Dow - It is mega wave II

Wuzhen

At the close of Wednesday session Dow, Nasdaq and S&P were resting at the lower support line. After 2 hours of trading on Thursday morning, all the 3 indices have dropped 2.5% to 3.1% and have broken their respective lower support lines decisively. Unless the markets can reverse the direction and can recoup all their early losses at the close of Thursday trading session, we can safely conclude that Dow is in its mega wave II.


For mega wave II, the first 5 sub-waves i, ii, iii, iv and v have formed as shown below. So it is the case of 'Sell in May and Go Away'. A normal mega wave II will take at least 2 to 3 months to complete. The next task is to determine the wave form of this mega wave II. Will it form a shallow but longer duration A-B-C-D-E or it will take the form of a sharp but shorter duration zig-zag A-B-C ???


I expect Bursa Malaysia and other world bourses to behave the same way as Dow.


So, it is mega wave II for the Industrial Index as well. It looks like the index is at the tail-end of the first 5 sub-waves.