STI Updates

I refer to the two previous posts on my wave counts:

STI Updates (Contrarian)
STI Updates (A-B-C-X-A-B-C count)

STI reached a low of 2623 yesterday. This coincides with the lower support line of the larger ascending triangle in both counts.

In both counts, I presented a final upwave. The main difference is the magnitude of this upwave. The first points to around 2740 as target, the second points to 29xx region as target. That's a 200 points difference.

But regardless of whether one it is, both counts points to an upwave, and it would be putting the cart before the horse to buy put warrants or short the market at the moment.

My main reason why I'm still mildly bullish:
Triangles are corrective in nature in Elliott Wave theory.
The ascending triangle is plotted from STI 2700. After a corrective bearish wave would be an impulsive bullish wave.

There's indeed glaring divergence all over the place, but divergence do not necessarily mean the downturn will come immediately. The cure to divergence, as always, could also be higher prices.

Germany's DAX closed at +154.9 (2.78%) and Dow Jones closed at +124.17 (1.28%) the day before. Good luck trading.

LC Dev Technical Analysis

For the previous one on Starhill Global Reit, we saw an ascending triangle breakout. Btw, I'm still keeping Starhill.

Now, a stock is seeing similar chart pattern.

Let me present to you, LC Dev!


Near support for ascending triangle. The stochastics is up, MACD turning positive soon, RSI at acceptable region and moving up, GMMA showing signs of a compressive break upwards.

The Bollinger band is also closing up, along with the moving average compression analysis (13 MA, 21 MA, 34 MA, 55 MA, where 13, 21, 34 and 55 are fibonacci numbers) is showing signs of a strong compressive breakout too.

21 cents will be a good price to load. Expecting it to reach 23 cents soon, before breaking upwards to reach next resistance at 30 cents.

STI Updates

I have a new updated count. This count assumes that we started from Mar 09.



Instead of the traditional A-B-C labelling, I'm now labelling this corrective wave as a double zigzag, of A-B-C-X-A-B-C. My reason for doing so is from the observation of the bollinger band standard deviation plots, the GMMA, and the MACD. Notice how these indicator changes in tandem with the pink lines (or wave counts)?

Taking a deeper look, we see an ascending triangle in play in 2nd B. This likely signifies further upside to come, which will likely result in a expected 2nd C wave. This C wave could possibly bring us to near STI 2960 to 3000 level.

The ascending triangle is also observed on the RSI. A symmetrical triangle (which is nearer to an ascending triangle pattern) is also observed on the Stochastics.

Let's see how this plays out...

Interesting Insight from OCBC

REGIONAL MACRO PULSE: Another jobless recovery for the US?

• Easing layoffs amid still-high jobless rate. Although the pace of layoffs has subsided from the peak as more signs of economic stabilisation emerge, we expect the US unemployment rate to continue rising in the coming months and only recede gradually when the recovery takes hold. There are now widespread fears that the nascent economic recovery will be another jobless one.
• When will it end? Jobless recoveries were seen after the 1990-91 and 2001 recessions when payrolls languished even after the recessions ended. It took between 23 and 39 months before the labour market returned to normal. As such, we foresee that the unemployment rate will remain elevated for some time even if the unemployment rate peaks in 2H2010 or in early 2011. As the current recession was preceded by a deep financial crisis, the jobless recovery could last much longer than expected, probably at least 45 months.

STI Updates (Contrarian)

Like Elliott Wave International mentioned in their short term updates, it's a headache trying to count the waves for Singapore. Indeed, my counts has changed many times.

Many traders in forum are getting rather bearish now. So have I in my previous posts. In fact, there are forumers who mentioned a top has been formed.

Thus in this post, I'm offering an alternative more bullish viewpoint, without much counting of this corrective wave, which could be complex in nature.

Noticed that two different ascending triangles has been formed in the short and short-short term. What this signifies, we will only be able to tell in hindsight in a few months time. However, in Elliott Wave theory, triangles are for corrective waves, and thus signifies a continuation of the previous trend. Putting it in current words, the bull is yet to end.

In the shorter term ascending triangle, we could probably expect a 3-3-3-3 5-waves corrective wave as shown by the red arrows. In this count, we could have likely touched a bottom today, and tomorrow shall be green.

Let's add on a possibility. Sep's close is coming. Could there be window dressing as well? Rewind backwards to 2007 September. The market was rising and rising, and finally topped on 10th Oct 2007, 10 days after the supposedly windows dressing close date of 30th Sep. Could this repeat?


