When to confirm STI bear?

I have been thinking for a while what title to put for STI today. At first I wanted to discuss abour wave count. However, I hessitated because there is not enough information to decided at which point STI is.

If you look at the wave, one possibility is that it has completed a 1st wave down followed by an abc up (2nd wave), then a 1st and 2nd of 3rd and now is in process of 3. If this is the count, the pull back might only retrack the third wave by 38.2% base on Fib numbers. The target up would be around 2,880, and it has not completed the third of third of A wave.


Fig 1 STI Daily Chart
Looking at the chart, first thing that comes to my mind is the 89 days moving average which is now resistance at 2,866. I mentioned in my last entry that STI has to visit this movign average before retracing, I was actually in a little bit of surprise when I saw STI just skipped all the way there the next day. It seems to be congesting at this moving average for the time being.

Both the RSI and Stochastic has indicated that STI is in the over sold region, reaction from Stochastic is stronger this time round, it is reversing. I told the lady at the coffe shop this evening that STI should be reversing again tomorrow, it seems like my words might come true.

So the next question is: Has STI reversed?

Answer to this is not as straight forward. Base on wave count, I would personally think that it has reversed with a major counter wave. Further more, it has broken the trendline support (in orange). The uncertainty is that no confirmed pattern or symptom of reversal measurement. There is a possibility that STI is in correction mode, this provided that my wavecount is wrong.

So when will there be a confirmation of trend reversal? When STI crosses 2,667 to create a non-failure swing. It is also possible that STI is in process of top formation, looking at the shape, it could be doing a head and shoulder. With this scenario, STI will hover at 2,667 before rebounding up for a right shoulder.