Tuesday, March 9, 2010

STI Updates -- Correction Coming?

STI rallied over the last few days. However, although I was more bullish bias, counting the more mini waves appear to be on the bearish side at the moment. In addition, different chart indicators and trendlines also display resistances on the Straits Time Index as well. The STI Elliott Wave structure seems to be rather complete this time too.

Attached is the chart:

Stepping through the indicators:

1) Bearish rising wedge resistance seen on the dailies.
2) STI is currently in the large gap resistance band
3) MFI did not make a new high, leading to a negative divergence.
4) CCI and %R shows overbought conditions.
5) 1-2-3-4-5-a-b-c structure looks complete. Perhaps a C wave downwards again...

1) A gap which was created today would perhaps act as a strong barrier.
2) MACD and Stochastics are still positive
3) Long term GMMA crossed shorter term GMMA.

Overall, I would be more on the more bearish side.... Especially when the Elliott Waves structure is so clear, and a 5 mini waves structure to be expected... Of course, this major corrective wave might not be A-B-C, but instead morph into a A-B-C-D-E triangle... Shall see...


  1. Hey momo,

    How do you determine where to draw the starting point of ur MFI determine?

    Indicators help us spot a change a trend, would it be better to draw it from Feb onwards?


  2. Hey Jingwei,

    for MFI, to me, it's just like charting on normal charts.... how do you determine the starting point? You draw channels to determine trends by linking the tops or the bottoms together right?

    I did the same for MFI. The key is just to identify divergences only. I use MFI instead of RSI because MFI takes into account volume.

  3. STI has quite a bit of resistance to clear at the 61.8% retracement level, which is where we are around now. However if it is cleared convincingly, STI could be on the way to 2880.

    This is an interesting quote from a US blog : ' But 1 thing does intrigue me as a bear. We are finally close to the bears being in full give-up mode. There is animosity on all these blogs, name calling, doubting EW and TA in general, and a growing bullishness sentiment. I think we're probably close but not all the way there yet. The final step may have to be Prechter and Hochberg throwing in the towel which seems like it 's close as far as Hochberg is concerned.

    Remember 1 thing, this was exactly the same pain the bulls were feeling in 08-early 09. The ultimate hopelessness feeling was the final leg down after it seemed like the mkt had bottomed in Nov 08 just to bust to new lows into March 09. Bulls were disgusted, doubted financial mkts and our gov't, and all but gave up. The bears have to be beaten to a point where when the fall happens, they will be too broke or too scared to catch a big move. The tipping point is near. By that I mean it may be this week or within a couple months. A couple months is nothing in the grand scheme as the next leg down will likely last years. look for 1150 to breach.'

    Anyway, I've been experiencing problems with downloading data to Chartnexus ever since I downloded the 3.1 version. Uninstalling and reinstalling doesn't seem to help..

  4. Thanks for the reply momo.

    I'm asking that because based on your previous posts in Nov and Dec, there are a couple of breakouts from negative divergences for MFI. So how well can we make use of trendlines drawn for indicators? Open/close positions during indicator trendline breakout? Most ppl including i myself, take the easy way out. Look at the % level for indicative feel of overbought/oversold.

    Also, if you have drawn the bottoms of MFI starting from feb, we get higher lows; no negative divergence. Which brings me to my next point, will the sensitivity of trendlines of such highly volatile indicators reduce, when they are drawn for too long a period?

    Hmm, don't have chartnexus now...can't really verfiy.

  5. Hi Hubert,

    The quote is indeed interesting. Waves are fluid and can change anytime... I offloaded my Sinktel at 3.12 this morning (on hindsight, I should have waited :( )

    I think your problem for chartnexus has a solution online somewhere... Need to google it... Thought I saw it on ChartNexus forum...

  6. Hi Jingwei,

    I'm no expert at using these indicators :(
    I'm also guilty of taking the easy way out :(

    And ChartNexus isn't with me now too...

    But all I can say is that such TA only tweaks the element of probability towards our side... It is never 100%... Drawing for longer time periods might not mean anything too unless your time horizon is super long perhaps? Even then, I cannot confirm that too...

  7. thanks momo..

    congrats on ur singtel.

  8. Hi Jingwei,

    thanks, although I sold 2 lots out of 4 lots of Singtel too early in the morning at 3.12 :(

    Still, it's an achievement to be able to sell at the day's low! :)


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