Market Update

Bursa Malaysia KLCI continues to hang around its historical high of 1694. It closed last Friday trading at 1688, that is only 6 points away from the historical high.

In the next few weeks until the 13th General Election is over, the market can be quite unpredictable. The Government may try to maintain the index at its current level to give people a good feeling. The main concern is who will win the election and whether the loser will create trouble.

The US market remains as what Roubini has said, "short-term bullish, long-term catastrophic". And I always believed when the US market crashed, majority of the world bourses would follow.

For Dow Jones Industrial Average, the question remains the same, " Is wave (vii) completed ? "

If it has 9 sub-waves, then sub-wave vi is in progress.

However if it has only 5 sub-waves, then Dow is going to punch through its lower trend-line to form its wave (viii) as shown below. It may drop about 8% to 10%.

After the completion of wave (viii), the next up will be the wave (ix) as show below to complete the major wave (5) by October or November 2013 at around 15,300 level based on my current projection, which is subjected to changes with additional data. Then the next question is whether mega wave 1 has 5 or 9 major waves ?

Looking at the historical chart (since 1900), I am assuming that Dow is at its super wave VII as shown below. I am also assuming the grand super wave (III) has 9 waves.

If my assumption is wrong and the grand super wave (III) has only 5 waves and it has actually ended, then Dow is currently at the initial phase of a 1929 type of great depression.

This is when people started to realize that the free printing of money by all the central banks won't help.

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