test4

Sunday, August 30, 2009

Updated Elliott Wave Count for STI

DBS's Elliott Wave count seems to have been violated with the recent rally. However, their count gave me an inspiration in an alternate recount that seems possible to me.

That is... we are still at Major A of Pri B, where Major A is a leading diagonal, where it is within a rising wedge.



Note:
Leading Diagonal are 5-3-5-3-5 waves
Ending Diagonals are 3-3-3-3-3 waves

A little graphic of a leading diagonal from Elliott Wave International:



My own graphic:




Some guidelines from CyclePro
http://www.geocities.com/WallStreet/Exchange/9807/Charts/SP500-Articles/EWRules.htm#zzrule

Diagonal Guidelines:

  • Wave 1 of a LD is usually an Impulse, but in rare cases may be a LD.
  • Wave 2 is usually ZigZag family pattern.
  • Generally Wave 2 is greater than 35% of Wave 1's gross price movement.
  • Wave 4 is commonly a Zigzag.
  • It is rare that at least either Waves 2 or 4 of an ED is not a Zigzag family pattern.
  • Generally Wave 4 is greater than 35% of Wave 3's gross price movement.
  • The end points of Waves 1 and 4 generally overlap.
  • Expect the time taken by Wave 4 to be between 20% and 5 times Wave 2.
  • Wave 5 is usually greater than Wave 4 by price.
  • It is typical for Wave 5 of a LD to end before reaching the channel line.
  • It is typical for Wave 5 of an ED to exceed the channel line.

A few things that make this doesn't look as perfect.
  1. Wave 4 did not overlap wave 1
  2. Wave 2 wasn't greater than 35% of wave 1
  3. Wave 4 wasn't greater than 35% of wave 3
However, the main factor supporting this is that such a wave commonly occurs in wave 1 of impulses or wave A of zigzags!
Also, the "dragginess" so far feels like a wave 4...

Interesting fact: Leading Diagonals were not discovered by Elliott, but by Frost and Pretcher.

If the above count is the case, we can expect this upleg (wave 5) to be the final one of Major A.
This is contrary to my earlier bullish count that we can expect a wave 3 next.

How will it play out, we will have to see. With my inexperience at counting, I guess I have to wait for more waves to unfold to unlock the "secrets".

However, regardless of the count, the next leg is likely an up. It's the magnitude of this upleg that we have to take note of.

Friday, August 28, 2009

My Thoughts on STI

As we approach September, the path will get more treacherous...
Many analysts are talking about September ~ October as the beginning of the crash... With a contrarian approach, it most likely would not be at the Sep~Oct period, and with the analysis gathered from this thread, I've 3 scenarios (which can be considered duh)

1) Downturn already started.
2) Downturn starts in Nov/Dec.
3) As with DBS's count, we have only just completed major A of Primary B (shall post a chart on it soon)


However, my EW timeframe counts fall inside that same timeframe of Sep ~ Oct, which is not a contrarian conclusion.

Primary A took 17 months (I believe from Oct to Mar, since I observed 5 waves down)... so... would primary B be that short?

The timelines are quite clear now... If Pri B is 0.382 times of Pri A, that means 6.5 months... We would see the end of Pri B by October.

Other supporting reasons would be, within Pri B,
i) Int A ended on early June (3 months)
ii) Int B ended on mid july (1.2 months, 38.2% of int A)
iii) Int C probably same time length as int A, so mid July add 3 months. That's October as well!

So to me, the timeline falls in place for me...


But I might be wrong... Many are starting to feel quite bearish now..., and looking to exit their positions, opening shorts, etc...

For people with longer time frames, it's not a good time to long now, and it's certainly too opportunistic to raise shorts.

I'm expecting a wave 3 now, but it could be a wave 5 given the news and fundamentals, so I would probably sell UOB when the end of this wave is near, but keep the dividend stocks until all is clearer...

Lastly, with so much excess cash sidelines, there's still a remote possibility that this correction might be a A-B-C-X-A-B-C correction, that means 7 waves worth (we are only at the 3rd wave), and could possibly bring STI back to 3900 or beyond, resulting in a multi-year expanded flat. "Trade the trend until it breaks": raise shorts only when the uptrend has confirmed been broken...

As Dust at CNA Forum likes to say, a trader is not a perma bull or a perma bear, but a businessman and opportunist. A pre-emptive strike is not recommended...

Thursday, August 27, 2009

STI Updates

Updates: I made a mistake yesterday. The latest date of sudden movement is 6 trading days from today, not 3. That gives the latest date at 4th September.

STI closed with a doji today. That's interesting, because combined with the previous day's white candle, a bearish doji star is formed.

A black candle tomorrow will form a bearish evening doji star.
Will this be the prelude to the subwave 2 that I'm waiting for?

