Happy Chinese New Year 2014

To all my friends and all visitors to my blog

.

FBMKLCI

Following the 2% drop by Dow on last Friday, Nikkei 225 and Hang Seng dropped more than 2% on Monday.

Singapore STI dropped only 1%, Malaysia FBMKLCI dropped about 1.3%.

On last Friday, German Dax and French CAC 40, that closed their tradings ahead of US, dropped 2.5% and 2.8% respectively. FTSE dropped only 1.6%.

To catch up with the rest, FTSE has dropped about 3% at this moment, whereas Dow, Dax and CAC 40 dropped about 0.5%.

As usual, US market is the 'Taiko' (Big brother). It is up to the rich and powerful in US to decide when the assets bubble will burst and I believe they will try to hold on to the assets bubble as long as they can and they will try to look for an alternative outlet if possible.

Refer to my yesterday posting, we are lucky if the current correction for Dow is about 7% (15400 level) or 11% (14750 level).

FBMKLCI

My long-term reading for FBMKLCI remained the same, mega wave (1), (2), (3) and (4) and major wave 1 and 2 as shown below.

With today's 1.3% drop, the current correction can no longer be sub-wave iv as I have mentioned in my earlier articles. It is possible that sub-wave v and wave (v) as well as major wave 3 has ended if major wave 3 has only 5 waves.

If major wave 3 has ended, then the current correction has to be major wave 4. I am looking at a 16% pullback for FBMKLCI to 1570 level within the next 6 months

However if major wave 3 has more than 5 waves, then the current pullback can be wave (vi) correction, about 6%. That will bring the index to 1750 level, another 28 points drop.

Summary


The current pullback can either be
1. Wave (vi), 6% correction if the index can hold above 1750. Or
2. Major wave 4, 16% correction. Or
3. Something else.


.

Dow - wave (ix) has ended

Dow dropped 318 points or about 2% to 15,879 on Friday. With this sharp drop, the current pullback can no longer be the mini-wave 4 correction as mentioned in my previous posts.

A revised wave count is as shown above. It is more likely that wave (ix) has been completed. It is also possible that major wave (5) has also been completed unless major wave (5) has more than 9 waves.

If major wave (5) has more than 9 waves, then the current drop is wave (x) and it is likely to stop at 15,400 level, another 500 points to go, nothing to worry if it is wave (x).

However, it is also possible that major wave (5) has only 9 waves and it has ended, especially if Dow goes below 15,400. Under this scenario I can see two possible outcomes.

Possibility No. 1 - Mega wave 1 has 9 major waves.

Mega wave 1 has more that 5 major waves as shown below. The current sharp drop is the major wave (6) and it is likely to reach 14,750 level for a 11% correction, another 1,000 points to go.

However, if Dow goes below 14,750 level, it is possible that the bubble has burst.

Possibility No. 2 - Bubble has burst. 


Mega wave 1 has only 5 major waves and has ended as shown below.

Mega wave 2 may stop at 10,655 for a 35% drop. But if the bubble has burst, it is more likely that mega wave 2 will go to 6,547, the starting point of mega wave 1 for a 100% retracement.

Summary 

At this moment the current pullback can be

1. Wave (x) of major wave (5), Dow may drop to 15,400 level for a 7% correction.
2. Major wave (6) of mega wave 1. Dow may go to 14,750 level for an 11% correction.
3. Mega wave 2 of super wave VII. Dow may go all the way to 6,547 level for a 100% retracement. The bubble has burst.


.

Dow - Last journey for mini wave 4

Dow

Dow dropped 1% or about 170 points to 16,200 after 2 hours of trading on Thursday morning. 

Dow has broken its lower support line at this moment. The next support level for wave c of mini wave 4 is the top of mini-wave 1, the 16,097 level as shown above. If Dow goes below this level, I will have to revise my above wave count.

Farms Best Bhd (Rm 0.62)

Farms Best dropped another 3 sens to rest on top of the lower support line at 62 sens level. If it goes for 100% retracement, it will drop to 58 sens, the starting point of wave (i).


.

Farms Best Bhd

Farms Best dropped 6.5 sens or 9% to 66.5 sens today, it is a higher degree correction. It is possible that the current drop is the wave (ii) of major wave 3. If the price can hold above the lower support line, the triple ascending pattern within an up-trend channel is rather bullish, especially if the next up can break the upper resistance line with high volume, then the next up is the wave (iii) of major wave 3 of mega wave (3). I hope I am right.

Assets Bubble

Jesse Colombo has written a series of articles on assets bubble in Asean countries. Click on the following to read them.

'Why Singapore's Economy is Heading for an Iceland-Style Meltdown'.

'Malaise is Ahead for Malaysia's Bubble Economy'.

'Thailand's Bubble Economy is Heading for 1997's Style Crash'.

'Why The Worst Is Yet To Come For Indonesia Epic Bubble Economy'.

'Here's Why The Philippines' Economic Miracle Is Really A Bubble In Disguise'.

