Frantic Reversal
Major Wave 5 (blue) has been frantically completed, with its subwaves (in red) greatly compressed. This allows the STI to quickly reverse downwards. In all my years of doing Elliott Wave Analysis this is the first time I have seen such a wave structure. The wave counts are all valid and no Elliott Wave Principle rule is broken. The STI has been expecting a long Major Wave 5 (blue) uptrend, but Trump’s drastic tariffs have caused sudden pessimistic sentiment in global markets, resulting in the squashed waves. After completion of Major Wave 5, three subwaves, a, b and c (red) have formed. Next week we can expect further decline because there is a pennant structure (a sign of market uncertainty) after Subwave c. Since the trend before the pennant is downwards, the trend after it will also be down. Gloomy days ahead!