Bursa Malaysia FBMKLCI

There is an interesting article today in the Malaysian Chronicle for those interested in stock and property investment. At the end of the long article, the author has these to say :-

"As for the stock market we are saying it again. Sell and walk away ........".

"Due to the credit contraction we are expecting a continuation of decline into the next few months. Any rebound will be another bear trap and we are seeing a much lower index in the next few weeks and months. In short we are bearish !".

Click 'Malaysia's Credit Squeeze' for the full article.

All stock investors know that the asset bubbles will ultimately burst. The question is 'when' ?

For Bursa Malaysia

From the 20-year chart, the bottom for KLCI is the 1998's low. Since then it took 10 years to complete its mega wave (1), (2), (3) and (4) by October 2008.

Mega wave (5) that started in October 2008 has so far completed its major wave 1 & 2, wave (i) & (ii) and sub-wave i & ii as shown below.

The next surge will be the sub-wave iii of wave (iii) of major wave 3 of mega wave (5). It is expected to be dynamic with high volume.

Base on my wave count for KLCI, in the last 56 months since October 2008, the index has completed only half of mega wave (5) and it is about to start its more dynamic phase.

I always believe that the bull will have an euphoric crazy surge before it dies.

On the safe side I always place a stop loss level to get out, in-case I am caught on a wrong footing. At this moment my cut-loss level is 1660.

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