Supplement: Longer Term Charts
The STI had a huge drop today. I would like to show not only the Daily Chart but also the Weekly and Monthly Charts (below) so that we can see the downturn in proper context. I have coordinated the colours of the labels so that you can correlate the three charts. Since Elliott waves are fractal in nature, the wave structures are the same, no matter the time scale.
You can see from the Daily Chart above that the STI has crashed through the 2955.68 support and is heading down to the 2528.44 support. In my previous blog I mentioned that there is some weak support in the 2703 to 2740 region, which is shown as a yellow band. While there is some hope that this band will provide sufficient support, the severe momentum today is expected to bring the STI below this band.
The next support is at 2528.44, as suggested in my previous blog. The Monthly Chart is shown below. The 2528.44 line looks like a strong support as it is the bottom of the whole sideways structure since the recovery from March 2009. If this does not work, then the STI could plunge all the way down to the end of Wave A (pink) at 1455.47, which would be a nightmare. Such an event does not break any Elliott Wave Principle rule, and in fact it is a guideline (not a rule) that Wave C (pink) is likely to end near the bottom of Wave A (pink).
I dare not indicate this in the chart. Let us hope that we wake up before the nightmare hits us!