Correction Not Over?
The STI dived the first three days of the week but recovered somewhat over the last two days. From the chart it appears that Wave 2 (red) has ended and Wave 3 is beginning. However this cannot be confirmed until the STI rises above the top of Wave 1 (red). It seems to me that we are having a bear market rally and the STI likely to drop down again next week. So the label 2 (red) is tentative. As I said last week, a second wave is likely to retrace 61.8% of the first wave. Currently, Wave 2 has retraced less than 38.2% of Wave 1. (61.8% and 38.2% are Fibonacci ratios). Global economies and hence stock markets are still rather pessimistic.