Dow - 276 points drop in two days (2.5% drop)

Despite dropping a total of 276 points (2.5%) in two days, Dow remains above its lower resistance line as shown below. Wave count for Dow remains the same.


The only uncomfortable development is that the wave 1 of major wave (VII) has only 3 waves as shown below. But I still feel that as long as Dow stays above the lower resistance line, the wave (VI) remains intact.



However, the moment Dow dropped below its lower resistance line, it is more likely that there will not be waves (VI), (VII) , (VIII) and (IX) any more. The mega wave I has formed as shown below. Under this revised wave count, Dow has formed 5 waves on the down side and since the formation of 5 waves always dictate the near-term main direction of the trend, in short term Dow will be in a downward direction.



Inline with Dow, Bursa Malaysia Industrial Index has formed 5 down waves as shown below. It confirmed that major wave (V) has been formed, we can forget about wave 1, 2, 3, 4 & 5 for major wave (V) that I have mentioned previously. The index under this scenario is more inline with Dow.


The Industrial Index is either forming the wave (VI) as shown below if it can remain above its lower resistance line.


Or the index is forming its mega wave II if it moves lower than its lower resistance line as shown below.


Anyway since the Industrial Index has formed 5 down waves, the short term trend is downward bias. The main question is how far down is the down going to be and will the lower resistance line be able to hold. The Dow movement next week can be very crucial.