Continued from STI Analysis -- the next peak and trough ? (89)
This edition of the analysis shall focus solely on the positive scenario, STI -- ((3)) or ((5)) as there will be quite an amount of information needs to be documented. This is similar to the negative scenario so putting all down in a single edition will make the post too lengthy.
STI -- ((3)) or ((5))
Before begin, there is some correction needed to make in the previous analysis (STI Analysis -- the next peak and trough ? (88) ). In that analysis it was stated that the zigzag pattern from the rebound off 2,420.82 was the formation of a leading diagonal. Unfortunately, the concept is wrong regarding the leading diagonal. The correct concept for leading diagonal should be it appears in the 5th wave of the higher degree wave 1. Take the example if the present upward movement is Primary wave 1, then the leading diagonal can only be observed in the Intermediate wave ((v)) -- Minor degree doing 5-wave diagonal structure) and not the whole of Intermediate wave ((i)) to ((v)). Hence, the observation of the zigzag pattern casts an even bigger doubt of the upward movement is the new uptrend.
There isn't much change in the chart regarding this scenario that STI is in Intermediate wave ((iii)) of Primary wave 1. In previous analysis also stated that STI must climb to at least 3,441.749 before retreat to enter Intermediate wave ((iv)). This is not a rule but guideline but if failing to do so would cast a very big doubt about this scenario. There is reason behind that and there is a valid reference in 2016 to 2018 that illustrates this fact.
Above chart is the upward movement from the bottom of 2,528.44 in 2016 to 3,641.65 in 2018. That upward movement came after the global market crash from 2015. The breakdown of the sub-degree are all denoted in the chart. Given the duration of that upward movement, it shall be considered as Cycle degree with the 5-wave Primary degree all clearly defined.
Above is generated from the Fibonacci Calculator regarding the 5 Primary degree waves. As seen, Primary wave 3 is more than 161.8% of Primary wave 1 (243.5%) and that is considered the common wave 3 extended. To further affirm the extension, within Primary wave 3, another 5-wave in the Intermediate degree is also clearly defined. The rate at which Primary wave 3 rose was 11.08 points/week as noted in the chart. Then, believe majority of the EW analysis including myself believed that was the new uptrend given all the criteria pointing to it. Unfortunately, now we know that it wasn't really the "true" uptrend but rather part of the higher degree correction, the B wave of the A-B-C correction. Why is it so ? The low of 2,208.42 in March 2020 was lower than the starting point of the 2016 to 2018 wave and hence that invalidate the uptrend due to rule violation.
Above chart is the so-called uptrend from March 2020 till now. Ignoring the doubt that there is a zigzag pattern in Intermediate wave ((i)), the Intermediate wave ((iii)) that STI is in must display a strength that is not worse off than the 2016 to 2018 wave 3. That is to say the Intermediate wave ((iii)) must move to at least 3,441.749 to fulfill the wave 3 = 161.8% wave 1 condition. If it can be like the wave 3 in 2016 to 2018 to extended, that is the best. However, for the wave to be extended, STI must display a sub-level, Minor degree 5-wave pattern now. Unfortunately, there isn't any. All these just pointing to more doubts about this upward movement is it the "true" uptrend.
To summarize, STI continues ascending might give impression that this is the uptrend or the worst is over in March 2020 BUT there are more doubts to oppose to it. The zigzag pattern in the Intermediate wave ((i)) is unusual for a motive wave. The intermediate wave ((iii)) must climb to at least 3,441.749 before a pull back can occur for Intermediate wave ((iv)). If the so-called Intermediate wave ((iii)) is of extended type, a Minor degree 5-wave must be observed during these periods. Last but not least, even if all the criteria are met, it can turn out to be a "false" uptrend like the 2016 to 2018 case.
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