Where is STI right now?

Fig 1 STI Daily Chart

As expected, STI has completed a 5 wave down and now reversing. This is supported by its daily indicators Stochastic and RSI which created a small divergence before turning up. The move today looks spectacular with a total of 70 points distance. It is only stopped by the resistance at 2,751.

Base on the wave count, the previous wave was definitely a 5 wave pattern, so I would expect this to be a counter wave. The question is: the counter wave of which?

There are 2 possibilities, one where the uptrend of STI from March 09 till Jan10 was a 3 waves, meaning this to be the fourth wave. If this is so we should be expecting a zig zag B wave and a 5 wave C wave to follow.

A more worrying pattern would be the Mar 09- Jan 10 move was a completion of a Zig Zag B wave and this is a C wave. What we have just experience would be the 1st of the 5 wave down for C and we are now in the 2nd wave formation, which is likely to retrace back close to the peak. If this is ther case, we would have a long way to go.

Either wave, we have not finished with this down trend.