Continued from STI Analysis -- the next peak and trough ? (53)
Global markets trend higher after US-China claimed they are moving towards agreeing on phase 1 of the trade deal in November. Do note that this has not changed the damaged already done due to the trade war. Phase 1 probably just rewind the development back 1 step. For STI, nothing has changed in term of Elliott wave analysis, neither the STI-2 nor the STI-N has been invalidated.
STI-2
Global markets trend higher after US-China claimed they are moving towards agreeing on phase 1 of the trade deal in November. Do note that this has not changed the damaged already done due to the trade war. Phase 1 probably just rewind the development back 1 step. For STI, nothing has changed in term of Elliott wave analysis, neither the STI-2 nor the STI-N has been invalidated.
STI-2
As shown above, current move up for STI is the SuperCycle wave 3, Cycle wave 3, Primary wave 1, Intermediate wave 3 for this scenario. By looking at the Elliott wave pattern thing looks "promising". The next figure above is what was being calculated by the Degree Calculator after the latest development. Again, no rules violation, the golden ratio 0.618:0.382 looks alright across all degrees also. However, examines closely, there are some doubts to conclude convincingly this wave count is the right one. Firstly, the Minor wave 2 retraced 83.8%, a very deep and rare case as most will be between 61.8% - 78.6%. This runs the risk that Minor wave 2 might not be correct count thereby invalidating Intermediate wave 2. Next, if Minor wave 2 is valid, Minor wave 3 appears to be overstretched registering an upside of 363.3% vs the norm of 261.8% (extended wave 3). This figure is not conclusive at the moment as couple of factors like change in Intermediate wave 3 will alter that number. Nevertheless, these doubts have to be kept in mind to avoid over-confident claiming the legit of this STI-2 wave count.
Another factor that should be monitored closely is the time frame. Should STI is indeed in Intermediate wave 3 now, to reach the calculated value of 3833.712 have to been completed within months. S3C2P1I1 completed from Oct 2018 to Apr 2019 (about 6 months) and S3C3P1I2 completed from Apr 2019 to Aug 2019 (about 4 months). Taking the case that I1 already took 6 months, I3 in the case of being extended will take longer duration probably 9 months time frame and also because wave 3 supposes to be the sharpest wave, it is possible to complete in 6 months time also. Hence, a duration between 6 to 9 months should be the appropriate time frame. Anything longer than 9 months will cast a serious doubts. Anything shorter than 6 months is not impossible but there must be some super positive and extremely bullish news globally to cause that kind of rocket burst.
Take the case of I2 at 3040 and to rise to 3800 for I3 is 760 points. To complete that in 3 months meaning on average there will be a 253 points jump per month. To achieve in 6 months meaning an average of 126 points jump per month. To do that in 9 months it will take an average of 84 points jump per month. From Aug 2019 to Sep 2019, the highest STI move was from 3040 to 3216, that is 176 points up. However, from Sep 2019 to Oct 2019, there was a dip of 148 points due to I2 so for I3 to make up the ground to be in line with the estimated average monthly jump, it must move up at least 378 points (126 points / month) from Aug 2019 low (3040). This will lead to in Nov 2019, STI must achieve a value of at least 3400, a 215 points more from 25th Oct 2019 closing value of 3185.53. This is the guideline STI's trajectory should move to further affirm STI-2 scenario is the correct wave count.
STI-N
As mentioned nothing has invalidated STI-N wave count despite the current upward movement in STI. The above is the wave count for STI-N scenario. In this scenario, STI is doing a SuperCycle wave 2 correction that started in 2015 and from the pattern and ratio so far, it is possible a Flat (3-3-5) structure and STI is now in the 5-wave down part. The wave 1 and wave 2 of the 5-wave down have been completed and STI is in the wave 3 part. This wave 3 part can be in the form of a zig-zag (IA-IB-IC) or a normal impulse (I1-I2-I3-I4-I5). The current upward movement is part of the IB or I2 only. Another possible case is STI could still be stuck in P2 and this should keep in mind. Thus, this means the current upward movement will be capped.
US Market
Back in 17th Aug 2019, an analysis on US market (S&P 500) was made in STI Analysis -- the next peak and trough ? (51). A recap of what was written then.
For those who know baseball will know the phase "3-strikes out". This is what happening to US market now. The ongoing correction is "strike 1". Though after this correction it might see S&P 500 recording another all times high but that doesn't change the picture, no compromise at all, still "3-strikes out".
S&P 500 all times high was 3027.98 registered on 26th Jul 2019 and yesterday (25th Oct 2019) intra-day high was 3027.39, just 0.59 points away from that high. Based on current sentiment, it will be no surprise 3027.98 will be broken soon. This precisely affirms what was been analyzed back in Aug 2019. This current upward movement and record breaking is just en route to "strike 2" of the US market. Like mentioned, no compromise at all, still "3-strikes out" !