Another interesting fact: STI opened at the 20 day MA for the past 2 days, and for today, it was supported by this 20 day MA. It has broken the blue downchannel resistance line yesterday. The 4D number to look out for tomorrow would be 2614, the blue support/resistance line. The next number would be 2600, the 20 day MA support. Finally, the last strong support would be at 2555, the purple support line that stretched from March 09.


Pivot calculations:
Pivot 2623.35


R1 2644.07
S1 2607.71
R2 2659.71
S2 2586.99
R3 2680.43
S3 2571.35


It would be healthy for a mini correction to occur soon before another upwave.

There's something weird about the personality of this recent correction that is nagging me, but still eluding me. Might have to wait for more waves to unfold before the secrets are revealed.

Tuesday, August 25, 2009

STI Updates

It appears that STI is going to complete 5 mini waves since 2522.

1: 2522~2570 (48 points)
2: 2570~2530 (40 points)
3: 2530~2616 (86 points)
4: 2616~2573 (43 points)
5: 2573~
......2621? (48 points) ===> Reached
......2659? (86 points)

With these 5 waves, wave 1 of minor 3 of major C should be completing soon.


Pivot calculations:

Pivot 2606.217


R1 2637.643
S1 2587.333
R2 2656.527
S2 2555.907
R3 2687.953
S3 2537.023

Trendline analysis:




STI has broken upwards of the short term red resistance line, and briefly went above the longer term light blue resistance line before coming down to rest at that line.

First trendline resistance at today's close, around 2616, and second trendline resistance fibonacci fan 2660.
Trendline support at 2595 (weak) and 2546 (strong)


Suppose STI ends mini wave 1 at 2625, we might see a mini correction soon to 2573 (50% retracement) or 2561 (61.8% retracement).

Looking at how the waves play out, STI might be heading for a small correction soon before breaking up again.

From chart, the red line and the purple line converges into a point 4 trading days later. The bollinger band (not charted) for STI is also closing up. We shall see a sudden movement soon within these 4 trading days, and by wave counting, my expectations is a sudden upwards movement. That would probably be the mini wave 3 of minor 3 of major C that I'm waiting for.

Sunday, August 23, 2009

Elliott Wave Count -- How do you know if you have the right wave count?

The article here striked this thought in me
http://www.elliottwave.com/freeupdates/archives/2008/09/03/How-Do-You-Know-If-You-Have-the-Right-Wave-Count.aspx

So how do we know if have the right count?
The following is lifted off from the website:

Here's a short-cut list of the personalities you should be looking for:

1) Impulse waves always subdivide into five distinct waves, and they have an energetic personality that likes to cover a lot of ground in a short time. That means that prices travel far in a short period of time and that the angle or slope of an impulse wave is steep.

2) Corrective wave patterns have a sluggish personality, the opposite of impulse waves. Corrective waves are slow-moving affairs that seemingly take days and weeks to end, and, during that time, price tends not to change much. Also, corrective wave patterns tend to contain numerous overlapping waves, which appear as choppy or sloppy price action.



Ok, that seems pretty normal and without much details. What strikes me most was the sentence that "each Elliott wave has a distinct personality, and personality supports labeling."

Example, wave 2 are often deep, and typically end on low volume, and typically retrace 0.382 of wave 1. So if we see a wave that retraces about 0.382 of the previous wave, yet ends on high volume, it is more likely an A-B-C count than a 1-2-3 count. It is the personality of the waves that count.

Another example... wave 4 usually meanders sideways for an extended period, with volume well below that of wave 3...


Guess I need to research more and pay more attention to the personality types of each individual waves... The alternate count recently released by DBS seems to hold some weight, although it appears to be different from the wave counts of Robert Pretcher, head of Elliott Wave International... It seems to me that Pretcher is at wave C now, not wave A as counted by DBS...

So much more to learn :(


Update: I just realised there's a section on wave personality in Elliott Wave International's Lesson 7. Going to learn more about it :)

A nice diagram from Elliott Wave International:

Friday, August 21, 2009

STI - Bullish Harami observed

The following is taken from http://www.candlesticker.com/Cs29.asp

Recognition Criteria:

1. The market is in a bearish mood characterized by downtrend.
2. Then we see a long black candlestick.
3. We see a white candlestick on the following day where the small white real body is completely engulfed by the real body of the first day. The shadows (high/low) of the second candlestick are not necessarily contained within the first body, however it's preferable if they are.

Explanation:

The Bullish Harami Pattern is a sign of disparity about the market’s health. While the market is characterized by downtrend and bearish mood; there is heavy selling reflected by a long, black real body however it is followed by a small white body in the next day. This may signal a trend reversal since the second day’s small real body shows that the bearish power is diminishing.

----------------------------------------------------------------------------------------------

This candlestick formation, coupled with the calculations yesterday that 2522 might be the lowest point in my wave count, and together with STI approaching the support line that starts from Mar 09, leads me to really believe that i of 3 of C has begun yesterday. To me, my preferred wave count is still valid until it breaks.

