Dow - wave (xiv)

Dow (17,416)

Dow gained 225 points (+1.3%) on Thursday. Hopefully it has completed its wave c of (xiv).

FBMKLCI (1,782)

If KLCI continues with its sub-wave iii of wave (i) formation. I expect this major wave 5 to last until early 2017 if the asset bubble and Dow can hold on for another 2 years.

Nouriel Roubini

"The asset 'frothiness' should continue for a couple of years, then the bubble will grow, pop and there is going to be a crash "

"The equity markets are 'stretched' and they are going to become more stretched."

Click 'Mother of all asset bubbles' for the report.


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KSL - At crucial level.

KSL Holdings Bhd (Rm 2.15)

KSL moved to its upper resistance line with high volume and stopped there. Is it going to punch through and move higher to form the sub-wave iii of wave (v) of its major wave 3 ?

Or it is going to drop to Rm 1.60 to complete its wave e of major wave 4 ?

Its movement tomorrow is crucial.

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Dow - Investors worrying about slowing down in economic growth

Dow (17,387)

Dow dropped sharply on Tuesday following a surprise drop in durable-goods orders and disappointing earnings from Microsoft and Caterpillar. Investors feared that economic growth is slowing down.

Despite the 291 points (-1.65%) drop, my reading for Dow remains the same. Dow is forming the wave d of its wave (xiv).

But if Dow continues to drop further from here in the next few days, it is still possible that it is forming its wave (xiv) in another form.


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Weekend review

Crude Oil WTI (US$ 45.59 a barrel) 

If the magnitude of wave 3 is 1.618 times of the magnitude of wave 1, it is likely that wave 3's low is around US$ 43. If wave 4 is going to take more than two years with prices moving side way between US$ 43 and US$ 75 a barrel, it should benefit the world economy.

Dow (17,672)

It is more likely that Dow is forming an uptrend contracting a-b-c-d-e wave (xiv) that could last until mid February.

With ECB printing EUR 60 billion a month until September 2016 and if crude oil prices can move side way for the next 2 years, Dow may be able to continue its uptrend until early 2017.

FBMKLCI (1,803)

KLCI managed to close above 1,800 level on Friday. I hope this is the sub-wave iii of wave (i) of its major wave 5.

If this major wave 5 can last for 25 months, same duration as that of major wave 1, the uptrend might last until January 2017.

KSL Holdings Bhd (Rm 2.08)

If the asset bubble won't burst for the next 2 years, property price may be able to hold or move higher in the next 2 years, this should be good for property stock like KSL.

If KSL can break its upper trend-line next week, then its last low at Rm 1.70 could be its wave (iv).

Then its current run-up is likely to be the wave (v) of its major wave 3.

However, if it is unable to break its upper trend-line and moves lower instead of higher, then it is more likely to form a higher degree a-b-c-d-e major wave 4.

This is less bullish but the major wave 5 of mega wave (3) may see KSL reaching Rm 3.00

Karambunai Corp Bhd (Rm 0.07)

KBunai closed at 7 sen on Friday. It is about to complete the wave v of C of its mega wave (2) that has dragged for 7 years. Its OBV indicates strong accumulation since 2006.

Based on its minor wave count, Friday's 7 sens could be its mini wave 4. It might go to its 2006's low of 5.5 sens again to complete the mini wave 5 and also to complete its major 'double-bottom' reversal pattern.

The owner, Dr. Chen Lip Keong has a direct interest in 4.29 billion share (74.27%) and an indirect interest in 339 million share (5.87%) in KBunai, totaled 80.14%.

In October 2013, Dr. Chen received 2.9 billion shares valued at 11 sens to settle his personal loan of Rm 322 million to KBunai. At 7 sens he has already lost Rm 116 million on paper. Even if I buy at 7 sens I am paying 4 sens (36%) less than Dr. Chen.

This could be another potential goldmine besides PWorth if KLCI can move to 2,400 by January 2017.

I am praying very hard to whoever up there that the mini wave 5 will come and I can get KBunai at 5.5 sens, Amen.


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ECB announced latest QE

Stocks jumped after European Central Bank announced a bond buying program this morning to the tune of EUR 60 billion a month until September 2016 for a total of about EUR 1.2 trillion.

With this latest QE from ECB and if oil price can maintain around US$50-60 a barrel for the next two years, Roubini's words that "we're in an asset bubble and it won't pop until 2016" can be true. He predicts an eventual crash, but not for at least a few years.

Dow (17,813)

Dow gained 259 points (+1.5%) after the ECB's announcement. It appeared to me that Dow is going for a contracting a-b-c-d-e wave (xiv).

FBMKLCI (1,781)

KLCI added 11 points to 1,781. Sub-wave iii continues.

KLCI is forming the sub-wave iii of wave (i) of its major wave 5 of mega wave (5).

Major wave 1 and 3 lasted 25 and 28 months respectively. If this major wave 5 can last say 25 months, it is possible that KLCI will be trending upwards for the next 25 months until January 2017 to around 2,400 level.

KSL Holdings Bhd (Rm 2.00)

So, how high can KSL go if the asset bubble can last for another 2 years ?

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FBMKLCI - Wave 5 in the making ?

FBMKLCI (1,770)

KLCI gained 20 points (+1.1%) on Wednesday. The last minute push-up of component stocks has contributed to most of the gain, but when looking at the chart, this is part of the human factors that contribute to the final form of a chart.

It is very likely that major wave 5 is in the making.

Blue chips may take the lead at the beginning of the major wave 5, I hope second and third liners will follow soon.



