Thursday, September 29, 2011

Dow - Has wave 1 of C ended ?

Stock rose on Thursday after Germany's Lower House has approved new powers for the Euro's crisis fund. Dow added 226 points, about 2% to 11,237 after 45 minutes of trading.

Dow is close to break out of its upper resistance line of its down trend channel. If it failed to break the resistance line, it is likely that the current rebound is the mini wave (ii) of the sub-wave v of wave 1 of major wave C.

However if Dow is able to break the upper resistance line as shown above, the last low can be the end of sub-wave v and also wave 1, wave 2 rebound has started. This possibility has a lower probability as the magnitude of the sub-wave v is rather small unless it is a failure v.


Wednesday, September 28, 2011

Bursa malaysia - still in major wave C

I have been trying hard to come out with a more optimistic wave count in view of the recent strong rebound and the more optimistic mood in Europe, but I was unable to come out with anything other than the one as shown below.

From the 2009 bottom to 2011 peak, I can get only three waves no matter how I tried. It has to be a B wave and the pullback sine January is too deep to be a wave iv, it has to be the major wave C.

KLK's price movement was rather interesting. It appeared that someone has been supporting the price for a certain reason. It is either for the purpose of distribution as shown in the OBV chart or there are some corporate exercise pending announcement. In the last two months its price has been maintained at around Rm 21.50 level.

From the above trading detail, price manipulation is very glaring.


Tuesday, September 27, 2011

Dow - mini wave (ii) of sub-wave v rebound

Optimism that European leaders will put in more effort to tackle the debt crisis sent global stock markets to a higher lever.

Dow takes the opportunity to have its mini wave (ii) rebound. I expect the rebound to end very soon. I am looking at the 10,000 to 9,600 level as the possible place to end the sub-wave v and wave 1 before a more meaningful wave 2 rebound. Dow gained more than 200 points at this moment.

German DAX gained close to 5% to 5,600 to form its sub-wave iv at this moment. After this rebound, it is expected to move down to 4,500 level to complete its wave 3.


KLK surprised me by moving to Rm 20.40 at the close of today trading. I don't expect it to move above its neckline of Rm 20.20. I suspected some manipulation of its price. A check on the transaction details revealed that its price was indeed being manipulated during the last 1o minutes of trading.

Batu Kawan that holds 47% of KLK is also forming a 'Double-Top' reversal pattern same as KLK but its rebound today remained below its neckline of Rm15.00. It is possible that it will move up to touch the neckline for the last time before it continues with its decline to Rm 12.60 level.


Monday, September 26, 2011

Bursa Malaysia

Bursa Malaysia Composite Index (FBMKLCI) dropped 34 points or 2.5% to 1331. Some of the investment houses started to turn bearish.

I always prefer to look at the Industrial Index that is more inline with the Dow rather than the Composite Index.

The Industrial Index dropped 64 points to 2,462 for a 2.5% drop. The major wave C that I have been talking about, is quite well behaved, I expect it to drop to at least 1,800 level before the end of 2012.

Kuala Lumpur Kepong

Kuala Lumpur Kepong has been holding up very well due to high CPO price. Today, it finally punched through its Rm20.20 neckline to form a very bearish 'Double-Top' reversal pattern to confirm the downtrend. The short wave 5 can be considered as a failure wave. It also marked the completion of the major wave (V).

The mega wave (2) has started with a short-term minimum price target of Rm17.50, based on the 'Double-top' price projection.

If Dow's major wave C is heading for 5,000, I will expect the commodity prices to drop at a very fast pace, the price of CPO will drop in tandem with the Soybean price. KLK price may drop to the major wave (IV) level of Rm 7.00 as shown above.


Sunday, September 25, 2011

A financial bailout ?

Courtesy of Brian Duffy
...On this particular day a rich German tourist is driving through the
town, stops at the local hotel and lays a €100 note on the desk, telling
the hotel owner he wants to inspect the rooms upstairs in order to pick one
to spend the night.

The owner gives him some room-keys and, as soon as the visitor has walked
upstairs, the hotelier grabs the €100 note and runs next door to pay his
debt to the butcher.

The butcher takes the €100 note and rushes down the street to repay his
debt to the pig farmer. The pig farmer takes the €100 note and heads off to
pay his bill at the supplier of animal feed and fuel.

The guy at the Farmers' Co-op takes the €100 note and runs to pay his
drinks bill at the friendly neighbourhood pub. The pub owner slips the
money along to the local prostitute drinking at the bar - who, in spite of
facing hard times, has always gladly offered him her ‘services’ on credit.

The hooker then rushes over to the hotel and pays off her room bill to the
hotel owner with the €100 note.

The hotel proprietor quietly replaces the €100 note back on the counter, so
that the rich traveller will not suspect anything.

At that moment the traveller comes down the stairs, states that none of the
rooms are satisfactory, picks up the €100 note, pockets it and leaves town.