An important thing to note is that such a formation does not guarantee a bullish reversal. A confirmation white candle is still needed tomorrow. However, I expect gap resistance between 2591 and 2610.

STI daily Pivot point for tomorrow:
Pivot 2551.93


R1 2573.87
S1 2538.03
R2 2587.77
S2 2516.09
R3 2609.71
S3 2502.19


R2 and R3 comes close to 2591 and 2610 as well.
Furthermore, there's also resistance at 2614 and 2622 by trendline analysis, as you can see from the charts 2 days ago.

STI will really need lots of strength to break this region (2590 ~ 2620, which is +30 to +60) tomorrow. However, the sentiments doesn't seem to be able to supply that required amount of strength.

STI might attempt to hit the region tomorrow before coming down again. Shall see how it goes :)

Thursday, August 20, 2009

STI Falling Wedge?

Instead of the descending triangle described yesterday, the lower low today made it seems like a falling wedge (too tired to chart today after IPPT)

Monday's target is still on track for an a-b-c correction

Sub a: 2700 ~ 2542
Sub b: 2542 ~ 2631
Sub c: 2631 ~
.......................2522?
.......................2467?
.......................2412?


STI managed to hit 2522 today. To me, this is the most likely target because we are near the support line that stemmed from March 09.

Tomorrow might be the commencement of wave 3. STI has bounced of the multi-resistance line on 5th August at 2700, and trend along to find another path of lesser resistance to advance further.



Pivot calculations for tomorrow:
Pivot 2540.083


R1 2558.787
S1 2504.077
R2 2594.793
S2 2485.373
R3 2613.497
S3 2449.367



How much will the rise be for tomorrow? It's anyone guess.

I better go sleep soon... Tired out after my IPPT silver achievement today ;)



Wednesday, August 19, 2009

STI update (Correction?)

Could STI be undergoing a complex correction as shown (zooming in on yesterday's chart):



This is in line with this:

which is a 3-3-3-3-3 correction.

Why I say so? Because, it appears that 3-3-3 have been observed so far.
This is just a hunch. It's interesting to watch how this will unfold further :)

For the descending triangle to remain valid, 2530 cannot be broken tomorrow.
We might see 2620 soon as resistance.


Pivot calculations for tomorrow:
Pivot 2557.01


R1 2581.3
S1 2543.43
R2 2594.88
S2 2519.14
R3 2619.17
S3 2505.56



Time to sleep. IPPT tomorrow.

Tuesday, August 18, 2009

STI - A correction or the start of the decline?

Nice 85 points drop today by STI.
But the million dollar question is, is this the start of the decline? Or is it just a mild correction?
I believe we might be in an a-b-c correction, and have reverted back to my most wave bullish count.

Sub a: 2700 ~ 2542
Sub b: 2542 ~ 2631
Sub c: 2631 ~
.......................2522?
.......................2467?
.......................2412?

It's whether it's first wave of impulsive down-trend or continuation of up-trend which is the hardest to identify... I'm with the latter so far... But I won't deny I might highly likely be wrong... and we might well be in wave 3 downwards. That means, a scary down-wave is coming.

Why I still think there might be further upside potential is due to time-line of waves. Where I labelled waves 2, 4, and B, the correction was about 7 to 9 days... Today is the 9th trading day since 2700 on 5th August....
STI could well be this:




Another Updated chart:




The next support is the green line that is plotted, a support since March. Tomorrow, we might likely see support at 2500 to 2522 region, 2500 being the green line support, and 2522 being 38.2% wave 2 retracement of my counted elliott wave 1.



Next, for calculations of the pivot point, for tomorrow:
Pivot 2561.06


R1 2576.63
S1 2530.41
R2 2607.28
S2 2514.84
R3 2622.85
S3 2484.19

Noticed that 2530 and 2514 is seen as well.
2530 is also the first pivot support for weekly, and 2518 the pivot for monthly.

In addition, 2500, a nice round number, would likely be a psychological support as well.


Hence, I expect that the lowest for this correction could be about 2500 before the next leg up.
It's certainly getting more dangerous to long stocks at the moment. Must trade with care.

Monday, August 17, 2009

STI Pivot Points Calculations

This is perhaps the easiest method since it's purely by plugging numbers into the excel sheet.

From dailies, the pivot resistance for tomorrow is
Pivot 2629.78


R1 2649.37
S1 2611.92
R2 2667.23
S2 2592.33
R3 2686.82
S3 2574.47


My attempts and experiment: on using pivot resistances on the weekly and monthly charts as well:

Weekly
Pivot 2614.383


R1 2664.767
S1 2581.127
R2 2698.023
S2 2530.743
R3 2748.407
S3 2497.487


Monthly
Pivot 2518.033


R1 2800.617
S1 2376.617
R2 2942.033
S2 2094.033
R3 3224.617
S3 1952.617


Shall see and observe if pivot calculations can be used in all 3 different time frames.

