Frustrating Moment !
Sideways movement is the most frustrating part of the three trends the market has, namely Uptrend, Downtrend & Sideways. Unfortunately, we have one third of the time we must live with sideways movement.
Based on my Elliot Wave count, I am certain that the index will break 2,400 in the intermediate term ( unless it is a failed Wave 5 ) and probably hit 2,600 ~ 2,800 to complete wave 5 ( which is the primary wave 1 ). The only thing I am not certain is whether wave 4 target has been met or must we head down to 2,180 ~ 2,100 to complete wave 4 before embarking our journey to wave 5. Once wave 5 target is met ( Primary Wave 1 ), we should expect a vicious correction ( Primary Wave 2 ) that may bring the index back to almost the onset of Wave 1 ( 1,600 ~ 1,800, gut feel only, haven't look at Fibonacci yet ).
In the daily chart, Parabolic SAR is still in the buy phrase so that has given us some degrees of assurance of bullish bias. Based on Dow Theory, we have HL ( Higher Low ) and HH ( Higher High ) scored recently reversing the LH ( Lower High ) & LL ( Lower Low ). Therefore, 2,304 ( the recent Higher Low ) become quite important and should not be broken. If broken, then we can only hope 2,211 to hold because that is the last significant low and will mark a new Lower Low once that is taken.
Based on my Elliot Wave count, I am certain that the index will break 2,400 in the intermediate term ( unless it is a failed Wave 5 ) and probably hit 2,600 ~ 2,800 to complete wave 5 ( which is the primary wave 1 ). The only thing I am not certain is whether wave 4 target has been met or must we head down to 2,180 ~ 2,100 to complete wave 4 before embarking our journey to wave 5. Once wave 5 target is met ( Primary Wave 1 ), we should expect a vicious correction ( Primary Wave 2 ) that may bring the index back to almost the onset of Wave 1 ( 1,600 ~ 1,800, gut feel only, haven't look at Fibonacci yet ).
In the daily chart, Parabolic SAR is still in the buy phrase so that has given us some degrees of assurance of bullish bias. Based on Dow Theory, we have HL ( Higher Low ) and HH ( Higher High ) scored recently reversing the LH ( Lower High ) & LL ( Lower Low ). Therefore, 2,304 ( the recent Higher Low ) become quite important and should not be broken. If broken, then we can only hope 2,211 to hold because that is the last significant low and will mark a new Lower Low once that is taken.
Another way to look at the STI chart is a possible formation of a symmetrical triangle. Volume has been contracting and seem to support this argument. I did not originate this view but I have picked it up from my remisier which I thought make sense. The target of the symmetrical triangle points to 2,600.
Labels: Market Direction
posted by Market Wizards @ July 01, 2009
Comments: 0
