In the analysis dated April 2016 (What's Next For STI ?), an expected termination point for wave 3 according to Elliott Wave analysis is 3,392 and the recent high for STI was on 27th Jul 2017 clocking a close at 3,354.71, a mere 37.29 point short off the target. In addition, looking at the chart below, a mini wave i,ii,iii,iv,v seem to have completed on the wave 3. Another reason to support the current down is wave 4 is the alternate nature of wave 2 (being a triangular flat shape) and the potential of a sharp drop in wave 4. A potential ending point for wave 4 is the Fibonacci retracement of 38.2% which is around the 3,126 level or the 61.8% which is around the 2,998 level.
Though at the moment we cannot say 100% it is wave 4 but the possibility is very high now. Wave 4 will not be a straight line down but in the nature of a ABC wave structure ie, there will be a rebound before further down. As that shape starting to develop, we can more or less confirm it is wave 4 already.
So, should we be happy it is in wave 4 because after that will be another uplift in wave 5, moving the market higher ? or should we be really worry as after wave 5 is the big crash down wave ABC ? Well all this really depend what one has strategically plan for.
The above is the analysis of the current up wave but if we look at a bigger picture, it will be a different story. I have 2 scenarios when come to the bigger picture.
The Positive Bigger Picture
Since the market descend started in April 2015 till February 2016, we can assume that is the complete cycle for the 2009 market recovery (wave 1,2,3,4,5 and wave A,B,C) and the current up wave is another new cycle, a big wave 1 for the new bull cycle. The coming wave A,B,C (which many are anticipating the market to drop) is actually the big wave 2 for the new bull cycle. Unfortunately, there lack concrete evidences to suggest this is the case at the moment but for a complete and unbiased analysis, I'll just list it out.
The Negative Bigger Picture
This scenario was on my mind when I analyzed STI last year but didn't pen it down and only raise it on the analysis on 12th May 2017. The current up wave is actually a continuous of the big crash in 2015, that is this up wave is the wave B of the down wave. The completion of wave 4 and 5 of the current trend will resume the big wave C. This big wave C will send STI down to the level we have seen in the 2008 GFC. The detail of that can read from the 12th May 2017 analysis.
From the look at current global events and economic situation, it is definitely biased towards the Negative Bigger Picture.
There are couple of things I like to link to for the above analysis.
1. Robo-Advisors
This should not be a strange term to most now and probably some already using it. My main concern is this robo-advisors only appeared in the past 1 to 2 years and wasn't around in the 2008 GFC. As such, they actually have not gone through a complete cycle of bull and bear in the market. We all know you can't call yourself an investor or trader if you have not been through the bull and bear of the stock market. So how these Robo-Advisors will react to another crisis like the 2008 GFC ? It is anybody guess as they are not tested yet for that scenario in practice. Robo-Advisors definitely is not a human being and can it analyzes comprehensively like doing an Elliott Wave on the stock market to look at the bigger picture is questionable. As such, this can lead to unnecessary risks for the users.
2. Singapore Economy
We all know that stock market is an forward indicator of a country economy. Should the stock market be heading to the Negative Bigger Picture scenario then what we are seeing now of the uptick in Singapore GDP is practically just an DEAD CAT BOUNCE. Singapore economy is practically on a downward trajectory since the recovery of 2008 GFC, the current uptick has not negate that trend yet. If indeed it is true that the Negative Bigger Picture scenario will be played out then it will be like for a whole decade Singapore economy is on a decline, any optimism from Government or economists can flush down the toilet bowl. Is that acceptable with probably the most expensive Government in the world ??? I think we should give a "BIG ROUND OF APPLAUSE" to the Government for letting this to happen and also another "BIG ROUND OF APPLAUSE" for the 60% and 70% of nation (the past 2 GEs figure) for indirectly in forming that scenario.
