Monday, October 5, 2009

STI Elliott Wave Updates

My preferred count so far since the start of the crisis:

From 3906,
5 waves down:
1: 3906 ~ 2746 (10th Oct 07 ~ 17 Mar 08: 5 months)
2: 2746 ~ 3267 (17 Mar 08 ~ 7th May 08: 2 months)
3: 3267 ~ 1474 (7th May 08 ~ 28 Oct 08: 6 months)
4: 1474 ~ 1960 (28 Oct 08 ~ 7th Jan 09: 2 months)
5: 1960 ~ 1455 (7th Jan 09 ~ 10th Mar 09: 2 months)

3 waves up:
A: 1455 ~ 2424 (10th Mar 09 ~ 2nd Jun 09: 3 months)
B: 2424 ~ 2212 (2nd Jun 09 ~ 23 Jun 09: 0.67 months)
C: 2212 ~ 2700??? ====> waiting for hindsight confirmation...

For wave C, the previous post was a possible count. Following on is a second count:
In this count, it looks more likely to be a failed 5th wave on 23rd Sep 09 which ended at 2699 after the ascending triangle breakdown, and equals the 3 months time frame for intermediate A...

The reason why I keep at least 2 counts is because I'm currently unsure of the market. Also, STI is still ranged between 2522 and 2700 at the moment. STI's flattish behaviour seems to have the personality and characteristic of a 4th wave.

However, the fact is, both wave counts now point to a 5 waves down.
Recapping on waves 4 and 5 from wiki
Wave 4: Wave four is typically clearly corrective. Prices may meander sideways for an extended period, and wave four typically retraces less than 38.2% of wave three. Volume is well below than that of wave three. This is a good place to buy a pull back if you understand the potential ahead for wave 5. Still, the most distinguishing feature of fourth waves is that they often prove very difficult to count.

Wave 5: 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).
Both wave counts that I have now fits the above criteria. In the earlier one where a flat is expected, 38.2% retracement is at 2526, and the flat was predicted to reach 2522. STI is also flattish, and the prices are meandering sideways. In addition, the breakdown of the ascending triangle was not coupled with super high volume. This might signify a false break down, and hence still lending hope to bulls that wave 4 has not ended yet... Merely a flat...

In the count in this post, momentum indicators are showing divergences. Average investors (like me) are indeed buying in. Bears are also ridiculed.

Whether Primary B has ended remains in hindsight. I do need to learn more... Be it FA or TA, insufficient knowledge can always kill.


  1. Hi, I really like your analysis especially the Elliott Wave. Keep it up.. Nice work!

  2. Hi Slash,

    thanks for visiting! :)


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