KLCI gained 21 points (+1.25%) on Tuesday after Fitch Rating Agency maintained its rating for Malaysia's 'long-term foreign currency issuer default rating' (IDR) unchanged at A- and local currency at A, with outlook revised upward from negative to stable.
My wave count for KLCI remained the same, it is having its wave (ii) of major wave 5 correction.
Option 1 - With the surge, it is possible that KLCI has completed the wave a of its wave (ii) and wave b rebound has started. I am looking for about 100 points rebound for wave b.
Option 2 - Since the down trend in the last 3 months has formed 7 waves, it may be unlikely in view of the 1MDB and UMNO problems, but technically there is this possibility that wave (ii) has ended and wave (iii) has started.
And if I take into account that Dow is heading for a 12% correction to 16117 level, the option 2 mentioned above looked even more unlikely, unless my reading for Dow is wrong and Dow is not forming its major wave (6) at this moment.
The focus now is on Greece's Referendum on Sunday, 5th July, to decide whether the people of Greece will accept or reject the proposed bailout offer. If the outcome is 'no' to the bailout, Greece will have no choice but to leave the EU and to revert its currency from Euro back to 'Greek Drachma'. This is going to be a disastrous outcome for Greece.
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