ewi-posted on 10 aug 2010

8/8/2019 EWI-Posted on 10 Aug 2010

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Posted: Sunday, August 8, 2010.

Bottom Line: Theres no change in our outlook from Thursday. Taiwan, Singapore and South Korea

are vulnerable to declines here, but the regional trend remains higher on balance.

Philippines Philippines Composite Index

We havent looked in on the Philippines equity market in some time. After a strong rally early in the

year, prices entered a corrective period in April and May. The Philippines Composite Index has since

thrust out of that corrective phase with a rally that is now taking on the appearance of a diagonal

triangle. Whenever we see diagonal type formations occurring during thrusts out of consolidation

patterns, we should be aware that the move is often a terminal wave occurring following a fourth (or

wave C) wave correction. The short-term outlook for the Philippines points to a possible reversal

occurring following a thrust above the diagonals upper trendline in the 3570-3600 area in coming

days.

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Japan Nikkei 225 Index

The Nikkei appears ready to move up into the 10,300 area where the corrective wave (ii) could

complete its wave count and set up a new leg to the downside.

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Australia ASX 200 Index

Fridays trading in the ASX 200 generated an RSI divergence on the daily chart, suggesting prices

are getting close to the completion of Minute wave c of Minor wave 2. Wed still prefer to see thrust

over the 4600 level to complete the wave internals and take out late-Junes Minute wave a high.

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China Shanghai Composite Index

Judging the extent of fourth waves as they unfold is a particularly difficult task for the Elliott analyst.

Whether that single dip below 2600 was enough to complete that wave, or whether a larger triangle

or flat will develop here, we simply cant tell. We do remain convinced that the downside is limited in

Shanghai for now.

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South Korea: KOSPI 200 Index

We are anticipating weakness in the KOSPI 200 to take prices back to 225 within the current

diagonal triangle. At this point, that weakness hasnt materialized. There is no additional evidence to

change our outlook at this time, though.

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Hong Kong Hang Seng Index

The trend remains firmly up in the Hang Seng index. We may need to re-assess the intermediate-

term outlook if prices move much higher. Lets see if this week generates any type of bearish

potential signals in the region.

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Singapore MSCI Singapore Index

Fridays weakness supports last weeks analysis that a top is in place in the MSCI Singapore index.

Prices held the lower Keltner channel on Friday. Well need to see that 354 level give way to confirm

the potential for a decline to 345 this month.

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Taiwan MSCI Taiwan Index

Were looking for prices to decline to 276 in the MSCI Taiwan index over the short-term. There ispotential for a much larger decline if our wave analysis on the daily chart is correct, but given the

stubborn nature of the advance, well keep our targets modest until more deterioration in the

technical picture is evident.

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India S&P Nifty Index

Our message in recent weeks for Indian equities is consistent sideways sideways sideways

and thats just how this market has behaved. The short-term technical profile suggests this sidewayscorrection could bring prices close to 5300 on the Nifty index before setting up a potential second

wave low and a bullish opportunity.

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ewi-posted on 10 aug 2010

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