Supplement: Massive Jump
The STI had a huge jump today with a large gap up. I’m writing this supplement as there is a learning point for those readers interested in the Elliott Wave Principle (EWP). From the chart you can see that the STI is now forming Minor Wave iii (red). This is part of Subwave iii (brown) which in turn is part of Wave 3 (red).
According to the EWP, a subwave iii of a wave 3 (called a three of three for short) is a long wave. A three of three of three is very long. Minor Wave iii (red) is a three of three of three.
Furthermore, many practitioners of EWP note that price gaps are very significant. Notice that there is a gap in Minor Wave i (red). This is known as a breakaway gap. The large gap in Minor Wave iii (red) is an acceleration gap. Besides providing affirmation that the minor wave is of a wave three nature, the price gap indicates how much further the wave three will extend. The gap is usually in the middle of wave three, so in this case we can expect that Minor Wave iii (red) could extend to about 3165.
These are not EWP rules, but are observations of common wave patterns.