Hang
Seng dropped 391 points on Monday and another 333 points on Tuesday for a total 3.8% drop. Singapore
STI dropped a similar 4% over two days. Dow has its confirmation 187 points drop on Monday after many
Dojis and a shooting star. When these 3 markets can not perform and have decided to move south, KL Composite Index by itself can not run in an opposite direction. I think the uptrend since March 2009 has ended. For Dow as shown below, major wave (I) has ended and major wave (II) has started. Usually the initial phase of Wave (II) can appear to be quite harmless until the sub-wave iii stage, the downtrend will accelerate and will cause panic selling.
The most optimistic wave count is as shown above. Major wave (II) may pull back to around 7500 over a few weeks before the starting of wave (III) run-up. The most pessimistic is the unlikely count of waves (I)-(II)-(III) as shown below. It marks the completion of major wave B rebound. This is unlikely because both duration and magnitude are too short to be B wave when A wave lasted 17 months. But in stock, anything can happen.
At this stage it is advisable to hold cash rather than stocks.
The most optimistic wave count is as shown above. Major wave (II) may pull back to around 7500 over a few weeks before the starting of wave (III) run-up. The most pessimistic is the unlikely count of waves (I)-(II)-(III) as shown below. It marks the completion of major wave B rebound. This is unlikely because both duration and magnitude are too short to be B wave when A wave lasted 17 months. But in stock, anything can happen.
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