Let's see how it goes. STI is getting more and more volatile, and more and more interesting. One thing looks to be almost for sure... With the Bollinger Band closing up, we might be seeing a huge movement for STI pretty soon...

Someone asked me why I load MIIF

Someone in forum asked me why I still load MIIF and plan to load more CitySpring even though my counts show that a top is imminent.

Other than the 3 reasons provided earlier, namely

1) Corrective waves could be complex. This is expected to be a corrective wave at the primary level right? It could well be an A-B-C-X-A-B-C or a A-B-C-D-E triangle... You never know if Primary B decides to extend and form an expanded flat to retouch 3900. Don't put the cart before the horse...

2) Impulse waves of C could have extensions too.

3) Although Elliott waves of different indexes do tend to move in tandem, there's no rule that state that they must do so.

Pre-empting the market too early?

I don't really understand why people attempt to pre-empt the market with Elliott waves when the waves are not near completion. Why jump so fast to short?

Reasons:
1) Corrective waves could be complex. This is expected to be a corrective wave at the primary level right? It could well be an A-B-C-X-A-B-C or a A-B-C-D-E triangle...

2) Impulse waves of C could have extensions too.

3) Although Elliott waves of different indexes do tend to move in tandem, there's no rule that state that they must do so.

I read somewhere, the cure to negative divergences could be even higher prices... I thought trading is about buy high sell higer, or sell lower buy lower... Hmmm....


Well, I'm still new and noob at trading. Am I missing something out?

Quick Portfolio Update

Sold Fuxing at 0.12 for 20% gain (now 0.16 :( )
Bought Starhill Global Reit at 0.54 (now 0.61)

Also, I added an extra 16 lots of Macquarie International Infrastructure Fund into my portfolio today, leaving me with a total of 32 lots at average 0.352. With this loading, my opportunity funds have reduced to about 15k at the moment. However, my monthly dividends amount is now about $450 after taking into account 6 subscribed rights for CitySpring.

I have also shifted some funds to subscribe for CitySpring rights (6) + 12 excess rights. Results should be out soon; let's hope I can get more excess rights.


With my expectations that a top is close, I will likely look out for pennies or defensive dividend stocks which don't move much for long term dividend plays.

Meanwhile, I shall accumulate more cash from tuition and work. More dividends and AWS (2 mths) are coming this Dec 09, so I shall have more cash by then to get ready.

Lastly, I'm expecting my Adsense amount to finally reach 100 USD by Dec 09 (hopefully). So perhaps I shall be receiving another 100 usd from there soon :) Let's see how it goes.

STI Updates

Quick update:

My counts have been revised after yesterday's price actions. Elliott Wave International's original count now seems wrong as well, and they have revised it.

Instead of an extended wave 2 which seems weird to me at first, it could well be a 5th wave before a crash.

This is in expectations and in line with my own primary count.

When both primary count and alternate count reflects the same conclusion, it's indeed time to be careful. Be very very careful. Furthermore, multiple divergences have been seen as well.

It could be likely that this last rally is for the 3rd quarter's window dressing. October would be an ugly month. I will be selling my Unit Trust (First State Dividend Advantage) within these few days...



Will post one more chart tonight to reflect this.

STI Updates

For this count, I will take Elliott Wave International's wave 2 expectations into the count, which is quite bullish. This forms my alternate count:



Wave 1: 8th Jul 09 ~ 4th Aug 09 (20 trading days)

Wave 2:
A: 4th Aug - 19th Aug (11 trading days)
B: 19th Aug - 10th Sep (17 trading days = 1.618 * 11)
C: 10th Sep ~ ???

From guidelines:
==> The time taken by Wave B is generally between 61.8% and 161.8% of Wave A.
==> The time taken by Wave C is generally between 61.8% of Wave 1 to 161.8% of the shortest of Waves A and B.

So, C is about 12.3 days to 17.8 days
That means, the end of C to reach between 28th Sep to 6th Oct.


Again, let's break C into 5 waves, where wave i has completed.
i: 2707 ~ 2631 (76 points) [3 days]
ii: 2631 ~ 2699 (68 points = 90% of i) [4 days]

Where will wave iii bring us? Hmm....

And if this count is true, we will be seeing an expanded flat of intermediate wave degree, with subwaves A, B, and C at minor degree.

However, I'm a little unsure because minor wave 2 seems to be longer than intermediate wave B... And I'm not sure if this is allowed.


However, in summary, for short term, STI is going down. At least to 2522 region.


This differs a little from my count below which I expect 1 last rally.

