STI - Updated Elliot Wave Chart
Something new shows up in my Elliot Wave chart today. It appears the new low on March 10 ( 1,455 ) has marked the end of Wave 5. That means, the bear market has bottomed and we are now into Wave 1 of a new cycle already. The recent high on March 24 ( 1,723 ) was sub-wave 3 of the Wave 1. Targets for sub-wave 4 & 5 are marked in the EW chart below:
Based on the latest wave count, I must retract my stubborn view expressed in the previous two posts. After all, RMO is getting ready to turn bullish ( blue arrow, blue candle, waiting for bullish ribbon ). What could happen is the index may retrace to Fibonacci 38.2% to complete sub-wave 4 before it heads up to Fibonacci 61.8% to complete sub-wave 5 ( which is the target of Wave 1 ). Wave 1 is usually very short followed by Wave 2 which is also very short. Wave 2 shall be a vicious sell down making people think that the bear is not gone yet. Long term investors can enter near Wave 2 target and ride through Wave 3 ( usually the longest & most profitable ). In fact, entering at Wave 2 target is much safer than trying to guess when is the market bottom. So we did not miss the boat yet despite that I could not identify the market bottom earlier ( no one ring a bell to tell you when the market bottom has arrived so it is not an easy task. If this post identified the bottom correctly, it is quite marvellous ! )
I am putting my fingers cross the Elliot Wave chart don't play me out. I can probably un-armed my CFD and turning long from now on......!
PS: Please take my view with a pinch of sault as it is not uncommon for Elliot Wave chart to have to recount. This is as accurate as what the EW chart tells me today! The market has become very tricky & difficult and so do my view has had more whipsaw too!
Labels: Market Direction
posted by Market Wizards @ March 25, 2009
Comments: 0
