Saturday, December 31, 2022

STI Analysis -- the next peak and trough ? (112)

Continued from STI Analysis -- the next peak and trough ? (111)

FTSE STI ended the year 2022 at 3,251.32 compared to 2021 closing of 3,123.68.  That was an increase of 127.64 points or 4.09%.  it was also among the selective few global indices to end the year in the positive.  Despite that, the Elliott Wave analysis didn't change much compared to a year ago.  Elliott Wave analysis on STI still pointing toward both the positive and negative scenarios remained valid.

Magenta -- STI Positive

Though the present wave count is slight different from couple of months ago, the possibility of this positive scenario still valid as there ain't any rules violation to invalidate it.  In this scenario, there could be either STI is in Primary wave 2 still doing the Intermediate wave ((b)) or Primary wave 1 doing Intermediate wave ((v)).  As stated in the above chart, should it be Primary wave 2, the near future upside shall be limited while if it is doing the Primary wave 1, STI 3,466.23 should be broken.  While the movement of STI for past few weeks could conclude which case is the correct one, the duration factor could give some hint of it.

In the case of STI is in Primary wave 1 Intermediate wave ((v)), with Intermediate wave ((i)) took 11 weeks, Intermediate wave ((ii)) 20 weeks, Intermediate wave ((iii)) 74 weeks, Intermediate wave ((iv)) 29 weeks, Intermediate wave ((v)) is now in its 10th week.  While it is almost impossible (never seen before) for duration of Intermediate wave ((v)) to be as long as Intermediate wave ((iii)), very typically, duration of Intermediate wave ((v)) is comparable to that of Intermediate wave ((i)).  Based on this fact, Intermediate wave ((v)) probably has another 1 to 3 months of life span only.

In the case of STI is in Primary wave 2, Primary wave 1 took 105 weeks, Primary wave 2 is into its 45th week.  A sharp and deep Primary wave 2 correction should see the duration shorter than Primary wave 1 while a side way Primary wave 2 could see its duration exceed more than Primary wave 1.  Either of this case, Primary wave 2 doesn't look like could be completed within 3 months.

Hopefully, 3 months later, there should be a clear division to conclude which of the 2 cases is the correct one.  

Also note, that while the STI Positive scenario remains valid without any EW rules violation, there are couple of doubts as indicated in the above chart to case doubt on the validity of this scenario.

Green -- STI Negative

The STI Negative scenarios started with 3 possible cases (Red, Orange and Green) with one of them (Red) invalidated due to rule violation and the other (Orange) duration factor.  The last one standing (Green) has much more leeway for both rule violation and duration factor.  This case indicates that STI is now in SuperCycle wave ((C)) Cycle wave (C) Primary wave A and possibly still in Intermediate wave ((b)) as shown in the chart.  It will take a long duration to finally complete the Cycle wave (C) as it needs to complete Primary wave A, move on to wave B and C.

The SuperCycle wave ((C)) started in May 2018 with Cycle wave (A) of that completed in Mar 2020 and Cycle wave (B) done in Feb 2022.  Cycle wave (A) took 22 months, Cycle wave (B) 23 months and Cycle wave (C) is just into its 10th month.  Any thing to go by, STI probably need another at least 10 more months to complete the Cycle wave (C).  Should this be the eventual correct scenario and wave count, year 2023 would be a very bad year for STI and in this scenario, STI can and possible to break below the low of of 2009 (1,455.47).

Above is the overall picture of STI Elliott Wave analysis from 1996 in term of SuperCycle, Cycle and Primary degree for both the Positive and Negative scenario.

Lastly, did a general market analysis globally for the long term in April 2021 (refer here).  That analysis afraid still largely remain intact and valid.  The most concerning part is US market going into Grand SuperCycle correction which could last a century of duration and the decoupling between the West and Asia becoming clear cut.  All these shall be driven by huge fundamental change globally.

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