STI Updates

Let's discount Elliott Wave International's wave count for the moment:

The 2 most possible counts I think are

(i) Ending Diagonal
(ii) Normal 3 wave rally



Ending Diagonal
My original chart (not updated) that was plotted a few days ago:


Do take note that because this is the 5th of 5th of 5th of some bigger wave, it could possibly be a truncated or weak 5th wave. Hence, 2740 might not be reached.


Normal 3 wave impulse
My original chart (not updated) that was plotted a few days ago:


If we consider this more bullish scenario, we could possibly be in wave 3 of 3 of 5.
However, it doesn't feel like a wave 3 at the moment.


Lastly, let's take into account my older count which is similar to EWI's count and posted yesterday:

In this case, an expanded flat might occur, and after that, much more upside to go. Again, like the chart before, it doesn't feel like a wave 3 at the moment.

However, are waves and things really that simple? Or did I just think too much? I have to wait for more waves to unfold before seeing again.

Meanwhile, I will still hold on to my remaining holdings.

STI Updates

It's Elliott Wave International freeweek this week! ANd Club EWI subscribers have one week free access to their short term updates!

So I happily clicked and checked on their latest count for Singapore. Guess what? Their count is the same as what I had posted a month ago before I revised

http://wealthbuch.blogspot.com/2009/08/sti-correction-or-start-of-decline.html



It does appear that we have more upside to go then, i.e. wave iii of C might be beginning.
2900 a possibility? Let's see :)

Meanwhile, I sold Fuxing at 0.12 the day before, then see it rise to day to 0.15..... :(
Well, it's too bad.


Guess I have so much more to learn. I'm lucky to be "paying" school fees via lost earnings, and not lost money.

A little story on Mr. Market

This is the era where many many people are now financially aware because of books like rich dad poor dad, because of Adam Khoo's types of books, because of so many new finance books popping up here and there...

And with the advance of internet technologies, coupled with online brokerages which charge lower commissions, more and more people are being lured to equities, properties.... Greed drives their buying, and all became victims of the Greater Fool's Theory.

So what happened? Equities rise and rise, and everyone becomes happier and happier. You sell to me, I buy from you, etc, and the price goes higher. But all these are gains without work! Gains without any productivity! Gains that do not contribute much to the increase in GDP!

Sooner or later, the dream will burst. I.e. Oct 2007. Many dreams were shattered. But there are still newbies like me who just got financially aware as well, jumping into the bandwagon. IT'S VERY CHEAP NOW, we would shout, and jump in to catch..... a falling knife...

Panic of all panics! The market goes lower. Bums like me hold on. Others, having read and decide to apply TA (halfway), sell off their holdings during March in expectations that they can buy back lower at a later price. Some included shorts to help earn back lost capital. Why not? They say. Trade the trend! It's a downtrend!

Yet, Mr. Market heard them. The market rose against all odds, again and again. Load more shorts! Short every peak! Market will come down again! Mr. Market knows it and move higher, grinning evilly at these newbies as they pay him more and more.

It's a new bull MARKET!!!!! Don't SHORT! BUY! BUY BUY! Buy high, sell higher! Everyone started putting their remaining cash to long. Mr. Market smiles encouragingly, and climbed higher as a enticement for them to buy even more and regret selling early. But... the economy has yet to return to full recovery. There are still many potential problems with the massive amount of printed money. Don't care! Trade the trend! It's an uptrend! STI WILL GO TO 3000 and beyond!

STI rose and rose. RECESSION IS OVER! BERNANKE SAYS SO! BUY NOW!!! STOCKS ARE STILL CHEAP!!! And the buying continues.

What will happen next? We have to watch over the next few months.

Starhill Global TA

Starhill Global owns roughly 70% of Wisma Atria and 30% of Ngee Ann City. Not a bad REIT to have, and fundamentally good to me because of it's prime district. However, I'm still a little uncomfortable to hold it at this stage of the rally. The reason I bought it is because of TA.




Note that Starhill broke up of the ascending triangle today. How much it would move, I'm not sure. But I'm starting to liquidate positions and lighten load for certain stocks at the moment, given the stage of bear rally which I believe STI to be in.

STI Elliott Wave 3rd possibility

Another possibility that I have. The first two are for a standard 5 waves up leading to 2850, and an ascending triangle that signifies more upside to come.

This 3rd possibility is a chart in which I made use of CNA Market Talk Thrillseeker's secret system in calculating the possible maximum for STI.




In this scenario, the wave 5 of 5 of this correction (Maj A only?) is in an ending diagonal of 3-3-3-3-3.

