Tuesday, September 15, 2009

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.

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