The current uptrend since early March 2009 for Dow and KLCI appears to have reached temporary tops based on Elliott's wave count as shown by the two charts above, unless there is a break out to above the fifth wave for an extension for both of them, this is possible but I think the probability is low, the technical indicators have been staying at the top for too long. At this juncture it is good to recap the long-term wave count for Dow and KLCI to have a clearer picture.
Dow has a very long record. Same chart as shown in my older posts, the 1929 Great Depression is the Major Wave (II) correction. The current bear market caused by the US financial crisis has ended the Major Wave (III) and started the Major Wave (IV) correction. Since (II) is a simple sharp (-89%) and short as shown, based on "Rule of Alternation-Elliott", (IV) is expected to be shallow (-50%) and long A-B-C-D-E correction. Wave A took 17 months to complete. Wave B started in March 2009, hopefully it can last until end of 2009.
KLCI was introduced in the 1980's, the record is comparatively short. It was unfortunate that KLSE had discarded the Strait Times Index with 1960's and 1970's records. In the early 1970's there was a big market correction. Since then the recent big correction was the 1997-1998 Asian Financial Crisis bear market as shown below.
Since the 1998 bottom, KLCI has moved in three major up-trend waves until January 2008. Because the 2008 pullback has gone below the top of wave 1, according to Elliott's Wave Principle, the January 2008 peak can either be (a) wave B or (b) sub-wave i of wave 3. Since we are currently in a financial crisis that was ranked second to the Great Depression, option (a) is more likely. KLCI is currently in a Major Wave C, most likely the March - April 2009 rebound is the wave 2 of C. To tie in with Dow, this 2 of C has to be complex in order to have a longer duration.
The current uptrend since early March 2009 for Dow and KLCI appears to have reached temporary tops based on Elliott's wave count as shown by the two charts above, unless there is a break out to above the fifth wave for an extension for both of them, this is possible but I think the probability is low, the technical indicators have been staying at the top for too long. At this juncture it is good to recap the long-term wave count for Dow and KLCI to have a clearer picture.
Dow has a very long record. Same chart as shown in my older posts, the 1929 Great Depression is the Major Wave (II) correction. The current bear market caused by the US financial crisis has ended the Major Wave (III) and started the Major Wave (IV) correction. Since (II) is a simple sharp (-89%) and short as shown, based on "Rule of Alternation-Elliott", (IV) is expected to be shallow (-50%) and long A-B-C-D-E correction. Wave A took 17 months to complete. Wave B started in March 2009, hopefully it can last until end of 2009.
KLCI was introduced in the 1980's, the record is comparatively short. It was unfortunate that KLSE had discarded the Strait Times Index with 1960's and 1970's records. In the early 1970's there was a big market correction. Since then the recent big correction was the 1997-1998 Asian Financial Crisis bear market as shown below.
Since the 1998 bottom, KLCI has moved in three major up-trend waves until January 2008. Because the 2008 pullback has gone below the top of wave 1, according to Elliott's Wave Principle, the January 2008 peak can either be (a) wave B or (b) sub-wave i of wave 3. Since we are currently in a financial crisis that was ranked second to the Great Depression, option (a) is more likely. KLCI is currently in a Major Wave C, most likely the March - April 2009 rebound is the wave 2 of C. To tie in with Dow, this 2 of C has to be complex in order to have a longer duration.
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