Classical Ending Diagonal:


For ending diagonals, from page 36 of Frost & Prechter's Elliott Wave Principle:

A special type of wave that occurs primarily in the fifth wave position at times when the preceding move has "gone too fast," as Elliott put it. The illustration above shows an ending diagonal triangle in its typical position in larger impulse waves, though a very small percentage are also found in the "C" wave position of A-B-C corrective formations. In either case, they are found at the termination points of larger patterns, indicating exhaustion of the larger movement. A rising diagonal is bearish and is usually followed by a sharp decline retracing at least back to the level where it began.

For this pattern to be wrong, STI will have to go below 2560.

These 3 possibilities show one thing: There might be still some leg for this bullish uptrend. However, the end seems near, and it would be wise not to enter at this juncture for long term investments.

The trend is your friend!

This is written after reading the Jul 09 edition of Technical Analysis of Stocks & Commodities.

The old saying that the trend is your friend is important for every trader. A trend reversal does not occur immediately with the blink of an eye. In most cases, a trend slows down and stops before reversing; a pause occurs in its movement as a transition period, after which the trend continues or reverses.

During the transition, certain price formations/chart patterns emerges. These reflect mas psychology of the people playing the market. And since they are based on human psychology which does not change much over the years, we could predict with reasonable probability.

1) The condition of any model is the existence of the previous trend.
The previous trend is an important requirement for a model/chart pattern/price formation. You need to know the trend before being able to determine whether a reversal or a continuation would occur. If there were no trends, or if you could not identify any trend, then any possible price formations/chart patterns could likely be a false alarm. So, to be able to differentiate models, one of the key thing to know is to be thorough in your knowledge of areas within a trend structure.

2) The first signal of the oncoming reversal in the existing trend is often a breakthrough of an important trendline.
The breakthrough of the downward trendline by EW International in Mar shows the reversal that led to the multi-month rally till now. However, the breaking of the main trendline does not always signify a trend reversal. It's probably just a change in trend dynamics. Whther it will turn out to be a reversal or price consolidation will only become clear on hindsight. Of course, breakthroughs could mean completion of a price model formation as well (Head and Shoulders, double top, double bottom, etc).

3) The larger the model, the more significant the following movement.
"Larger" refers to the height, the width, the extent, of the price model. Height is proportional to the volatility of the price movements, while width represents the time duration the model took to complete or form. The longer it takes for the pattern to be formed, the more important the movement, and the more significant and powerful the following price patterns and movements.

4) A price breakthrough must be strong and vigorous.
In other words, the price should literally "fly" through the trendline, breaking it like a piece of tofu. Not hesitate around it.

I made a small mistake in selling UOB as soon as STI broke through my main trendline weakly. Indeed, STI rose and pushed itself into the trendline again after a few days.

5) Increased volume at breakthrough indicates movement.
Increases in market volume shows interest of market participants. More and more want to enter (or exit). The rule of the thumb is, volume should rise in the direction of the current price trend. In an upwards breakthrough, volume should increase as price increases, whereas in a downwards breakthrough, volume should increase as price decreases.


These classical form of technical analysis should help in determining the trends, trends reversal, or Elliott Waves. With a strong knowledge in different forms of analysis (including candlesticks and fibonacci), one can count with reasonable accuracy the waves and predict with even greater probability the subsequent price movements.

Another possible elliott count

Could this only be a correction that STI is going through?
The following was plot in a log scale



Example of a horizontal triangle for ascending triangle.



Much as I would like downside to come as I have more spare cash as compared to last time, it seems like STI still has some upside to go.

Let's watch as the waves unfold :)

STI Elliott Wave Update

Supposed it is not an elongated flat (likely not now as STI seems poised to go way past 2.618 times of wave A)

Then we would likely still be in Int A of Pri B in a 5 wave structure. The rally has been underestimated.

Let's look back to the original 'wave C count' and treat it as a wave A of Pri B



With Dow's rally (+77 now) tonight, the final part of the count is updated.




Be it Int A or Int C at this point, it seems likely that we are on our 3rd of 5th of 5th wave.
The final count:
wave i: 2522 ~ 2667
wave ii: 2667 ~ 2560
wave iii: 2560 ~ 2795? (1.618 of wave i, might be longer)
wave iv: 2795 ~ 2705 (0.382 of wave iii)
wave v: 2705 ~ 2850 (equals wave i)


I'm for the view it's at the 5th wave now because of momentum divergences seem around.