I too, also believe the assets bubble will burst one day. That is also why i-Capital is holding more than 50% of cash. The question here is when will the bubble burst? 1st half of 2014?, 2nd half of 2014? or in 2015? or 2016? How high Dow and FBMKLCI can go before the bubble burst?

These are questions that can be answered only when the bubble ultimately burst.

Bernard Baruch (1870-1965), a multi-millionaire through stock market operation, once said, " ..... what actually registers in the stock market's fluctuations are not the events themselves, but the human reactions to these events. ........ in another words, the stock market is people. ..."

The stock index moment is the result of people's reaction (judgement, hopes, fears, greeds, optimism, pessimism, etc, etc) to changes in economic/financial policies, political events, economic data and any other news that affect the market.

Based on the belief that human nature does not change, nor does its pattern, Elliott discovered the repetitious phenomena in chart patterns in both bull and bear markets. So hopefully the repetitive chart patterns can provide hints or warnings when the bubble is about to burst.

Dow dropped 142 points (0.8%) to 16,316 after 2 hours of trading on Tuesday morning. It is likely that this is the wave c of mini-wave 4 as shown in the chart above.

Farms Best, KSL Holdings and Land & General

Farms Best Bhd (Rm 0.73)

Farms Best gained 6 sens (9%) with very high volume. Mini-waves 3 of sub-wave iii of wave (iii) has started. Hopefully it can break its upper resistant line tomorrow with high volume at around 78 sens level.

KSL Holdings Bhd (Rm2.30)

KSL is about to finish its wave (iv). Its wave (v) run-up is about to start.

Land & General Bhd (Rm 0.48)

Land & General is either forming the sub-wave vii of its wave (iii) of its major wave 3 as shown below.

 

Or it is forming the wave c its wave (ii) as shown below.

.

Dow and FBMKLCI

Dow

Dow is either forming its mini-wave 5, which can be completed by end of January or early February

Or it is forming the wave b of its mini-wave 4. Under this possibility, mini-wave 5 can only be completed by mid February.

For both cases, mini-wave 5 is likely to reach 17,100 level. If mini-wave 5 is the end of sub-wave iii, the following sub-wave iv may have a 5% or about 1,000 points pullback as shown in the following chart.

For the above cases where sub-wave iii has only 5 mini-waves, sub-wave v may end by late April or early May. And if that is also the end of wave (ix) and major wave (5) and the mega wave 1 as shown above, the worst case scenario for mega wave 2 correction is the 100% pullback to the 6,547 level for Dow. The bubble has burst.

However, if sub-wave iii has 9 mini-waves as shown below, the mini-wave 6 correction is likely to be about 400 points to be followed by mini-wave 7,8 and 9, the starting of mega wave 2 correction may be postponed to July or August.

FBMKLCI

Sub-wave iv correction may be completed by next week to be followed by sub-wave v of wave (v). The next question is whether wave (v) has 5 or 9 sub-waves.

.

Dow Vs BDI

Baltic Dry Index (BDI), a shipping and trade index that measures changes in the cost to transport raw materials, has dropped 40% within a month from 2337 to 1395. The last time BDI dropped sharply within a short period was from mid-October 2011 to early February 2012. It dropped 70% within 3.5 months as shown by the chart below. In fact, Dow gained 10% within the same period when BDI dropped 70% and Dow continued to climb when BDI moved side way at the base.

Since the introduction of the QE programs by central bankers, Dow's movement has been dictated to a greater extend by the liquidity in the market.

Dow

Dow dropped 180 points (-1.1%) on Monday. This sharp drop confirmed the previous high as mini-wave 3 as shown below.

If sub-wave iii has only 5 mini-waves, Dow will have one more run-up, the mini-wave 5, before the higher degree sub-wave iv correction starts.


.

You are soooooo cute

When everybody are boiling over toll rate, petrol price, electricity tariff, transportation costs, and their domino effects on food and services in general.

He opened his mouth finally.

"Today I read in the newspaper that  ............ The price of kangkung increased before this and now it has gone down."

"When this happens, they don't want to praise the government. But when it rises, they blame the government.......… This is not fair as it is due to weather conditions'.

"Price of vegetables changes according to weather conditions."



.

Dow, FBMKLCI, KSL and FACB

Dow

Dow moved side-way in the last 5 trading days. The 2 possibilities that I have mentioned in my previous Sunday posting remained the same as shown below.

Dow is either forming its small wave iii of its mini-wave 3.

 

Or it is forming its mini-wave 4.

FBMKLCI

FBMKLCI is either continuing its sub-wave iv in the next two weeks,

Or if there is a Chinese New Year run-up, last Friday's low can be the mini-wave 2 of its sub-wave iii.

KSL Holdings Bhd (Rm 2.44)

KSL's chart looks bullish with high trading volume last week. If it continues to consolidate in the next few days, then it is forming its wave (iv).

However, if can move higher next week, then it is forming the sub-wave iii of its wave (iii), very bullish.

If KSL continues to move higher in the next several weeks, I believe its 4th quarter (Oct - Dec) earning may exceed 17 sens a share, giving a total of more than 63 sens a share for the whole of 2013. 

