Looking at the past 14 STI analysis found that I got distracted from the 4th analysis onward when I started to get into analyzing on Elliott Wave degree lower than Intermediate level. That was not my original intention when I started to blog on early this year. The original intention was to track Primary degree Elliott Wave which started in 2009. The lowest degree that should be looking at will be the Intermediate level and nothing more below that.
Tidying things up and refocus back to the Primary and Intermediate degree will now narrow down to 2 possible scenarios as shown in the chart below.
Scenario 1 (Red)
Primary degree Wave 1 started in 2009 at 1455 and ended with a leading diagonal formation at 3550. Primary degree Wave 2 a simple zigzag formation ended in 2016 at 2528. Presently, STI is in Primary degree Wave 3 despite the weakness in STI lately. The level 3550 in this scenario is the critical level as any correction in Primary degree Wave 4 cannot lands below that. As such, the current weakness in STI cannot conclude that Wave 3 has completed and it is in Wave 4. Thus, STI is still in Primary degree Wave 3.
Scenario 2 (Magenta)
Primary degree Wave 1 started in 2009 at 1455 and ended in 2011 at 3315. Primary degree Wave 2 is a double-three combination of zigzag - flat and ended in 2016 at 2528, the same level as in Scenario 1. Hence, STI like in Scenario 1 is in Primary degree Wave 3. The level 3315 in this scenario is the critical level as any correction in Primary degree Wave 4 cannot lands below that. Apart from the critical level being different from Scenario 1, this scenario at this moment can branch into 2 possibilities, 2.1 and 2.2.
2.1 Primary degree Wave 3 ongoing
This is the same wave count as in Scenario 1 with the peak of Wave 1 being different.
2.2 Primary degree Wave 4 ongoing
In this case, Primary degree Wave 3 ended in early this year at 3611. From then on till now STI is undergoing Wave 4 correction with a combination formation. This possibility will be invalidated should STI fall below 3315 or in later stage when possibility 2.1 or Scenario 1 becomes the actual wave count. There is also a questionable point in this possibility that is the length of Wave 3 is shorter than Wave 1. Though the rule only states that Wave 3 cannot be the shortest but the rare case of Wave 3 shorter than Wave 1 with Wave 5 shorter or equal to Wave 3 still consider a valid wave count. As such, 2.2 will be ranked lower than 2.1 in term of possibility in this analysis.
Above is the STI ETF chart since 2009. It somehow looks different than the FTSE STI chart as present value already exceed the peak in 2015 (Scenario 1 Wave 1). As for why it behaves differently apart from STI ETF chart is being adjusted for dividend there is no other reason I could use to justify the difference. From the look of the above chart, there is every evident to believe STI could in Primary degree Wave 4 correction. Hence, that is the reason possibility 2.2 is included in the above analysis.
Whether it is Scenario 1 or Scenario 2, both pointing to STI moving higher later on (some more upside) before the Elliott Wave cycle that was started in 2009 comes to an end, major correction kicks in and another global financial crisis and recession (probably 2020).
Hence, as long as there is no violation occurs for Scenario 1 or Scenario 2.1 or Scenario 2.2, further analysis will only be blogged at the confirmation of next wave count at Primary degree level only.
Added 14th June 2018
FTSE STI fell further today hitting an intra-day low of 3345 almost the same low of 3338 as of 4th April 2018. That weakness raise the possibility that the above Scenario 2.2 could be invalidated, The performance today also enhanced the possibility biased toward Scenario 1 and Scenario 2.1, indicating STI still in Primary degree Wave 3 and current weakness is Intermediate degree Wave 4 correction, a combination pattern which started since hitting the peak (end of Intermediate degree Wave 3) in January 2018.
Should it be Intermediate degree Wave 4 correction, a 38.2% Fibonacci Retracement should see STI falling further to around 3264. A 50% Fibonacci Retracement to 3156 is also possible given that Intermediate degree Wave 2 did an almost 61.8% Fibonacci Retracement.