From wiki,

Wave five is the final leg in the direction of the dominant trend. The news is almost universally positive and everyone is bullish. Unfortunately, this is when many average investors finally buy in, right before the top. Volume is lower in wave five than in wave three, and many momentum indicators start to show divergences (prices reach a new high, the indicator does not reach a new peak). At the end of a major bull market, bears may very well be ridiculed (recall how forecasts for a top in the stock market during 2000 were received).

With this analysis, it's a small pity I sold my UOB too early at 16.92. But well, trading is about money management, and the price of UOB is about 18% of my total assets... A lot more to learn about emotions control and discipline in addition to money management :) It's considered a cheap lesson, considering that the price paid is only possible forgone earnings...

Bloomberg News Summary from EW International

Asian stocks are due for their “largest correction” since rallying from their March lows as the region’s major indexes complete “intermediate tops,” according to Elliott Wave International Inc.

The benchmark MSCI Asia Pacific Index has climbed 62 percent from a more than five-year low on March 9 on speculation stimulus packages and lower borrowing costs will revive the global economy.

Australia’s S&P/ASX 200 Index looks “bearish” because it has advanced for three-consecutive waves, according to Elliot Wave International’s monthly Asian-Pacific Financial Forecast report released on Aug. 28. “That puts it most at risk of a deep retracement.”

China’s Shanghai Composite Index and South Korea’s Kospi Index are “breaking down,” according to the research company. The Chinese gauge was the world’s best-performing major index until it peaked at 3,478 on Aug. 4, after a five-wave rally that began in October. The weakness in the Kosdaq index signals a decline in the broader market, it added.

“When secondary indexes weaken, it often signals that the market’s speculative ‘animal spirits’ are waning,” Elliot Wave International said in its monthly Asian-Pacific Financial Forecast report. As in South Korea, a similar trend is developing in China where the Shenzhen Small and Medium Enterprises Index has fallen below the “lower channel line.”

My Updated Count for STI

After many confusions, and after learning more, I have decided to go in and count the sub-waves. This is my more in-depth count for STI, after having spent most of my afternoon today counting and thinking and researching.

I'm of the opinion now that for Straits Times Index, we could be likely be in a 3-3-5 expanded flat correction, or as dotz from CNA forum puts it, an elongated flat correction.

The charts are as follows (more will be added later):


Nov 08 ~ Jan 09 : Wave A


Jan 09 ~ Mar 09 : Wave B


Mar 09 ~ Sep 09 : Wave C


As I learn more about the secrets of Elliott Wave, it appears that my earlier counts were wrong wrong wrong :(

It appears now that this correction wave started from Nov 08 in a 3-3-5 correction. The only thing left to verify is whether this is wave 4 of Pri A, or is it already Pri B.

From the most recent price action on 7th Sep, there seems to be more chance that the 3rd wave of minor 5 of int C of Pri B is beginning. Let's say it's 1.618 times of wave 1, then we would see 2794 ~ 2800 for STI. Only thing is... It doesn't seem very probable at the moment...

Shall see how the waves unfold as the week goes.

Update: I just saw Elliott Wave International's Free April Report. It appears that their correction wave started in Mar 09 instead of Nov 08 as my above count. Theirs is in the log scale.

Shall look more into it soon.

Careful About China Hongxing

Using Elliott wave counting, it appears that Hongxing is at the last stage of the rally.

Also, RSI is in the overbought region.



Expect Hongxing to come down soon.
Be careful if you are still long-ing.

The Reason I sold UOB today

Ok, I probably could have waited till tomorrow on hindsight to sell, seeing that Dow is green at the moment.

UOB was a punt which I got lucky and managed to sell at 16.92, a small profit of $120 after getting $200 dividends. Sure, it might go higher, and I have missed the selling price at 17.30. But see it another way, that money wasn't really mine to begin with; a punt is a punt.


My Elliott Wave Counts were still rather bullish, but I'm still having this feeling that it might be wrong. The main reason which triggered me to sell was that STI went below my support line (since Mar 09) at 2598, and didn't managed to recover it.




Zoom in on recent data:


Note that the volume today was slightly higher than the previous few days

It could be likely that STI would turn this support into resistance. The first resistance for tomorrow would be the 2606 region, and first trendline support would be 2550 (not charted in).

There seems a need to recount the waves now... Will do that tomorrow... Already sleepy...


I could be wrong, but so be it. As long as there's profit for a punt that started without much basis, it's ok.

Shanghai Index Elliott Wave Count

Could this be the wave count for SSE?

I'm not an expert, but I just spent 3 hours trying to count:



If the count is correct, it could be the only hope left for bulls....


I have only 4 hours left to waking up... Better sleep

Expecting SSE to still correct tomorrow...