Crash
The STI crashed very sharply on Monday 7 April and fell further the next two days to reach a bottom at 3372.38 on 9 April. It made a sharp recovery yesterday to an intraday high of 3688.19 but fell today. These were reactions to the tariff wars initiated by USA. Uncertainty remains as to what Trump will do next.
We can take a negative view that the STI had a bear market rally and will fall next week to below the bottom of 3372.38. I have taken the positive view that the market has recovered and will go up next week, although it may fall a bit first. The Fibonacci retracement ratios are shown in the chart. Wave 2 (red) has fallen below the 61.8% level which is the typical retracement for a second wave. So the STI may fall a bit further to the 78.6% level before turning upwards. Such a severe retracement is not surprising given the current volatility of markets. If the STI falls below the recent bottom, then it is indeed a bear market rally and we would hope that support will be found at the 3198 level which is the bottom of Major Subwave ii (blue) on 6 August last year.