Today's STI performance

So far so good. All as expected...


Upon zooming in closer to my daily chart, a few more things were noticed. First was the fact that STI remained in my channels, which probably shows I'm still on the right track.




Interesting thing to note. I counted a 5 waves structure starting after the breakup of the symmetrical triangle (which constitute a complex correction wave) on 15th July 2009. I have plotted my expected subwaves on the chart using fibonacci retracement if you observe carefully.

My count is
subwave 1: 2319~2485 (166 points)
subwave 2: 2485 ~ 2443 (~23.6% retracement in 1 day on chart)
subwave 3: 2443 ~ 2642 (199 points)
subwave 4: 2642 ~ 2567 (~38.2% retracement in 1 day on chart)
subwave 5: 2567 ~ ???


I still expect this 5th wave to terminate within the region 2684 to 2709, giving us another 117 ~ 142 points rise... Sounds logical right?

Shall see how it goes... What I'm unsure of yet is which major wave this is part of...


Also from chart, we can see that STI is being "squeezed" by the mid term upchannel resistance and the short term upchannel support.
Expected trading range for STI tomorrow is 2610 ~ 2665.


Shall keep money in my defensive dividend stocks, and probably start moving funds out of my remaining pennies which are in red :(

Further analysis on STI

Based on the daily charts and recent price actions, it seems that STI will reach 268x within 5 more trading days to touch major resistance.

From yesterday's chart, we can see that today's action came down from a 4 months channel resistance line. STI has not been successful in breaching this resistance line... It attempted yesterday but failed to breach it convincingly today... It also came near short term support at 2563 before bouncing to close higher...

I expect a last mini leg up to complete within the next 5 trading days....

Expected range tomorrow: 2582~2655
A break up at 2655 will see next target at 2690 A break down at 2582 will signify the end of the recent uptrend.



Suddenly had an inspiration too to compare the performance of STI in 1996~1999 vs the current economic downturn. Below is a chart I took from Yahoo Finance, and edited in Photoshop to match them together.

Heard of the infamous 10~11 years cycle? Check this out:

Do bear in mind that the timeframe was kept the same. No scaling or stretching of the charts were done; this picture is just a superposition of 2 different time periods.

It does look like we are repeating the same pattern.
Will the pattern repeat again? Only time will tell. However, based on current sentiments, I do believe that it will repeat.

Updates, Updates, UPDATES!

A nice bullish run-up by STI today. The timeframe came earlier than expected by 2 weeks.
My earlier chart is now updated with certain channels and trendlines that were observed.

I can't identify any long downtrend channel yet...... the only one I can identify has already been broken.... So I shall concentrate more on the short term...



My revised target between 2684 to 2709. There, we can see a multitude of resistances. It would not be easy to break through this thick wall, but if it does, we can expect to see STI cheong to my second resistance line (green line) to reach the 28xx~29xx region.

For the short term, I don't expect this to happen. The defences set up by bears at 268x region are plentiful. RSI has reached 90% and stochastics have touched, possibly crossing downwards soon.

Let's see how it goes for STI.

In addition, I have sold China HongXing at 20.5 cents, admittedly a little on panic. STI has risen 403 points from 8th Jul to 28th Jul in just a span of 15 days!!! The rise is just too irrational for me... However, I bought into Hor Kew, a laggard construction stock, at 12.5 cents for a little punt.

As Warren Buffet says, be greedy when everyone is fearful. Be fearful when everyone is greedy.

Yet, another cliche goes that trade the trend until it breaks.

The uptrend hasn't been broken yet, but I'm extremely fearful now. Shall slowly unload Fuxing and Hor Kew whenever the opportunity arises to do so.

Elliott Wave Basic Theory and Wave Structure Part 1

This is the first post of my research on the Elliott Wave Theory.

Basically, Elliott Wave Analysis is only about identifying 2 types of wave structures, which are Impulsive waves and Corrective waves respectively. To do further analysis, we will have to make use of

(i) Relationship between the waves
(ii) The degree of the waves.
(iii) Fibonacci Tools
(iv) Trendlines and channels

and so on...

There are certain rules we must follow and many many guidelines to make use of in order to increase the accuracy of our counts.
This post aims to try to understand how to identify Impulsive and Corrective waves.


For traders experienced with Elliott Wave, he/she will be able to identify the Impulsive and Corrective waves immediately in one glance, and come up with one or more different wave counts which can all be valid. The purpose of wave counting is not so to get the correct wave counts, but more of identifying and recognizing what the next market trend is. Would it be a strong or weak wave? Would it be a simple or complex wave? Proper usage of Elliott Waves can give a trader the advantage of "timing" the market and to be able to be ahead of the market by a few steps.



*** More to come ***