More Downside
Since 21 Nov last year I have been predicting a sharp fall in the STI. The uptrend since early December gave a false sense of hope of a recovery. However, as stated in my blogs the uptrend was choppy with overlapping price bars, which is characteristic of a correction. It was indeed a counter-correction and we saw a big gap down on 28 Jan.
The big question now is: Where will be the bottom? My chart shows three dotted blue lines which are the potential bottoms. The line at 3144.07 is the bottom of Minor Wave a (brown). In a flat correction, it is typical that Minor Wave c will end at about the level of the end of Minor Wave a. However the downward momentum as shown by the long red bars indicate further downward pressure.
The next dotted line is at 3040.16 which is the bottom of Subwave w (brown). The completion of Minor Wave c is the completion of Subwave y (brown). It is likely that Subwave y will end around the end of Subwave w.
If the STI drops further, the next potential bottom is at 2955.68 which is the end of Wave A (blue). The end of Subwave y (brown) is the end of Wave C (blue) which is likely to end near the end of Wave A (blue). You can see some symmetry in Wave B (blue) and Wave C (blue).
What if these three dotted lines do not provide sufficient support? Perish the thought! I hope I will not have to write a blog about this happening!