Recently, STI, HSI and DJI are side trending, it is getting difficult to trade. The indicators are giving mixed signal, confusing entry and exit. From TA prospective, they are 2 school of taught. The Science part where everyone uses the lagging indicators. The Art part where you use your imagination to spot patterns.
However, for wave theory application, it has been widely documented and indicated clearly the methods.
The Elloit Wave Theory, the Tubbs and Wyckoff Method are the most popular adopted and practice. In general, the performance chart of DJI, HSI and STI - are correlated.
Something that you need to know, Fibonnaci , Gann and Wave patterns are all prediction tools invented many years ago, it uses the law of nature numerical theory for prediction purposes. If you read more, you will find it very interesting and mythical.
In order to plot the waves patterns, I uses
- Weekly/monthly chart to simplify the analysis.
- High/ Low of Dow Theory
- Fibonnaci Retracement
- Lastly, those length of wave measurement, correction, accumulation, distribution terminology.
For this exercise, I am focusing on the bigger wave for simplicity.
How to read?
- Wave A, B, C are the down trend formation.
- Wave 1,3,5 are the Up Trend Formation.
- Wave 2,4 are the Side Trend Formation.
Interestingly, waves formation can be seen after it happened. If you believe in those wave formation, then we should be in correction wave 4 and
What are we waiting for?
- A formation of wave 5 - STI must breakout at (23%) 3272
- A false wave 5 - if STI breakout at (38%) 2925 and hit (50%) 2650. = Wave A Formation happening, indicating start of downtrend.
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