Tuesday, December 17, 2013

Dow - Has sub-wave iii ended ?

I am a firm believer that when Dow plunges, the whole world stock indices will follow. At this moment I cannot rule out the possibility that the completion of wave (ix) of major wave (5) might be the end of the bull run for Dow that started in March 2009 from 6,547 level.   

So far Dow has completed its sub-wave i and ii of its wave (ix).

Has sub-wave iii ended ?

Possibility 1 - Not yet

Dow is currently forming the mini wave 3 of sub-wave iii as shown below. Wave (ix) may be able to last until 3rd quarter of 2014.

Possibility 2 - sub-wave iii has been completed

Dow is in the process of forming its sub-wave iv. If sub-wave iv is taking the form of a-b-c-d-e as shown below, Dow is likely to complete its sub-wave iv within 2 weeks by end of this month, latest by early January 2014. Dow may take another month, say by early February 2014 to complete sub-wave v and wave (ix). If wave (ix) has only 5 sub-waves, sub-wave i to v.

Sub-wave iv can also take the form of a 3 waves a, another 3 waves b and 5 waves c.

Under this alternative 2, Dow may be able to drag on a little bit longer until March 2014 to complete the crucial wave (ix) and possibly major wave (5) and also mega wave 1. Then mega wave 2 will begin.

However if Dow still can live on after this crucial wave (ix) turning point because of excessive liquidity, the next higher degree pullback is the major wave (6) as shown below.

Then Dow will have a long journey to go until 2015 to form its major wave (6)-(7)-(8)-(9).

I read from TheEdge that icapital.biz Bhd, a listed closed-end fund of Tan Teng Boo, had over Rm209 million cash as at 31st August, 2013, compared with the value of its investment, which stood at Rm199.6 million. In notes accompanying icapital.biz's quarterly result ended 30th August, it cites Buffett's virtues of patience, saying, "We don't get paid for activity, just for being right. As to how long we will wait, we'll wait indefinitely." I guess Tan is waiting for the collapse before doing anything.


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