Friday, August 28, 2009

My Thoughts on STI

As we approach September, the path will get more treacherous...
Many analysts are talking about September ~ October as the beginning of the crash... With a contrarian approach, it most likely would not be at the Sep~Oct period, and with the analysis gathered from this thread, I've 3 scenarios (which can be considered duh)

1) Downturn already started.
2) Downturn starts in Nov/Dec.
3) As with DBS's count, we have only just completed major A of Primary B (shall post a chart on it soon)

However, my EW timeframe counts fall inside that same timeframe of Sep ~ Oct, which is not a contrarian conclusion.

Primary A took 17 months (I believe from Oct to Mar, since I observed 5 waves down)... so... would primary B be that short?

The timelines are quite clear now... If Pri B is 0.382 times of Pri A, that means 6.5 months... We would see the end of Pri B by October.

Other supporting reasons would be, within Pri B,
i) Int A ended on early June (3 months)
ii) Int B ended on mid july (1.2 months, 38.2% of int A)
iii) Int C probably same time length as int A, so mid July add 3 months. That's October as well!

So to me, the timeline falls in place for me...

But I might be wrong... Many are starting to feel quite bearish now..., and looking to exit their positions, opening shorts, etc...

For people with longer time frames, it's not a good time to long now, and it's certainly too opportunistic to raise shorts.

I'm expecting a wave 3 now, but it could be a wave 5 given the news and fundamentals, so I would probably sell UOB when the end of this wave is near, but keep the dividend stocks until all is clearer...

Lastly, with so much excess cash sidelines, there's still a remote possibility that this correction might be a A-B-C-X-A-B-C correction, that means 7 waves worth (we are only at the 3rd wave), and could possibly bring STI back to 3900 or beyond, resulting in a multi-year expanded flat. "Trade the trend until it breaks": raise shorts only when the uptrend has confirmed been broken...

As Dust at CNA Forum likes to say, a trader is not a perma bull or a perma bear, but a businessman and opportunist. A pre-emptive strike is not recommended...

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