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.


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