Sunday, August 16, 2009

Personal Goals

Goal setting is something very important. It gives one direction, vision, and clarity on which pathway to proceed when at a crossroad. Being able to set realistic goals (ok, maybe slightly tougher than realistic) is an extremely ingredient to achieve financial freedom. One of the aims of this blog is to help myself pen down thoughts, set goals, evaluate myself, and constantly remind myself of my goals.


Before starting this blog, I had set myself at the start of 2009 some personal goals. I shall recap some, and give some comments.

1) Goal of matching my full-time engineer (fresh grad) pay with my tuition income
Comments: Well, I graduated in May 2008. Target achieved. I managed to earn tuition ang pow money of average twice my post CPF engineer pay between May to now.

Target exceeded :)

Portfolio

Ok, this is where I shall update my portfolio ocassionally, especially when there are major changes.

My style:
Some funds allocated to dividends investing.
Some funds allocated to more growth investing.
Some funds allocated to trading.

At the moment, my portfolio is as follows:

My dividend portfolio:


MIIF had lower dividends this time round, but from the analysis of grandmaster89 from Market Talk forum, I'm convinced that it will recover in due time.

CitySpring is issuing rights, 1 for 1 at 48 cents. I will subscribe for it plus excess rights. My dividend yield would drop, but as long as it is above the 6~7% region, I'm fine with it.


My investing/growth portfolio:


I had made a mistake selling 1 lot of Capitaland too early at $3.50.
:(


My trading portfolio:


This portfolio will always appear as the worst performing portfolio, simply because those with high profits, yet high risks of losing them, have already been sold.

Cosco was the first stock I bought. The very day I bought it, the CEO stepped down. Needless to say, it remained red till now.

I haven't been too successful in trading at the moment. Shall try to learn and understand more.



Unit Trust bought before beginning to learn trading/investing in equities:
First State Dividend Advantage (Cost: $4500)
DWS Global Inflation Buster (Cost: $1000)


In a nutshell, the cost of my total portfolio stands at $80290, with about $5.3k in MMF waiting for further opportunities should any arises. This is however rather insufficient because of my plans to apply for excess rights for CitySpring. Hopefully, I will be able to earn more from tuition and salary before the day to subscribe for the rights.

With DWS Global Inflation Buster shutting down, and having profit about 50 bucks, I will most likely redeem the unit trust to free up 1k more.

Friday, August 14, 2009

UOB possible movements?

Just a hunch for possible price movements for UOB:





A possible symmetrical triangle? Might not happen, but it might.

What's still positive is that the 20 day moving average is supporting the price well. RSI has come down to 56% and stochastics are showing possible crossover.

Furthermore, the bollinger bands appear to be closing up, signifying a sudden price movement might be in the horizons...

Interesting, isn't it?

STI Updates

STI continues to appear to have a tendency to gravitate towards intersection points of resistances.




We can see from today's price action that touched two different resistance lines, one a 5 months uptrend line, the other a 100 week downtrend line.

If STI opens above 2618, then it will likely trade between 2618 to 2628. However, depending on the performance DOW tonight, downside is expected, i.e. STI to trade below 2618 tomorrow.

Let's see if STI will gravitate towards the point shaded in blue.


As for the basic pivot calculations,

Pivot 2616.603


R1 2630.157
S1 2600.627
R2 2646.133
S2 2587.073
R3 2659.687
S3 2571.097

Coupled with trendlines, we could probably expect STI to hover at around 2618 tomorrow.

The market is getting more and more uncertain. Shall wait for tomorrow morning to see the performance of DOW to decide.

I sense a symmetrical triangle in play on DOW's hourly chart, which will likely signify further uptrend in the short run.

MacQuarie International Infrastructure Fund

The following is taken from grandmaster89 from CNA Market Talk forum. He attended the AGM and posted his opinion, as follows:

****************************************************
Current Infastructure Business Sector Outlook

Infrastructure businesses have long life-spans and a regular cashflow. They often have very large debts which are hedged against their regular cashflow. They pay large dividends to their shareholders based on the net income derived from –> cashflow – interest income. Currently, most infrastructure companies are still performing well in terms of operating cash flow and profits. The recession has not hampered their cash-generating ability in any significant way. The problem lies with their debts and refinancing issues in light of the credit crunch. Currently virtually all banks in Europe are unwilling to lend out large sums of money to any form of businesses no matter how high they are willing to pay for the interest. As a result, even though refinancing is far away, they cannot expect to get another loan from their lender. So they are left with 3 options – a) ignore the problem till refinancing occurs in 3-5 years time, b) solve the problem immediately with capital injection via a rights issue or c) use all free cashflow to pay down the debt (zero dividends). Most businesses are now trending towards the third option. So we are now left with good companies with excellent cashflow but poor dividends for the next 3 years. Asian-wise, the credit crunch has not affected Asian companies. There is much liquidity in Taiwan and China.

