. We could witness the STI slips toward our 2nd support around 2,900 - 3,000. But should the 3,300 support level hold up strongly: We could be in store for a strong rebound that would take the STI towards the 1st resistance level at 3,650. However, it would face minor resistance at where the moving averages have converged around 3,500 - 3,550. Conclusion: With the market being extremely volatile at the moment, I would personally prefer to stay out of it at the moment, and only look to bargain hunt if the Index manages to hold at current levels for a sustained period, or if it falls to the 2nd support of 3,000. I may also look to rebalance my portfolio if we can see a rebound to 3,600 levels. Whatever it is, these are difficult times, and it is important stay calm, stay on course, and not make rash and emotion decisions. Source: Extraordinary Profits My Comments: I was expecting a rousing start to the new revamped STI index but I was wrong. I expect the current slide to continue for a little while longer (maybe till the 3000 points level). Once it has stabilized, it would be a good opportunity for me to look at certain stocks especially those in the STI index.