Capitaland (C31.SI) Review

Capitaland seems to be in a bottoming process. The Primary count is that the down move since 31 Oct 2011 is an a-b-c flat correction. The next expected wave is an up move to complete another w-x-y move. The target for this move is 2.9 (if equal to the w-x-y) or 3.2 (1.6 times the w-x-y move). Why do I say that the bottoming process is taking place? Take a look at the volume which was reducing as it headed downwards. There was relatively higher selling which looks like a blowoff selling and then, it snapped up in a capitulation. The follow through buying was lower still but importantly, the final selling was with meagre volume. This indicates that selling is very weak or has exhausted.

Capitaland Primary Elliott Wave Chart 25 Nov 2011

Let’s see how the initial move up transpires and we’ll get a good idea on the strength of that.

Alternate View

The Alternate view is that the the move down from 31 Oct 2011 is an impulsive mode down which has either ended or is going to end in the next few sessions. This would be followed by a corrective move up and the selling would continue thereafter.

Capitaland Alternate Elliott Wave Chart 25 Nov 2011

 

S&P 500 Review 25 Nov 2011

The minimum target of 1159 has been met. Looking at the hourly chart, it appears that either Micron [5] has ended or wave 4 of Micron [5] is panning out. Therefore, the market could turn up from here or there could be one final push down to 1153 before the market turns up. Either way, my feel is that the Subminuette iii is completed. The next expected move is Subminuette iv which is expected to be horizontal rather than a spike up and spend some time as the down move has been quite rapid.

Subminuette ii retraced a large portion of Subminuette i so I expect Subminuette iv to retrace only 38.2% of Subminuette iii. The target for this is 1205 which gives a possible gain of 50 points. But it is very dangerous to trade waves four so it is prudent to wait a while more as it could turn down quickly to start on Subminuette v. I have two charts here. The first is the daily chart which shows the bigger moves. The second one is the hourly chart with the details.

S&P500 EOD Daily Elliott Wave Chart 25 Nov 2011

S&P500 EOD Elliott Wave Chart 25 Nov 2011

Alternate View

The Alternate view is that this down move completes Minute [x] which is a corrective wave and the next expected move is Minute [y] with a target of 1371. 1371 is with the assumption that Minute [y] = [w]. This is also depicted in the above charts.

Taking a look at the move down from 1292 since 27 Oct 2011, it looks impulsive with waves 1, 2 and 3 completed. Analysing it further, reveals that wave 1 was stronger with higher volume compared to wave 3 which was relatively gradual compared to wave 1. Normally, wave 3 should be the strongest. Thus, wave 3 is without volume confirmation. This lends a major support to the Alternate view.

The next expected move is a upwards move. The character of this move will reveal whether this down move is sustainable or has it hit a temporary bottom.

S&P 500 5 -Year Chart

Keeping a tab on the longer term views helps to put things in perspective. Here’s the Primary and Alternate longer term charts.

Primary view is that we are in Minuette (a) of Minute [c] of Minor D with a target expectation of 1000.

S&P500 5-Year Primary Elliott Wave Chart 25 Nov 2011

The Alternate view is that we are in Minute [x] (or have completed Minute [x]) and are going to embark on Minute [y] with target expectation of 1371.

S&P500 5-Year Alternate Elliott Wave Chart 25 Nov 2011

Straits Times Index (STI) Mid-Week Review

The STI has been going down together with the S&P 500 in an almost similar fashion. I believe that the end of the downtrend is in sight. Let’s look at the charts.

The Primary count that I had previously which called for an impulsive up move is not valid anymore as the STI has moved too deep and invalidated that move.

The previous Alternate count 1 has now become the Primary count and this is depicted in the below chart. The move up from 4 Oct 2011 is an a-b-c corrective move which completes the Minor A. The down move that followed Minor A is Minor B which is either a double zig-zag or a flat. This will be followed by Minor C.

23 Nov 2011 Primary Elliott Wave Chart

Alternate View

The Alternate view is a bearish view and in this count, the down move is depicted as an impulsive move. The labelling denotes this as the early phase of Intermediate (3).

23 Nov 2011 Alternate Elliott Wave Chart

MACD

MACD is clearly heading down but there is no twin peak type of divergence so there could still be one leg up to form that second peak.

Volume

The selling volume in the early part of the down move was higher and now selling has dropped drastically. This indicates waning selling strength. Unless the selling volume picks up, this downtrend will likely pause here or even start to trend up.

Bottoming Process

The STI gapped down this morning by about 20 points and has since closed the gap. This is a good indication for the bulls but the STI may still head a bit more lower from here. Watch the move for the day. If after closing the gap, the STI moves lower but does not hit the 2659 which is the low of the day set so far, and moves higher from there on, this would indicate a bottoming process.

If the low of the day (2659) is broken, that might be the last leg down.

Also, it is important to see the character of the move up and down. If the move up is impulsive which is what it looks like right now and the move down is corrective, that is also a bullish sign.

I’ll try to update again later today if time permits.