STI Analysis -- the next peak and trough ? (25)

Continued from STI Analysis -- the next peak and trough ? (24)

At this stage STI correction since end January 2018 has became very clear, in particular, should the Elliott Wave count to be correct, the correction should be coming to an end.

Looking at the Primary degree of the Elliott Wave cycle, STI is displaying 2 possible scenarios

The above chart is for the scenario whereby STI in undergoing an Intermediate degree Wave 4 (P3I4) correction where the Intermediate degree Wave 3 (P3I3) was completed in end of January 2018 at STI 3162.  In fact this is the scenario for most of past analysis was focusing on.  Though by Elliott Wave rule, it is not invalidated due to Wave 4 overlapping of Wave 1 (STI 2963 level), the depth of the correction so far (more than 50% Fibonacci Retracement) raises question as by Wave 4 standard, that is considered quite a deep correction given that Intermediate degree Wave 2 (P3I2) correction of the above Elliott Wave count has a correction of almost 61.8% Fibonacci Retracement.  However, this scenario will still be retained and will only be invalidated if violation of Elliott Wave rule (wave 4 overlaps wave 1) or the future progress of Elliott Wave count invalidate it.  Another short-coming for this count is STI might not have enough room for a Primary degree Wave 4 (P4) correction (so as not to overlap Primary degree Wave 1) as after the present correction only left Intermediate degree Wave 5 before P4 kicks in.

The above chart is for the scenario whereby STI is undergoing an Intermediate degree Wave 2 (P3I2) correction where the Intermediate degree Wave 1 (P3I1) was completed in end of January 2018 at STI 3612.  Looking at the depth of the correction for this case which is near the 50% Fibonacci Retracement level at 3070, it does look reasonable for a wave 2 correction.  In addition, if this is just Intermediate degree Wave 2 (I2) then it will have I3, I4 and I5 to go before Primary degree Wave 4 (P4) kicks in.  By that time, STI level would be at a very comfortable height that P4 will be impossible to overlap P1 for a rule violation.  In fact in STI Analysis -- the next peak and trough ? (III) the possible Primary degree Wave 3 peak was estimated to a possible of more than 5000 based on top level and past statistic calculation.  That is possible if STI is only doing P3I2 now as STI still have I3 to I5 to go.  Thus, this scenario at the moment is the more preferred among the 2.

The above chart is the ongoing correction.  It again split into 2 possible correction pattern, an Expanded Flat (A-B-C) or a Flat - Zigzag Double-three (W-X-Y) structure.  Will need to see going forward how the correction unfold to determine which case is the valid one (or probably both case still valid even if correction has completed).  Some might think STI could have bottom on 12th Sep 2018 when it hit an intra-day low of 3102.73 but the wave count so far doesn't seem to tally with that.  In fact based on the wave count (either for Expanded Flat or the Double-three) STI still have one more down wave to complete the correction.  The rebound from 13th Sep 2018 is just the wave iv rebound.  Based on the wave count, Wave C or Y is either doing a 5-wave impulse (wave v on a possible ending diagonal or extension) or two 5-wave impulse (forming the zigzag pattern) respectively.  Both count still missing the last wave v.  For the latter case, wave v could end up with an ending diagonal (of a lower degree) and that will be the confirmation that it is doing the two 5-wave impulse and in turn invalidated the Expanded Flat correction pattern.  The possible destination of wave v can be estimated by the green-colored projection line (this is taking the case that wave iv has reached its peak on 14th Sep 2018 and if not, the projection line will be adjusted accordingly).  So far, the red-colored projection line to estimate destination for wave iii has been spot on, that is one of the feature of Elliott Wave.  With that, either the 50% Fibonacci Retracement level at 3070 for P3I2 correction or 61.8% Fibonacci Retracement level at 3050 for P3I4 correction is possible to be hit.  However, that is just a guide, STI could land anywhere near those values.

Added 17th Sep 2018

STI fell and closed at 3141.40 looks very much like wave iv has completed last Friday.  A further pull back in the next 2 days should confirm that.  Should that happen no diagonal was formed which means wave C is forming a zigzag patter instead.  The result of that shall discuss later when the whole correction has completed.  Meanwhile, the outcome of this wave v shall have couple of possibilities :-

1. a truncated wave v in which it could end near wave iii, 3102.73 or slightly undershoot that.

2. an ending diagonal of a lower degree as the current pull back is the wave v-i of the ending diagonal meaning STI shall see some whipsaw to complete the correction

3. a straight drop beyond wave iii, 3102.73 to possible destination of between 3030 to 3080.

Added 18th Sep 2018

STI fell to an intra-day low of 3110.79 before closing at 3139.34, a slight drop from yesterday but nevertheless it is basis toward forming of wave v.  However, there is still a chance that this is still part of wave iv (doing a zigzag) before moving up to overlap wave i.  Should it be wave v, the question will be which of the 3 cases listed yesterday will play out.  The 3 cases actually describe the psychological behavior of people toward news/events that move the market.

1. truncated wave v represents majority believe the worst part of the news/events are out and market is just doing knee-jerk reaction.

2. an ending diagonal of a lower degree represents people are trying to fading off of the news/events being released, the worst one is factored in and not necessary over.

3. a straight drop represents the worst and last of the news/events yet to happen and it will happen to strike the fear and panic off people when it is being released.

Regardless of which cases, it is about time for slowly accumulation and stomach some risks along the way.

Added 19th Sep 2018

STI closed 3176.57 after hitting an intra-day high of 3181.50.  With the rise today, it has eventually narrowed down the 2 cases from the 3 mentioned days before.

Case 1 is STI correction ended with a truncated wave v-v, today is the start of the Minute wave 1 of Minor wave 1 of Intermediate wave 3 of Primary wave 3.  The trajectory for Minor wave 1 is shown with a peak at the 3338 resistance level.

Case 2 is STI still in correction now forming the wave v-iv diagonal pattern and the last wave v-v will have a limited downside.  However, given the high volume on an up day, this case appears least possible than case 1.

Regardless which case, this is just the final fine detail of Elliott Wave.  Any accumulation should have started as the calculated risk is still reasonable.

Added 20th Sep 2018

STI rose to an intra-day high of 3189.31, overlapping the wave v-i if the pattern is considered an ending diagonal.  Though it pulled back but still manage to close at 3180.43, the exact value on open thereby creating a shooting star candlestick pattern.  Should see some pull back soon.  On a lesser probability, the pull back is the wave v-v of the ending diagonal for the correction since overlap occurred.  On a higher probability, the pull back is one of the sub level wave ii for the post correction uptrend.  Regardless which, the pull back is the window of opportunity for accumulation on weakness.