In my December 19 write up, I mentioned about how bad the KLSE markets have been during the 3 previous 'Year of Tiger' (Chinese Zodiac). Next year 2010 is the year of the 'Metal Tiger', is there a possible wave count that points to a disastrous 2010 for KLSE?I could not get any nice long-term chart that covered period from 1970 to 2009 from Bursa Malaysia. Composite Index was started in the mid 1980s. In 1960s and early 1970s, the index that was widely followed was the NST Industrial Index that was being continued later as KLSE Industrial Index, the continuity was maintained at that time. To be able to perform a wave count, I have no choice but to scan my hand plotted version, very untidy semi-log chart as shown below.
From 1970 to 1997, there are 5 major waves, wave (I), (II), (III), (IV) and (V). If the 1998 sharp drop is taken as wave A, from 1998 bottom to 2007 peak there are only 3 waves. If the current uptrend failed to move higher than 2007 peak and instead it goes lower than December 2008 low, it is possible that the wave 3 of 2007 peak formed a major wave B as shown. The formation is pointing towards an expanding triangle A-B-C where the C can go to lower than 1998's low (wave A). Based on the above wave count, the scenario of a market collapse in 2010 can not be ruled out.
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