MIIF Policy of Debt

MIIF CEO John Stuart believes that since MIIF is an equity based company, she shouldn’t be using debt to pay dividends or buy assets. A leveraged fund is not what MIIF intends to be. As such, MIIF intends to reduce her corporate debts to near zero by 2011. Mr Stuart says the net debt level of 20mil will slowly be reduced till zero at 2011. The credit facilities will only be used as bridging loans or to facilitate the payment of dividends due to the timing differences of some distributions. These sorts of debts will be repaid within the year itself. Mr Stuart argues that being an un-leveraged fund, MIIF will be very attractive to investors and it might prop up the share price. Moreover Mr Stuart doesn’t believe in rights issues unless it is for growth. But even then, it shouldn’t be used needlessly since it dilutes shareholders value

MIIF Assets

Arqiva – Here is the biggest surprise for our largest asset. Arqiva holds around 2.7bil of debt and it intends to draw a further 500mil for its capex. John Stuart says this debt is unsustainable in the current economic climate. Due to a change of shareholders, the decision to pay a dividend will be made in Sept 09 after the board meeting. The board will decide on which of the 3 options will it take to reduce debts. Since Arqiva revenue and profit is growing, Mr Stuart believes that Arqiva will elect the third option and there will no distributions for the next 3 years. Currently, if there is an offer to buy Arqiva, Mr Stuart will recommend a sale to MIIF shareholders during the vote. We must wait for the Sept meeting before its position will be clear. Mr Stuart says the new largest shareholder Canadian Pension Fund has very deep pockets and was only interest in MCG for their stake in Arqiva. If they decide to pay down Arqiva debts in exchange for shares, this problem might be solved.

MEIF – Same story as Arqiva. Some of her assets will not be distributing income in the short term. As a result, her distribution to MIIF will be sharply reduced for this year. Only Thames had managed to get refinancing from her lenders. Mr Stuart said that MIIF was in the process of selling MEIF (and using the funds to buy Asian assets) in June 08 but the credit crunch derailed those plans. On another note, due to MIIF investment in MEIF, there is a 3 million dollar rebate on the management fees. If the share price dips to 15cents, the Management will end up paying shareholders since its fees will be less than the rebate!

Maoli Wind – MIIF smallest investment. Mr Stuart treats this asset with much derision and has more or less written it off. It was a mistake since its revenue was no where close to its estimates. The wind isn’t very strong!

HNE Expressway – Mr Stuart says this asset will start playing a large role in our income over the next few years. The opening of phase 3 will increase traffic by 10% a year. He expects the yield to increase over the next few years. He forecast that it will alone contribute to 1cent/share dividend for 2H 2009. It will rise in the next few years. In short term, the drop in economic activity in Southern China will affect it but not too significantly. It has a very bright future.

CXP – This asset would have similar distribution as the previous year if not for the one off legal expenses of 24mil RMB. It will be slightly lower. Its 2Q performance was very good. One of the better performing ports in China.

CAC – The credit crunch has not affected Canada too badly. Debt is more expensive but it still exists. MIIF made a further 10 million dollar investment in the 1H 09. He expects no significant drop in its distribution

TBC – MIIF star performer. Distribution will be similar as the previous year. Its operating cashflow has exceeded expectations with new products in the market.

MIIF Valuation of Assets

NAV remained constant this year at 87cents. Mr Stuart believes it may have reached bottom and should rise in the coming quarters. The drop in valuation was due to the credit crunch effects on the distributing cashflow of her assets. MIIF uses a discounted cashflow analysis over a stretch of 20-30 years with a discount of between 13-19% (depending on the level of risk). After the Manager decides on the valuation, it presents it to the directors (4/5 are independent). After which, it is presented to PriceWaterCoopers for their input. If there is a discrepancy, there will be a meeting and the Board will reflect the changes in necessary. MIIF also base it on real world asset sales (excluding fire sales). Generally there is very little discrepancy. John Stuart believes the stock price is extremely under-valued.

MIIF Dividend Policy

John Stuart says the current dividend of approx 20mil is sustainable in light of the credit crunch. He made light of the situation by stating that 6 months ago he said 3 cents dividends was sustainable and as such he has lost his credibility. This drew a lot of laughs.

For the 1H =

Income – 28mil
Dividends – 20mil
Investment made – 10mil

Mr Stuart says the days of 4 cents dividends every 6 months are gone until the credit crunch is over. Generally, some of the dividends were derived from one off special dividends from her assets which were regular in the boom times. Due to the economic climate, this 4 cents dividend is unsustainable due to the lack of special dividends and decreased distribution in arqiva and meif. Instead, distributions from HNE, CAC and TBC will form the new core for MIIF dividends. Including the 27 million dollars used to pay debts, for the 1H 09, 1.5 cents was sustainable. He did not forecast a 2H performance but generally it wouldn’t be less than 1.5 cents. He did expect HNE to contribute minimum of 1 cent dividend alone.