FACB Industries Incorporated (Rm1.35)

FACB's chart looks bullis. If it can close above Rm 1.38 tomorrow, then it is forming its sub-wave iii. With a cash backing of Rm 1.77 per share, its price should not stay below Rm 1.77.

 .

This MM is not that MM

Marina Mahathir,

“We have celebrated the Gregorian new year for ages. So how did it suddenly become a Jewish celebration?"

“We have wished our fellow Malaysians the best during all our festivities. So how did it suddenly become a threat to our faith? Or is our faith so fragile that it can hardly withstand anything?”

.

KSL Holdings Bhd

KSL Holdings Bhd (Rm2.43)

KSL gained 6 sens to closed at Rm2.43 today. By now it is quite clear that it is forming its major wave 3.

 

For the first 3 quarters, KLS earned 47.35 sens per share. If it can make another 17 sens a share for its last quarter ending December, it will make 64 sens a share in 2013. Net assets per share is Rm3.34. Even with a Price/Earning ratio of 5, its stock price should be at least Rm3.20

If KSL continues to move higher tomorrow and can stay above Rm2.50 at the close, it is likely that sub-wave iii of wave (iii) has started as shown above.

And if KSL starts to move lower tomorrow and continues to move lower next week, it is more likely that the current pullback is its wave (iv) as shown above.



.

Thank You Sir Run Run Shaw

It is very likely that the first movie that I watched in the cinema with my mom and dad  in the 1950's was from you.

It was while I was watching your TVB show from Astro that my wife told me that you has passed away.

Along my journey from a small kid in the 1950's to today's old Apek, your cinema movies, TVB shows, film stars and songs were always there for me to spend my time alone or with my parents, brothers and sisters, schoolmates, friends, my wife and children during weekend, long school holiday, Chinese New Year ........ dating :) ..... when I was happy or moody or boring.

 Hard to imagine how my life would be in those days without Shaw Brothers and TVB.

 Thank You 

for all the happy hours 

and entertainments.

.

.

3 Cash-Rich Companies

FACB Industries Incorporated (Rm 1.35)

Its net cash in-hand is Rm 149 millions, equivalent to Rm 1.77 per share of cash. Its last quarter earning is 76.64 sens per share. Main bulk of its profit was due to gains from disposal of properties. Its net assets is Rm2.61 a share.

FACB moved from Rm1.26 to Rm1.35 within two days with high volumes. It is likely that wave (iii) of its major wave 5 has started.

Land & General Bhd (Rm0.465)

Its net cash in-hand is Rm267 millions, that is 42 sens per share. Besides the cash L&G has 1,009 hectares of rubble and oil palm estate in Ulu Selangor and other development land and properties.

Its last quarterly earning is 3.86 sens per share. Net assets per share is Rm0.75.

L&G gained 3 sens today to put on a solid green candlestick.

It appeared to me that the mini-wave 3 of its sub-wave iii of its major wave 3 has started.

Pan Malaysia Corporation Bhd (Rm0.23)

PM Corp has Rm139 millions cash with little borrowing. Cash per share is 20 sens. It has businesses and other assets in Malaysia, Singapore and Hong Kong.

 

PM Corp gained 1.5 sens today. Its last quarterly earning is 3.22 sens a share. The high profit is due to an exceptional gain of Rm21.58 millions arising from disposal of properties. Its net assets per share is 48 sens.

 

The wave count for PM Corp is as shown above. Has the correction ended ? The pullback can either be the major wave 6 or the wave A of mega wave (4). The next rebound is either the major wave 7 or it is the wave B of mega wave (4).


.
.

Weekend Review - Dow, FBMKLCI and KSL

Dow

If the current pullback for Dow is a minor correction, a very minor wave ii of mini wave 3's correction, then Dow should continue to set new records next week. Sub-wave iii will be able to last until May or June.

If Dow failed to move higher next week, it is possible that a higher degree correction, the mini-wave 4 correction has started as shown below. Sub-wave iii may end in February to be followed by sub-wave iv and v.

FBMKLCI

There is not much changes to FBMKLCI, it continues its journey to complete its major wave 3.

It is forming its wave (v) as shown below.

FBMKLCI so far has completed its sub-wave i, ii and iii of its wave (v). Sub-wave iv is being formed, it may take another week or two to complete unless the 31st December high of 16,576 is not the end of sub-wave iii.

KSL Holdings Bhd (Rm 2.33)

KSL started to move higher with high volume last week. It looks like wave (iii) of its major wave 3 has started.

It has started to pull away from the 'neckline' of its 'inverted head and shoulder' formation.

KSL has reported very good earning for its last three quarters. Its earning per share for its 1st, 2nd and 3rd quarters are 12.39 sen, 17.26 sen and 17.70 sen respectively. If it can report another 17 sen for its last quarter ending December, its earning per share for 2013 will be 64.35 sen. Its net assets is Rm 3.34 per share. At Rm 2.33, KSL is definitely a value buy for me.