STI fell below 3300 on 18th Jun 2018 has invalidate the Scenario 2.2 mentioned in previous analysis, that is the correction which started late January 2018 is Primary degree Wave 4. This is due to the fact it has overlapped into Primary degree Wave 1 peak. Hence, STI is now down to the remaining 2 possibilities, Scenario 1 and Scenario 2.1. Though both these scenarios indicate STI is in Primary degree Wave 3 doing Intermediate degree Wave 4 correction, the different is how Primary degree Wave 1 and Wave 2 are shaped. This will be useful to analyze Primary degree Wave 4 in the future.
The above chart shows how STI looks like for both Scenario 1 and Scenario 2.1 now. There are some interesting points to note.
1. Intermediate degree Wave 2 of Primary degree Wave 3 retracted about 61.8% Fibonacci Retracement
2. The intra-day low on 19th Jun 2018 is very close to the 38.2% Fibonacci Retracement for Intermediate degree Wave 4 of Primary degree Wave 3 correction
3. The present correction which started late January 2018 looks very much like a Triple-Three correction and now it is in the final stage of Wave Z. Alternatively, it could be a Double-Three with a mini Double-Three embedded and it is also in its final stage.
4. Intermediate degree Wave 2 of Primary degree Wave 3 correction lasted from April 2016 to June 2016, a period of 2 months
5. Intermediate degree Wave 4 of Primary degree Wave 3 correction started from January 2018 till now is already 5 months old
Due to the alternation nature between Wave 2 & Wave 4 of Elliott Wave, with Intermediate degree Wave 2 already did an almost 61.8% retracement, the possibility of the present correction (Intermediate degree Wave 4) doing a 38.2% retracement being very high and STI was just slightly more than 1% away from that level with 19th Jun 2018 intra-day low. Although Elliott Wave never describe the relationship of each wave in the horizontal domain (the time axis) but by logic reasoning, a deep correction with simple pattern (zigzag) will usually take shorter time to achieve than a shallow correction with combination pattern (double-three, triple-three, etc) which stretches out horizontally. 2 months was taken for Intermediate degree Wave 2 correction and the present correction which develops into a triple-three combination is 5-month old, more than 2 times the duration taken by wave 2. Therefore, there is a high possibility that the present correction is coming to an end, either just a little more downside or perhaps bottom has achieved.
This is just an Intermediate degree correction STI is undergoing and it seems majority confidence already shaken as can seen from the selling off by investors. If just an Intermediate degree correction already cause confidence to be shaken, how can one stomach the next one, Primary degree Wave 4 correction, which is of higher degree in term of correction ?
Now it is more like slowly accumulating rather than selling off. The trades war concerns between US-China might be the key to investors selling off but think rationally, nobody with a correct mindset (except those whose brain has a nut or two drop off) would want a trade war as neither will gain. On the surface US might be at advantage of the trade war BUT that is on a short-term basis only, in the longer time frame, it will eventually lose out. Burning bridges are easy but building them are not.