As I was eating, some investors were stating that an annualized dividend of 3 cents, MIIF has a yield of 9% which beats FD. Moreover since, the share price is so low, it can’t go down much so they plan to bargain hunt tmr.

Share Price

Mr Stuart believes that the current share price is no where near the Management valuation. This is the reason why the Scrip Dividend is not in place. Currently, the board is looking into all options to narrow the gap. He believes that the price will appreciate with the market but for it to hit back to its old price, its needs a major event to spark it off. He cannot give details as its share-price sensitive. But when queried for examples, he mentioned a sale of its assets with good valuation would drive up the price. The cash generated would be returned back to the shareholders or used to acquire a new asset or do shares buy-back.

****************************************************



MIIF is a nice and welcomed addition to my strategy and portfolio of defensive dividend investing. Infrastructures are generally more defensive plays in nature because they still need to be used be it boom time or recession. The downside: slower capital growth in bull markets.

To me, I still believe this is a gem for the long term. It is still rather undervalued, and much cheaper than CitySpring, which has run up too much in current times. This is something that will continue to be on radar.

Wednesday, August 12, 2009

STI updates!

STI registered a big rise today. But will the trend continue?

A zoom in to the chart plotted before


So far, I notice that STI tends to approach areas where multiple trendline resistance converge. So, STI might slowly gravitate towards the first multiple resistance 2 days from now, or the multiple resistances shaded in light blue. We shall see... Also, STI trends along each fibonacci fan line before breaking upwards. We might also trend along this 61.8% line before moving upwards to a hidden fibo fan percentage, namely the 76.4% line.

As expected way before, STI gravitated towards the 61.8% fibonacci line and the 50% fibonacci retracement line. Channel resistance was also at the same place.

Today, STI rose, but bounced off an already identified trendline. Based on Elliott Wave Count, this is possibly subwave 1 of the final wave 5 (or 3?) upleg, or subwave b of correction wave 4 downwards. Which one it would be, I will have to wait for more waves to unfold before being sure. However, I would go with the former.

Trendline resistance for tomorrow:
2611 followed by 2622


Support would likely be at the 20 MA line, expected to be about 2535.

For pivot calculations:
Pivot2590.087


R12614.213S12573.173
R22631.127S22549.047
R32655.253S32532.133



Combining the two, I would expect strong resistances around the 2615 region, with strong support at 2535.

Hence, expected range of STI for tomorrow: 2535 ~ 2615

Would STI surprise with extra strength tomorrow to smash through the resistances? We shall see :)



For the regretted UOB punt I made, I did some technical analysis as well.


There' still hope that 5 year upchannel is still intact at this point. Support had been found, and we could possibly relook at >$17 again soon.

Furthermore, UOB bounced off the 20 day MA at 16.38 today. It was rather "sticky" at this point throughout the day. This 20 day MA should provide moderately strong support for tomorrow as well, hopefully.

Dow on 11th August, intraday Chart

Just feel like doing an intra day chart to test my TA.




Dow Jones broke up of the downtrend channel, and is on the upchannel. However, a rising wedge is observed. There could be further downside later on in the day :(

We shall see....

Monday, August 10, 2009

Updated Elliott Wave Recount (fine-tuned)

Ok, so I have fine-tuned my EW count with some help from Eagle from CNA Market Talk forum.


Instead of reaching wave 3 soon for the previous post, it appears that we have just finished wave 3, and halfway through wave 4 now. Based on the updated count, it does seems that we are approaching the end of this bear rally, i.e. end of wave 5.

The light blue line represents the 100 week channel resistance. Based on fibonacci retracements, we are likely to reach near 2970 (61.8% fibo retracement) before the end of this bear rally.

However, wave 4 might not be ending so soon. MACD crossing over and stochastics pointing to down do not seem to be good signs. Furthermore, subwave 2 is rather short, so by rule of alternation, subwave 4 would likely be long and complex. Also, STI bounced off the 200 week moving average at 2700.

On the other hand, we have factors supporting STI at the moment, the positivity at DOW on Friday night, the decrease in the RSI, better than expected bank results, as well as the wave 5 scenario.

My expectations remains that STI will attempt one more time to break the 2684 to 2700 region, probably by the end of the month. Should STI managed to break this, the next target would be to reach 2970 at 61.8% retracement and near to the 100 week resistance line. I highly doubt 2970 will be breached.

Friday, August 7, 2009

STI More Bullish to come????

This post is in addition to the previous one, after I had some revelation.

An updated Elliott Wave Count that seems to defy trendlines

I cleared my charts of all trendlines and fibo lines... And I came up with an updated Elliott Wave Count.... A super super bullish wave count...!



We might have just started major C! If that's so, STI has much more bullish to run!
The mother of all bull runs might just be starting!

Supposed major A is from 1455 to 2424, that's a 969 points gain.
So supposed major C started from 2235, assuming that 969 points gain as well, we will reach 3204!

Now, that's super bullish. Let's see how it goes... If this is true, UOB and my remaining 2 CapLand lots will run loose soon...

