Sunday, September 8, 2013

Dow - Major wave (6) or Game Over ?



Dow has completed 5 major waves, major wave (1) to (5). Is this the end of the run-up since March 2009,  OR it is just a major wave (6) correction ? No way to tell, the buyer's guess is as good as the seller's guess. That is why the market can exist.

Even if Dow has a strong rebound in September/October, I still cannot tell whether this is the case of 2007, game over and with a 54% drop, or it is the case of 2011, major wave (4) pullback as shown below.


It is always safer to hold more cash and less stock under such a situation until the picture is clearer. It is always better to pay a little bit of premium rather than get caught with your pants down.

If Dow failed to set a new high in the coming rebound and if it continued to trend lower, 14,000 level is where I will assess the possibility of Dow forming its major wave (6).


Bursa Malaysia

For FBMKLCI, no matter how I looked at its long-term chart over the weekend, it appeared to me that the game is no over yet.


FBMKLCI is only forming the wave 3 of its major wave (5).

It is currently at its sub-wave (iv) of its wave 3 as shown below.


The sub-wave (iv) has so far completed its wave a and b and mini-waves 1-2-3-4. The next down should be the mini wave 5

If the upwards sentiment is too strong, it can be a failure mini wave 5.



Similarly, if the downwards momentum is very strong, it can have a failure sub-wave (v) later to end its wave 3 and continue with a higher degree 15% to 20% wave 4 correction. 


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