While waiting for a verdict from Dow whether the bubble has burst, FBMKLCI of Bursa Malaysia dropped about 33 points (-1.85%) today to close at 1745. The index has formed a small 'Head and Shoulders' reversal pattern in the process, but within a day it has almost reached its minimum target of 1740.
Looking at the 20-year chart, it is very clear that FBMKLCI's current uptrend since December 2008 is the mega wave (5) and it has completed its major wave 1-2 and wave (i)-(ii)-(iii) of its major wave 3.
Referring to its 2-Year chart, if the index can hold around 1700 level and have a strong rebound, then the current down is the wave c of its wave (iv) of major wave 3 as shown below.
This wave count for FBMKLCI is possible only if Dow can hold around its current level follow by a strong rebound as shown below, the Option 1 scenario.
Keep your fingers crossed.
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