It all seems to fit into the big picture now. Let us recap Primary A.

Primary A timeline: 9th October 2007 to 9th March 2009
Time taken: 17 months

Within Primary B:
Major A: 3 months
Major B: 1 month
Major C: Let's expect 3 months

That means timelength of Primary B will be 50% of Primary A, and to end on 9th October 2009. 50% is a fibo number. Coincidence? Probably, but October is traditionally a very bad month.

Next, my counts:
Pri B Major A: 1455 ~ 2424 (969 points)
Pri B Major B: 2424 ~ 2235
Pri B Major C: 2235 ~ 3204 (also 969 points?)


Pri B Major B seems to be a running zigzag with 3 waves, and a C wave which is shorter than the A wave. The following running flat example is from elliott-wave-theory.com



Description: Apart from contracting Triangles, a failure in a corrective pattern happens when the C wave is shorter than wave A and fails to go beyond the end of A. This mostly happens in Running Flats and or in Zigzags. It indicates strength in the direction of the main trend.

With the amount of liquidity (in trillions of USD) still around, this is not an impossible scenario.
Wow, if this scenario comes true, my UOB will go very high up. I do hope that it materialises.

Good luck trading!

What's next for STI?

My updated chart with one more trendline:




From the chart, I have identified that tomorrow's trading range could be 2588 ~ 2627.

Again, with the pivot calculations:
Pivot 2606.327


R1 2622.013
S1 2585.813
R2 2642.527
S2 2570.127
R3 2658.213
S3 2549.613


It seems like we have quite a match this time round between the pivot calculations and the trendlines. STI will likely trade between 2588 to 2625 tomorrow.

From the chart, we can also see the closing up of 2 trendlines which I have used to derive my expected range for STI. These 2 lines are closing up soon, which led me to think we will see another sudden movement for STI within another 4 trading days.



Mini-update:


Upon closer look, a short term downtrend can be observed. It depends on whether STI can open above 2588 tomorrow.

Then again, the calculated pivot point is 2606, so we should have a good chance to open above 2588 (or so I hope :( )



Finally... a forumer from CNA reminded me that I'm punting badly. And indeed, I did :(
For trading, one should trade with the charts, not with the heart.

I also agreed with milamberz that the chart does look super super bad for UOB... Of all the counters I could have punted, I chose the worse. It was an extremely stupid move which I regretted. The purchase was done without looking at the charts...

My main hope now is the 20 SMA support... UOB went near and came up... The other hope is that the 3 black crows weren't that strong because today's black candle was very short... The final hope is that UOB price rebounded from the 61.8% retracement line + 100 week resistance, and has now cooled down to the 50% retracement line.... Might bounce up from here.... RSI has also come down from 80% to 60%... Also, the weekly chart also shows quite ok.... or so I thought :(

However, the 61.8% fibo fan limited UOB's climb today...

If it's indeed wave 1 downwards which I suspect, I shall exit at wave 2, hopefully with minimal losses.

Thursday, August 6, 2009

Has STI started its reversal downwards?

I have certain reasons to believe so, even though I punted on UOB yesterday.

Base on Elliott Wave Theory, I have a nagging feeling that we are already in wave 1 downwards... I'm seriously seriously scared.... The main reason is because of the 61.8% fibo fan pointing down at us... 61.8% is a very significant fibo number... If STI can break this fibo fan line, then the next upsurge will be huge... possibly breaking 2745 to achieve near 29xx....

Let's see my previous charts from 20th July

http://2.bp.blogspot.com/_MpWUhDNsH98/Sm8a4_dlLUI/AAAAAAAAApE/NnXojF0NEIg/s1600-h/2009Jul-Straits+Times-800x1025--jul28th-2.png

We hit the first shaded blue circle. will we hit once more at the 2nd blue circle?
Note that exactly at 2nd blue circle, there's one more trendline.

Our 100 week downtrend channel also coincides at 2nd blue circle:
http://4.bp.blogspot.com/_MpWUhDNsH98/SnXGyQHPYcI/AAAAAAAAAp8/hmHlHS67UJk/s1600-h/2009Jul-Straits+Times-800x1025-1.png


It could be already be wave 1 down now.

STI - the expected drop

Finally the long awaited correction.

Mentioned few days ago in this entry, today is exactly the 5th trading day. Also mentioned in this post about the fibonacci resistances. Fibo fan + Fibo retracement is indeed amazing!


Ok, a bit busy to post my updated chart today, but I expect STI to make one more climb.

I identified another support line today, which seems to suggest that STI might find base around 2578. The upper bound tomorrow will be around 2630.

Using the widely used pivot system again,

Pivot 2621.893


R1 2650.177
S1 2578.547
R2 2693.523
S2 2550.263
R3 2721.807
S3 2506.917


Taking average, tomorrow's action should likely be between 2578 ~ 2630.

