Nowadays, with all the global turmoil caused by trade wars and interest rate hikes, compounded by local property cooling measures and uncertain economic outlook, we have a jittery stock market. Although this week shows a recovery of sorts, with Subwaves i and ii (brown) being formed, the STI could still be going sideways due to the uncertainties. We need to see strong movement upwards next week to confirm Wave iii action.
It would be too early to get back into the market unless you have a strong appetite for risks. We can have more confidence if the STI rises straight above the top of Wave b (brown) at 3341 next week. Waiting for the additional 80 points up in the STI would be like an insurance.
Even if this happens we should step in progressively. If the wave count is correct, Wave 5 (red) will eventually rise above the top of Wave 3 (red). Thus there will be a lot of upside ahead.