7 September 2018

More To Go

As anticipated in my last blog, the STI continued to drop. It is now heading for support at 3103. This is derived in the following way. The length of Subwave a (brown) is 3348 – 3188 = 160. If Subwave b (brown) has the same length, then it will end at 3263 – 160 = 3103. As I said, this is an Elliott Wave Principle guideline, so it is possible that the STI may drop below 3103.

My big fear is that this Elliott Wave Principle guideline may very well apply to the structure of Wave C (brown). Its first leg Subwave w (red) is 465 points long. Thus Subwave y (red) could drop from 3348 to end at 3348 – 465 = 2883. A nightmare indeed! But a guideline is a guideline.

Those who have been following my blog for some time would know that I like to look at the long term charts of the STI to check for consistency. Let us look at an updated monthly chart as follows:

The monthly chart shows that the STI is forming Major Wave 3 (blue), with its substructure formed by Wave 1 (red) completed and Wave 2 (red) in progress.

If the STI retraces Wave 1 (red) by 50% (a Fibonacci ratio), Wave 2 (red) would end at about 3068, which is close enough to 3103. So let us hope that this would be as far as the STI would drop.

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