STI - 200 SMA Broken
The Straits Times Index broke the 200 SMA and the gold color trendline today. Something I have hoped it will not happen.
The target for trendline violation is 2,420.
Some observations to note:
1. ADX has risen from 13 to 26 indicating the downtrend is gaining strength;
2. MetaStock system chart shows the index has entered a bearish phase beginning May 18;.
3. Eilllot Wave count for the current correction ( since April 15 ) to have 5 waves. Correction should always be 3 waves ( A, B, C ). The only reason we see 5 waves is that the entire 5 waves belong to corrective wave A. If I am correct, we will see the index bounce back at the end of Wave A to form Wave B. But after Wave B is completed, it will still have one more leg down to hit 2,420.
I will try to exit the old long on the next bounce ( Wave B ).
The target for trendline violation is 2,420.
Some observations to note:
1. ADX has risen from 13 to 26 indicating the downtrend is gaining strength;
2. MetaStock system chart shows the index has entered a bearish phase beginning May 18;.
3. Eilllot Wave count for the current correction ( since April 15 ) to have 5 waves. Correction should always be 3 waves ( A, B, C ). The only reason we see 5 waves is that the entire 5 waves belong to corrective wave A. If I am correct, we will see the index bounce back at the end of Wave A to form Wave B. But after Wave B is completed, it will still have one more leg down to hit 2,420.
I will try to exit the old long on the next bounce ( Wave B ).
Labels: Market Direction
posted by Market Wizards @ May 20, 2010
Comments: 0
