Dow - Major Correction ?

Dow (16,554)

Dow dropped another 115 points to 16,554 on Friday, another step closer to the 16,300 level to end the wave (xii). This wave count is only possible if the running a-b-c for sub-wave iv is agreeable and acceptable.

However, with a possible 'Ending Diagonal Triangles' 3-3-3-3-3 wave count for wave (ix), and triangles as a general rule 'occur only in positions prior to the final movement in the direction of a larger trend', chances are high that a major correction for Dow has started.

If this pullback is a major wave (6) correction, Dow is likely to end at 14,700 level for a 15% correction. Since 14,776 level is the starting point of the diagonal triangles, theoretically it is also a possible level where the major wave (6) is likely to end.

And if mega wave 1 has only 5 major waves, it is also possible that mega wave 1 has ended. Then the current pullback is the starting of the mega wave 2. This mega wave 2 can either end at 10,655 level, the end of major wave (4), for a 38% correction or it can end at 6,547 level, the starting point of mega wave 1, for a 100% retracement or 60% correction from its peak.

FBMKLCI (1,808)

FBMKLCI has punched through my projected support level of 1,825 level.

However, by drawing a parallel line to sub-wave i and ii, the 1,808 level remained within the up-trend channel. So, it is still acceptable but KLCI must move up from here to form its sub-wave v of wave (v) of major wave 3.

If KLCI instead of moving higher from its current level, it starts to fall again and goes below the 1,800 level in the coming week, then I have no choice but to accept the possibility that the major wave 3 has ended and KLCI is currently forming the wave c of its major wave 4.

Major wave 4 can drop to 1,670 level, another 138 points or about another 8% to go. From its peak of 1,892 the drop to 1,670 is about 12%, this will tie in nicely with the Dow's major wave (6) correction of about 15%. Based on KLCI, can I say that the mega wave 1 of Dow has more than 5 major waves and Dow is more likely to go for a 15% major wave (6) correction with 14,700 or 14,776 as possible ending points ?


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