As support for National Day, I also bought in UOB at $16.68 as a punt (around STI 2600 region). Might be bad, but.... at least I know UOB will not close down in Singapore in this recession. It might drop to $8 or below, so if I'm stuck, I better get ready more cash to average this out :(

I'm making a prediction again that we will see something with STI within 5 trading days. And this time, a likely last surge up. :) Hopefully it turns out true and I will be able to get out of UOB with some profit.

It could already be the start of the downtrend as we have reached near the 61.8% fibo fan line, which is a significant ratio... Good luck...

Wednesday, August 5, 2009

The STI

STI has broken out of the orange support channel here
http://wealthbuch.blogspot.com/2009/08/downtrend-channel-on-sti.html

I believe the support line would have turned resistance (hopefully wrong?). From charting, tomorrow's trading range could be between 2640 ~ 2684.

Using the pivot system calculations as well:

Pivot 2665.86


R1 2683.68
S1 2630.94
R2 2718.6
S2 2613.12
R3 2736.42
S3 2578.2


Combining, 2684 coincides as resistance.
2630~2640 coincides as support, with the average at 2635.


Final conclusion is that STI would likely trade between 2635 to 2684.
The next resistance after 2684 is at 2700
So far, I can't identify any support yet right below 2630. However, I don't expect this value to be broken at all tomorrow because other than 2 channel supports, the 5 day EMA is coming up to support STI again as well.

Would I be wrong? It doesn't really matter to me. Nothing better to do mah :D

Tuesday, August 4, 2009

STI is getting interesting

STI finally touched the magic 50% retracement number at 268x. Seems like my expected range for STI differed by about 5 points on the upside and downside yesterday :(

How will it go from here? That's really a million dollars question.

With the new experimental pivot system that uses the previous day's close, day high and day low (and which I'm trying to do some tweaking), the following calculations are made for tomorrow:

Pivot 2665.697


R1 2698.413
S1 2648.923
R2 2715.187
S2 2616.207
R3 2747.903
S3 2599.433


From my chart yesterday, today's action was still within the confines of the green upchannel resistance line and the orange uptrend support line.

As of tomorrow, 50% retracement levels 2684 has come into the picture to play. The 5 day EMA now forms a support as well for STI. And as noted yesterday, the blue resistance turned support line came to support STI as well today at 2632.

From my chart yesterday, using channels, my first support for tomorrow would be 2660, followed by 2634.
Resistance expected at 2684, then 2690, 2705 and 2712. With so many resistances to break through tomorrow, I don't expect STI to go past 2712.

Will STI surpass all expectations? We will have to wait till 5pm tomorrow to find out :)

Monday, August 3, 2009

Downtrend channel on STI

With some sharing from Milamberz in CNA Market Talk Forum, I managed to identify some possible downtrend channels, and charted them in the chart below.



Ok, zooming in on the targeted part.



It appears to me that STI could have just broken another of the down channel resistance, and the line has become a resistance turned support line. To make things more interesting, it appears that the 5 day EMA has come to support STI.

Monday would be interesting as it is the cross of 2 support lines, possibly forming a strong support at 2635 for STI should it comes down.

First resistance at 2673 followed by the long awaited 2684.



In addition, I have learned basic pivot point analysis from the net recently. From what I have read, the pivot point for the next trading day is calculated by taking the average of the close, day high and day low of the previous trading day.

The official calculations for Monday are
Pivot: 2651

R1 2667.357
S1 2643.137
R2 2675.513
S2 2627.073
R3 2691.577
S3 2618.917


Comparing with my chart and coupled with the pivot calculations, 2635 ~ 2643 could signify good support. 2673~2675 signifies good resistance.

It would be interesting to see if STI can break past and defy my so far basic TA logic.

In short, expected trading range for STI on Monday: 2635 ~ 2673

Credit Card Applications Rejected.... Huh?

Wow. First, Maybank, then now HSBC. Both rejected my applications for their credit cards. Only POSB accepted me for the Everyday Card.

Is my credit really that bad? Let's see. I have worked 1 year 2 months.

My debt:
19k SGD of CPF education loan

My current assets as of today:
20k SGD in Phillips Money Market Fund
63k SGD in equities
5.5k SGD in unit trusts
4k in bank

My income, excluding ang bao money from tuition, easily exceeds their 30k SGD p.a. requirements.

Yet a fellow graduate from the same year, earning the same amount, working in the same company as me, was accepted for the credit card. Like huh? No reasons given, nothing.

Sometimes I wonder. Could it be that the workers in the bank just grab a few of the applications and declare as unsuccessful without checking with the Credit Bureau? Why the need to spend effort to check when one can simply just declare an application successful without giving any reasons? For HSBC, I sent the application on the late morning of 30th July via online form + fax. And I receive the rejection letter dated 30th July! Like wow! Their speed of processing is sooooooooooo fast.

I guess I will not be looking at applying for credit cards with HSBC or Maybank anytime soon. Not that such banks will mind a small fish like me.