For possibility (1) Dow can either (A) run up strongly with very very high volume on Tuesday or (B) Consolidate for about 3 days before running up strongly. For (1)(A) Dow's wave form is i-ii and 1 dot-2 dots as shown above, the next run up is 3 dots of iii, it has to be very very strong. The corresponding KLCI reaction to this (1)(A) possibility is as shown below.
KLCI will follow the dynamic and strong Dow's run up with a corresponding sub-wave iii of wave 3 run up. So for KLCI it is a iii of 3, similarly has to be dynamic and strong with high volume (Must buy OSK AND TA)
For possibility (1) (B) as explained earlier, Dow is likely to have a small pull back for about 3 days before going through its ceiling and moves higher strongly.
In respond to this (1)(B) case, KLCI today's closing is sub-wave iii as shown above. When Dow has a small pull back the next 3 days, KLCI will form the sub-wave iv. When Dow punches through the ceiling, KLCI will start its sub-wave v. Since the magnitudes of i and iii are the same, v has to be extended. So this sub-wave v will be as strong and as dynamic as DOW.
For possibility (2) where Dow is forming its last bear phase of 'Diagonal wave 5', as shown above Dow's last two day candles formed the short sub-wave iii and completed the wave 2 of 5. From this point Dow will move all the way back to March's low of 6547 or lower to form wave 3 of 5.
To move in tandem with Dow, KLCI's March low is not wave 2, it is sub-wave a of wave 2. Today's closing will complete 3 waves up to form sub-wave b. When Dow started to move down for its wave 3 of 5, KLCI will move down to complete its sub-wave c to form the wave 2. A new entry point for trader to move in again after selling out at the begining of the downtrend.
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