STI Elliott Wave Count Update (5th Apr 2010)

STI achieved a new high today, with a certain degree of euphoria. It does appear that the 5th wave has commenced, but when it will end, I'm not sure yet. The bollinger band does look like it's closing up, signifying that the end of this 5th wave could be near, although not quite yet.

In my chart below, it's a repeat of the bullish bias wave count in an earlier post. The looming 3000 resistance looks rather insurmountable at first, leading me to believe we could finish the 5th wave before crossing 3000 convincingly. However, there's still the possibility that 3000 can be crossed. (Sounds like talking rubbish right?.... but this is a talk on probability.... :P)

In the earlier post, I mentioned about the extended wave 3, and the high likelihood of wave 5 being symmetrical to wave 1. Given wave 1 took about 492 points, if wave 5 were to take the same points rise, then we could likely visit 492 + 2675 = 3167. 2675 is the most recent low for STI.

From the chart, we can see not only is there resistance at 3000, there's also one more resistance in the region beside 3200. This is rather close to the Elliott Wave theoretical calculation of 3167. MFI continues to show a little bit of divergence, while the market continues to climb. Divergence does not necessary mean the market will turn the following day, but it could mean the end is nearing soon.

Also, the volume of STI is below the 50dma for volume today although STI reached a new high. The volume continues to get smaller and smaller as more and more are getting cautious of entering the market at this juncture.

Certainly not a time to buy STI component stocks for the long term. We shall see over the next few days.