...No one has produced anything. No one has earned anything. However, the
whole town is now out of debt and looking to the future with a lot more

Saturday, September 24, 2011

Dow - How low will sub-wave v go

Dow is in sub-wave v currently, if sub-wave v has the same magnitude as that of sub-wave iii, it is likely to end at 9,600 level to form the wave 1 of major wave C.

Bursa Malaysia Industrial index is falling behind Dow by one wave, it is at sub-wave iii and is currently at mini wave (iii) of sub-wave iii. At (iii) of iii it has to be sharp.


Friday, September 23, 2011

Gold - Part 1

The August 2011's high of 1909 appeared to be the end of wave 3 for gold. The current consolidation for Gold is likely to take at least a year as shown above. Wave 4 may end with a panic selling to 1400 by the end of 2012. Its next surge, the wave 5 may bring its price to 3000 by 2014. If there is no extension, that should mark the end of major wave (III). Major wave (IV) correction (50% pullback) is expected to be sharp (magnitude) and short (duration) in contrast to the major wave (II) correction that took 20 years to complete.


Thursday, September 22, 2011

World bourses tumble

Half an hour after the opening bell, Dow dropped 3%.

Before the US market opened, Asian bourses have recorded sharp losses. Hang Seng was particularly hard hit with a drop of 4.8% or 912 points. But the worst was Indonesian Jakarta Composite Index that dropped 8.88%

On the surface, it was a statement from the Federal Reserve (it sees "significant downside risks to the economic outlook") and the concern that Greece won't be able to avoid defaulting on its debt that caused the sell off. But the actual facts is, "we are in a major wave C bear run" and the sub-wave v of wave 1 has started as the sub-wave iv rebound has been completed. The next short term support level for Dow that I am looking at (end of wave 1) is the 10,000 level.

German DAX dropped about 4.4% at this moment, it is on its way to complete its wave 1 of major wave C.

French CAC 40 dropped 121 points or 4.15% to 2,813 at this moment. The index is only 279 points above its March 2009's low of 2,534. Once this level is broken, it may go to its 1995's low of 1776 level. This scenario is worst than the double dip that has been talking about by some investment houses.

After its November 2010 high of about 25,000 Hang Seng Index has dropped about 28% to 17,911.

Looking at its long term chart, the major C can go to below 10,000 level, that is another 45% to go.

Watch out for the Greece's default and its move to break away from the Euro. After Greece the focus will shift to Italy and Spain. Still a long way to go. Don't forget about the unrest in North Africa and the Middle East


Wednesday, September 21, 2011

Beijing Beijing

Went to Beijing for several days. The weather was nice, very cooling but dry. Lots of willows, many canals and parks.

The usual tourist spots, the Tien Ann Men

Great Wall, A UNESCO World Heritage Site

Bird Nest Stadium, Beijing's Olympic Stadium

Old Wudong

500 to 1000 year old trees in the Forbidden City

Kunming Lake of the Summer Palace. This 300 hectares lake is a man-made lake constructed during the reign of Qianlong Emperor as a gift to his mother. Without bulldozer and modern day excavator, working with only hoe and spade, it was indeed a great piece of work.

A corner of the oldest Mosque in Beijing (close to 1,000 year old)

Sweet tomatoes and peaches

They eat snake, beetles, centipedes, scorpions, silk-worms, etc,etc etc.

chicken pancakes, Rm1.50 each

I ordered a bowl of wantan, a tray of small meat buns (half dozen) and a big bowl of soy milk for Rm 3.50, really 'Tai Kin Kap Pian'

Our pretty, lovely and jovial tour-guide, 'Apple'

"These are not roses" she said, "you can see roses only in May, these are 'yeah chi' that bloom in Autumn".

"OK lah, believe you lah."

Feel sad to learn that the 'roses' that you have been in love for half a century are actually not roses. Sigh !!!


Wednesday, September 14, 2011

This is Malaysia


Monday, September 12, 2011

Not a good Mid Autumn Festival.

Yields on Greek two-year notes rose above 60% today, Germany may give up on Greece, preparing itself for a debt default. French banks with high exposure to Greek debt may have their credit rating downgraded very soon. The default may spreed to Italy and Spain. Bad news after bad news.

German DAX dropped about 2% at this moment. Since July, DAX has dropped about 2,500 points (33%). The rate of decline is rather sharp.

French CAC 40 dropped about 127 points or 4.3% to 2,847 at this moment. It has another 300 points to go to reach its March 2009's low of 2,534 level.

Hong Kong Hang Seng Index is equally bad, dropping 836 points (4.2%) today at the close.

Australian AORD dropped 152 points (3.5%) to close at 4,125 to pull away from the neckline of its 'Double-Top' reversal pattern. It is very bearish.

From its long-term chart, it may be heading for 2,800 level to complete its major wave C.