Tuesday, October 27, 2009

STI Updates

Straits Times Index is getting harder and harder to understand... :(

Let's refer to the book Elliott Wave Principle: Key to Market Behaviour

In chapter 1, this paragraph is interesting:
A triangle always occur in the position prior to the final actionary wave in the pattern of one larger degree, i.e. wave four of an impulse, wave B of A-B-C, or final wave X in double or triple zig-zag or combination.
The following paragraph also presents interesting information:
In the stock market, when a triangle occurs in the fourth wave position, wave five is sometimes swift and travels approximately the distance of the widest part of the triangle.
In my earlier wave count, the fourth wave was part of an ascending triangle. The first quoted paragraph should 'prove' the count right at the moment.

The second paragraph adds on information on where the 5th wave is likely to end. The widest part of my triangle is 2700.78 - 2521.36 = 179.42. Supposed the 5th wave is the same distance, starting at 2576.84, it would be 2756.26. By trendline, 2790 is expected, which is quite close.

Earlier on, I mentioned that momentum divergences are common in 5th waves. Right now, triangles only occur in the final actionary wave. All these are telling me that my counts should be right, and that the 5th wave is indeed in action. The end might be coming soon.

However, there still likely some room for a little more upside. Based on Gann Hi-Lo Indicator, STI remains as bullish. Also, a short term morning star with confirmation (weak) was observed on STI over the last 4 days. Although Dow Jones is in the red now, STI might surprise with a green day tomorrow by close. However, this might be wrong as I didn't have the time to monitor the daily chart for counting.

Caveat emptor and good luck trading.


  1. Hi Wealth Buch,

    I refer to the first line of your post.

    If STI was so easy to grasp, there would be many more millionaires by now than the current number. :)


  2. Hi Musicwhiz,

    Both technicals and fundamentals are equally hard to grasp. Elliott Waves are very interesting in the sense that it goes line in line with socionomics.

    I'm too new at wave counting, so I might be wrong here and there. Wave counts gives a good idea on the maturity of the current trend.

    Lastly, I guess I failed to clarify (so sorry :( ) that it is getting harder because we are approaching the end of the trend, which is wave 5 due to a higher occurrence of fractured waves. Either that or we are still at a mega wave 4, which also commonly makes it hard for Elliott Wave practitioners to count as well because it could be complex.


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