STI Analysis -- the next peak and trough ? (87)

Continued from STI Analysis -- the next peak and trough ? (86)

STI hit an intra-day high of 3,028.44 on 5th Mar 2021, exceeding the high of 3,017.15 on 21st Jan 2021 and that has a serious implication of the wave count so far.  

The implication is that there is a rule violation of wave 2 cannot exceed wave 1.  That invalidated the previous wave count.  Majority of the people thought that the worst was over in March 2020 and current upward movement is the start of the new uptrend.  Since, the previous wave count is invalidated doesn't mean it is necessary STI is indeed doing a new uptrend.  In Elliott Wave principle, there must be continuity and no conflict in all degrees (down from SuperCycle, Cycle, Primary, Intermediate, Minor, Minute to Minuette).  As such, re-looking at the whole picture again.

Above is STI performance from 1980 to 2017.  Well that was generated by my friend in 2017 but fair enough to have more data to examine the wave count instead of just from 1994 onward.  From that set of data and adding in the time frame guideline for all degrees of EW, that is the best fit to it.  1996 peak was the Cycle wave (3) and the subsequent correction due to AFC in 1997-98, dotcom bubble in 2000 and SARS in 2003 formed the Cycle wave (4).  The recovery is till peak in 2007 was the Cycle wave (5).  Each of these Cycles lasted several years as according to time frame guideline.  The question is peak of 2007 is end of SuperCycle ((1)) or ((3)) or ((5)).  That afraid can't be determine as don't have any data prior to 1980 to examine the performance.  The 2008 GFC started the SuperCycle ((2)) or ((4)) or ((A))-((B))-((C)) correction and that lasted till today or last year.  That duration is 13 years, fair enough for SuperCycle degree when it is termed as multi-decade duration.  It could be Cycle degree time frame too as Cycle degree is of several years type.  From there onward, there are lot of possibility in the wave count and will examine to see whether it is justified to conclude the huge correction has ended and a new uptrend has started.

There is a mistake that needs to be corrected in previous wave count when it was said from 2009 till 2015 it is doing SuperCycle wave ((1)) meaning SuperCycle ((A))-((B))-((C)) from 2007 to 2009 only lasted for less than 2 years, that is too short to be considered SuperCycle time duration.

STI 2007 is SuperCycle ((5))

This is the scenario when the peak in 2007 is considered SuperCycle wave ((5)) and the grand correction started then with 2009 bottom is the SuperCycle ((A)) or ((W)).  The green label from the chart above indicates SuperCycle ((B)) ended in 2018 and from then till March 2020 is SuperCycle ((C)) thereby completed the SuperCycle correction and so the recovery from then which majority believed is the bottom is the new uptrend.  However, there are some questionable based on this wave count as stated in the chart above.  

1. Wave ((C)) = 58.5% wave ((A)), way short of the minimum guideline of wave C = 61.8% wave A

2. Time frame for Cycle (A), (B), (C) for the SuperCycle ((C)) too short as each only lasted for few months when the guideline states that Cycle degree is from 1 to several years.

Therefore, it is very doubtful that March 2020 is the bottom of the SuperCycle correction and now is the new uptrend.

If it is not the new uptrend meaning despite the upward movement lately, it is still part of the SuperCycle ((C)) correction.  The red label indicates that March 2020 is just the Cycle (A) of SuperCycle ((C)) and current upward movement is none other than the Cycle (B) with the final down leg of Cycle (C) to complete the SuperCycle ((C)).

Another possibility is the magenta label in which the SuperCycle correction is a double-three combination of ((W))-((X))-((Y)).  2007 to 2009 is wave ((W)), 2009 till 2015 is wave ((X)) and 2015 onwards is wave ((Y)).  Wave ((Y)) itself is an Expanded Flat pattern in the Cycle degree as the Cycle (B) in 2018 exceeded the start of Cycle (A) in 2015.  An Expanded Flat pattern will have a 5-wave structure in its C wave meaning from 2018 onward, STI is doing a 5-wave diagonal in Primary degree with March 2020 being the Primary 3.  Current upward movement is none other than Primary 4 which is allowed to hit as high as 3,415.88 (start of Primary 2 ) but not exceeding it.  Thus even if STI continues to hit 3,300 it is still part of Primary 4.

STI 2007 is SuperCycle ((1)) / ((3))

This is the scenario when the peak in 2007 is considered either as SuperCycle ((1)) or ((3)).  This means the correction since then is SuperCycle ((2)) or ((4)).  Again, duration of 13 years is justifiable for SuperCycle degree.

From 2007 till 2009, STI is doing Cycle (A) or (W) of the SuperCycle correction.  If looking at the normal A-B-C pattern, there are 2 possible counts labeled green and red as shown in the above chart.  

The green label indicates Cycle (B) ended in 2015 and from 2015 till Marh 2020, it was Cycle (C) meaning ended the SuperCycle ((2)) or ((4)) correction and the recovery then is the new uptrend.  However, there is a major rule violation that invalidate it.  In EW, a zigzag pattern cannot have a wave B exceed start of wave A.  Here, wave B at 2018 is definitely exceed the start of wave A in 2015.

The red label negates the rule violation in the green label with Cycle (B) doing a triangle pattern A-B-C-D-E which eventually ended in 2018.  Thereafter, a clearly zigzag pattern was observed from 2018 till March 2020 meaning end of Cycle (C) (SuperCycle ((2)) or ((4)).  That paths the way for the recovery since March 2020 to be the new uptrend.  Unfortunately, some serious doubts appear for this count -- wave (C) = 58.5% wave (A), short of the minimum guideline of 61.8%.  As guideline is not rule so this count still possible to conclude the new uptrend but better be cautious about it.

The magenta label indicates a double-three combination (W)-(X)-(Y) for the SuperCycle ((2)) or ((4)) correction.  2007 peak to 2009 trough is the Cycle (W), 2009 till 2015 is the Cycle (X).  Cycle (Y) started in 2015 and is doing an Expanded Flat pattern with 5-wave diagonal of Intermediate degree in Primary C.  March 2020 was the Intermediate ((iii)) and the recovery since then was just the Intermediate wave ((iv)) which is allowed to hit as high as 3,415.88 (start of Intermediate ((ii)) ) but not exceeding it.  This is similar to the magenta case in 2007 in SuperCycle ((5)) but looking at a degree lower only.

Summary

To summarize, while there is thinking that March 2020 is the bottom and the recovery is the new uptrend, there might be a case for it (refer STI 2007 is SuperCycle ((2)) or ((4)) red label) but there are more possible cases that recovery from March 2020 still part of the correction.

Tiger Brokers Singapore Invitation Code

Singapore Covid-19

打油诗

主将无能垮三军
左士缺策只砸钱
右士辱人自被辱
左象无计只会泣
右象理人理出祸
左马略识色不分
右马讲据终慢拍
小卒仗权乱闹事
大敌当前夸本领
火烧眉头方才悟
城门紧闭称闭窗
高傲自大多借口
知错不认真懦夫