Saturday, June 15, 2019

STI Analysis -- the next peak and trough ? (48)

Continued from STI Analysis -- the next peak and trough ? (47)

STI rebounded since hitting the low at 3104.03 on 3rd Jun 2019 and this shall be the Minor wave B of the Intermediate wave 2 correction as shown.

The question now is how much more upside can this wave B goes.  According to Elliott Wave guideline, depending on the pattern of wave B, it can rebound from 23.6% to 138.2% Fibonacci ratio with respect to wave A.

Above is the data generated by the Correction Calculator for all the possible wave B and wave C targets.  STI hit an intra-day high of 3223.64 on 14th Jun 2019 and this value definitely falls into the minimum requirement for wave B according to the data generated above.  STI could still have some more upside coming for wave B given that it has not shown a sign of a zigzag pattern yet.  The correction now brings forward to wave C.  From the low of 2955.68 to 3415.18 (Intermediate wave 1), STI has already hit the target of 61.8% Fibonacci retracement (3130) with the low of 3104.03.  It is possible to move down further to the 78.6% Fibonacci retracement at 3053.  Assuming a typical zigzag pattern for Intermediate wave 2 correction with wave A at 3104.03 and a wave C = wave A guideline, wave B could rise to the 85.4% Fibonacci retracement at 3369.752 of wave A and this will allow wave C to end at 3058.602, somewhere near the 78.6% Fibonacci retracement for I2.  This is what the Correction Calculator generates.  So is this scenario possible ?  There is no indication it is impossible given that wave B has yet to form a zigzag pattern indicating it could move up to the 3369 region as generated.

However, the above is assuming a typical zigzag pattern for A-B-C.  In practice, wave 2 correction can have various patterns.  It could even form the pattern whereby after completion of A-B-C, the lowest point of the whole correction is actually wave A (3104.03 in this case).  So keep options open and meanwhile be mentally prepared for wave B coming to an end in the coming week or weeks.

The above is the possibility of what can happen in STI-2 scenario.  Do also note that should STI fall below 3053 (the 78.6% Fibonacci retracement), this could raise the possibility that the STI-2 wave count is wrong.

Despite the rebound in STI, that has not invalidated the STI-N scenario.  In STI-N scenario, STI is still in SuperCycle wave 2 correction with SuperCycle wave 1 ended in 2015.  The only way to invalidate this scenario is for STI to break above 3940.029.  So keep option open for this scenario.  Should this scenario eventually becomes the valid one, this brings out an interesting fact.  Back in Jan 2018 in STI Analysis -- the next peak and trough ? (2), a pattern mapping was done and reproduced as followed.  This point also has been raised in STI Analysis -- Recap 2018 & Looking Ahead 2019.

The pattern mapping analysis shows that a peak will be occurred either in 2018 or 2019 with STI eventually bottom at 2020 or 2021 respectively.  Should STI-N scenario is the correct wave count going forward, the above pattern mapping that 2018 is the peak becomes true.  This suggests that since 1984 STI peak and trough can be predicted. 

A while back, a reader actually e-mailed queried on US market analysis with the EW Calculator.  While, at times US markets namely S&P 500 was been look at but it is solely for testing the EW Calculator capability and as such any US markets analysis will not be blogged.  However, a piece of advise on US markets at this junction -- better earn $100 less than losing $1000 later !

Sunday, June 2, 2019

STI Analysis -- the next peak and trough ? (47)

Continued from STI Analysis -- the next peak and trough ? (46)

In the previous analysis, 2 scenarios were mentioned STI-2 and STI-N.

STI-2 describes STI has completed an Intermediate degree wave 1 forming a leading diagonal pattern.  The Elliott Wave Degree Calculator as shown in the last analysis is reproduced as followed

An interesting point is the calculated value of Intermediate wave 2 is 3112.08 and STI hit an intra-day low of 3110.51 on 31st May 2019.  So is 3110.51 the bottom of the current correction ?  From data perspective it does appear so but if looks into the pattern of the Intermediate wave 2 correction, it is a different story.

Pattern wise, no sign of a A-B-C structure was observed and as such, it is impossible to call for a bottom at the moment.  There might be a rebound coming to form the B wave before resume the last leg wave C.  Some points to note on current correction.

1. Last year the Primary wave 2 correction lasted from January to October, a 10-month duration.  While Intermediate degree is the sub-level of Primary degree, the duration of the correction should persist for considerable duration ranging from weeks to months.  It should not exceed the duration of the Primary wave 2 correction seen last year (10-month) but it is also unlikely to end soon.  Since hitting the high of 3415.18 on 29th Apr 2019, it is already 1 month into correction.  With no sign of wave B observed yet, better prepare for few months more for the correction to end.

2. There is no confirmation of wave A has completed yet despite rebound from 3110.51 and that is a worrying sign of this wave count going to be invalidated.  In general wave 2 correction can fall to 78.6% Fibonacci Retracement which is at 3052 and if STI continues the descend till that level without a B wave, a very high probability that this wave count going to be invalidated.

Should STI fail to hold at 3052, this very likely indicate STI-2 going to be invalidated and unless another positive wave count surface, STI going to fall back to the STI-N scenario.  This scenario indicates that the high in 2015 was SuperCycle wave 1 and from then till now STI is in SuperCycle wave 2 correction and there will be more downside to come going forward.

The above wave count is slightly different from the previous analysis.  In previous analysis, it is said that STI still in the B wave of the SuperCycle wave 2 and possible still more upside with a maximum target of 3940.029.  However, if STI going forward fail to hold at 3052, the wave count will be as above.  In this wave count, the B wave of SuperCycle wave 2 has completed in April 2018 and now it is in the C wave.  From the look of the pattern, this could develop into a Flat pattern (3-3-5).  The 5-wave impulse/diagonal of the C wave has completed wave 1 and 2.  The current drop is the wave 3.  This wave 3 will not just breakdown at 3052, it will also move lower than last year low of 2955.68.  Taking a typical wave 2 to be 61.8% Fibonacci Retracement of wave 1, the downside for SuperCycle wave 2 could be around the region 2250.  

The above is the snapshot of the Fibonacci Calculator generating the 5-wave impulse for wave C.  Unless wave C is a diagonal else the end point of wave C as indicating above is 2165.294.  Thus, 2250 is not an impossible target if STI-N is the correct wave count.

At the moment, there is no evidence of invalidating either STI-2 or STI-N scenarios so better prepare for both the scenarios.  The immediate level to look out for is 3052, a level could provide early indication of whether STI-2 still valid.