Tuesday, November 3, 2009

STI Updates

Today's price action sort of hinted with a higher probability that the 4th wave has ended on 2605 on Thurs.

A zoom into the 4th wave of yesterday's post:

Note that for this count, wave 1 is larger than wave 3. The rules of Elliott waves state that wave 3 cannot be the shortest wave of wave 1, 3 and 5. This means that, wave 5 will be a shorter wave than wave 3, i.e. we cannot expect a smooth path upwards.

Again, posting for another time, triangles like the one above are usually corrective waves, and 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. And 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.

The calculations done and posted earlier shows 2784 as the probable end for wave 5, which coincides with 2790 on the 15 years resistance trendline. So that's my expectation of the tipping point.

Today likely marked the end of wave 2 correction at 2616 (near to 78.4% fibonacci retracement of the 2605~2676 move). In the intra-day chart, we can observe 5 motive waves and 3 corrective waves today:

Tomorrow is likely the beginning of the 3rd wave of wave 3. How it would goes, we will have to see. However, as mentioned yesterday, I'm still expecting a mini bull run to 2790 before the tipping point.

Perhaps I will have multiple chances to offload some pennies, and also to sell Singtel away for profit.

Good luck trading.


  1. Hi there,

    Yup I do not have much knowledge on EW, and would like to ask something.

    The EW uses the same theory for both the uptrend and downtrend. How do you know whether the current trend is up or down? Or when it will be reversing?

    Frankly, I'm also a little skeptical about the STI going all the way back up to its peak. However, I believe in addition to trading, people should also do value investing should also be. I.e find undervalued stocks.

    This is because the STT's largest contributors are the financial services, which means TA is mainly done on the financial services (though it impacts greatly the economy of Singapore) But if you can find potential gems in the stock market, these will prove to be multi-baggers in the long term, which is basically a long and boring wait..but should be rather safe and rewarding.

    Best regards,

  2. Hi ntuchartist,

    I used to think of finding undervalued gems and adopting a buy and hold method. Either that or do dividend investing. Both are passive form of playing.

    However, I'm starting to think that if you can catch bigger movements, or Elliott waves of larger degrees, then you would profit more than just buy and hold. It's not that hard to count the waves; I picked everything up myself from different websites.

    To determine which wave it could be, we can take a look at wave personalities. Taking from Elliottwave.com's basic tutorial on wave personality:

    "B" waves are phonies. They are sucker plays, bull traps, speculators' paradise, orgies of odd-lotter mentality or expressions of dumb institutional complacency (or both). They often involve a focus on a narrow list of stocks, are often "unconfirmed" by other averages, are rarely technically strong, and are virtually always doomed to complete retracement by wave C. If the analyst can easily say to himself, "There is something wrong with this market," chances are it's a "B" wave.

    This Pri B wave could retrace 100% of A in a possible flat, but I doubt so. Moreover, we are approaching the 15 years resistance line which had limited STI in the past. I expect a retracement around that area.

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  4. Hi JW,

    Can I ask how you get 2790?

    I drew the great bear line based on the Highs obtained in Feb 94, Feb 96, Jan 00 and May 06. It's nowhere near 2790. More like 2725 to me:



  5. Hi Jingwei,

    you might be right. Mine was merely an estimation and not as accurate as your chart.


    I estimated the points and drew the line out on chartnexus, using some key points. The accuracy is definitely not as good as your chart.

    Thanks for pointing out! It explains quite a bit of things now. :)


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