Tuesday, September 29, 2009

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.

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