Dow - Another new record high

Dow (28,004)

The Dow surged to a new all-time record high of 28,004 on Friday after White House economic adviser Larry Kudlow says the U.S and China are 'getting close' to reaching a trade deal.

The new high of 28,004 is +2.2% higher than Dow's previous high of 27,398 and is above the upper trendline by +1.5%. From its daily chart, probability is getting higher that Dow's December 2017 low of 21,712 is the end of its major wave 8 and since January 2018, the Dow has been forming its major wave 9.

The wave count shown above is a very very bullish wave count - Dow is at its mini wave 3 of sub-wave iii of wave (iii). At the wave 3 of iii of (iii) Dow has to be very dynamic with an unmistakable, euphoric run with very high volume and with great magnitude, pulling away from the 28,000 level. Failure which, a less dynamic alternative wave count in the following chart is more likely, in view of the different stands between the US and China on roll-back of tariffs. Trump said that he hasn't agreed to roll back tariffs whereas the Chinese insisted that since the trade war was started by the imposition of tariffs by the US, any deal with the hope to end the trade war has to start with the roll back of tariffs, a prerequisite to the Chinese government.

This alternative wave count shows that Dow is still on its major wave 9 heading for 34,000 level, but at this moment it is about to end the sub-wave v of its wave (i) at around 28,500 level to be followed by a 10% wave (ii) correction.

Another question now is whether there is any possibility left for my previous A-B-C-D-E corrective wave count for the major wave 8?

At this height of 28,004 for the Dow, I am still able to come out with a wave count that is still looking alright for that possibility but I have to admit that this is the extreme end for wave D of the A-B-C-D-E wave count and Dow must start to drop from this level, strictly no more going up beyond 28,004. Another one to two hundred points up from this level will spell the end for this possibility.

Still looks alright for an expanding triangles with a 1.5% overshot for wave D.

FBMKLCI (1,594)

KLCI continues to form the last part of its wave C of (6).

From the 2-Year chart, there are two possible ways for CI to complete its wave C. First way is to have a rebound to 1690 level to form a wave (iv) before going lower

Second way is to have an overlapping 9-wave C with a slight rebound to 1,620 level to complete the wave viii before the final wave ix drop.

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