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KSL - Wave (v) or major wave 4

KSL Holdings Bhd (Rm 1.98)

It is possible that KSL is forming its wave (v) if my original wave count is correct. Then the next up will be the sub-wave iii of wave (v) of major wave 3.

But if it moves lower instead of higher in the next few days, then it is forming the wave e of its major wave 4. It may go to Rm 1.70 again or even lower to Rm 1.60.

This is less bullish but there is still a major wave 5 to go that may bring KSL to RM 3.00.


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Dow - I am still thinking of wave (xiv)

Dow (17,320)

a) Simple a-b-c wave (xiv)

b) Contracting a-b-c-d-e wave (xiv)

c) Expanding a-b-c-d-e wave (xiv)

I hope Dow is forming its wave (xiv) and not major wave (5) or mega wave 2.

FBMKLCI (1,745)

If Dow can last for another 2 years, KLCI will have enough time to complete its major wave 5.

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Crude Oil - At the tail end of wave 3 ?

Crude Oil WTI (USD 45.39)

Crude oil (WTI) closed lower at US$ 45.39 on Monday. After completing its wave B in April 2011 at US$ 114.83 level, it took 3 years and 2 months to complete its wave 1 and 2 of C.

It started its wave 3 in July 2014. Within 7 months, it has dropped 58%.

If wave 3's magnitude is 1.618 times of wave 1's magnitude, very likely wave 3 will find its bottom at US$ 43.00 level, only another US$ 2.39 to go and that can be reached within a day.

Let's see whether the US$ 43.00 level can hold.


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Dow, FBMKLCI and KSL

Dow (17,737)

Dow is either forming the wave d of its a-b-c-d-e wave (xiv).

Or it is forming sub-wave iii of its wave (xiii) if Dow can break its upper resistance line.

FBMKLCI (1,732)

It is possible that KLCI is forming the sub-wave ii of its wave (i) of major wave 5.

KSL Holdings Bhd (Rm 2.00)

It is very likely that KSL is forming the wave (v) of its major wave 3.

Hopefully it can break its September high of Rm 2.44 (adjusted for 1:1 bonus) and reach Rm 3.00 by end of February when KSL announces its 4th quarter result.

What are the things to worry

1MDB's Rm 42 billion debts. The company failed to settle its Rm 2 billion loan repayment by 31st December, 2014. Click '1MDB' for more.

Sliding oil prices and the weakening Ringgit that may trigger a full scale Ringgit sell-off by the foreign funds, especially the hedge funds. Don't forget Mr. George Soros.


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Dow - Gained 536 points (+3%) in two days.

Dow (17,907)

Seeing a stabilizing oil price and possibility of more aggressive stimulus programs from central bankers in the Eurozone, Dow surged 323 points (+1.8%) on Thursday. Following 2 days of strong performance, it appeared to me that Dow is either forming a a-b-c-d-e wave (xiv),

Or more bullish, it has just completed the sub-wave ii of its wave (xiii). Under this option sub-wave iii is expected to punch through the upper resistance line decisively with more new record highs in the coming weeks.

KSL Holdings Bhd (Rm 1.89)

KSL moved up strongly today after the 10% interim dividend announcement. It gained 16 sens (+9%) with 3.03 millions shares traded. KSL has fixed the price of new share to be issued pursuant to the 'dividend reinvestment plan' at Rm 1.57.

Today's candlestick appeared to be the mini-wave viii of c of wave (iv). There should be one more down, the mini-wave ix. However, if the upward momentum is too strong and if it can move above Rm 2.00 (top of mini-wave vi) in the next two days, then I will have no choice but to accept today's candlestick as the starting of wave (v) of major wave 3.

Next target for KSL is to break the Rm 3.00 level. Kenanga has a fair value of Rm 3.30 for this stock.

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Who's buying KSL Warrants ?

FBMKLCI (1,716)

KLCI has completed its major wave 4 in December and has started its major wave 5. It is forming its sub-wave ii correction currently.

KSL Holdings Bhd (Rm 1.70)

KSL remains in the wave c of its wave (iv). Wave (iv) magnitude is about there. If it continues to go lower, I may need to revise my wave count for KSL.

On Monday, 63 millions KLS Warrants changed hand in an off-market deal. The seller has to be the owner of KSL. Who is the buyer ? Click 'Who's buying KSL Warrants' for the report.


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Dow - What degree of correction ?

Dow (17,501)

Hit by a 5% drop in crude oil prices and renewed fear of a potential Greek exit from the eurozone, Dow gave up 331 points (-1.86%) on Monday. Wave c of (xiv) in progress, this is my most optimistic option. If I am expecting an 8% correction for wave (xiv), Dow is expected to go to 16,500 level, another 1,000 points to go.

I am assuming wave (xiii) is not the end of major wave (5) or end of mega wave 1.

If my assumption is wrong and if the current pullback is the 15% major wave (6) correction, Dow may be heading towards 15,000 level.

Thing can be worst if this is the mega wave 2 correction.

If Dow can last until 2016

Dow (17,832)

If the assets bubble is as what Roubini has said, "It won't pop until 2016", Dow is expected to move in an up-trend channel until 2016. From its long-term chart, Dow is in its super wave VII.

So far Dow has completed wave (xii) of major wave (5) of mega wave 1 of its super wave VII. 

Please bear in mind that the mega wave 2 can drop all the way to the starting point of mega wave 1 at 6,547 level for a 100% retracement.

The run-up from wave (xii) to 17,958 until 5th December has gained 11.4%, based on magnitude achieved, it is possible that wave (xiii) has been completed. If that is true, then Dow is currently forming its wave b of wave (xiv). 

It is good to remember that there are a few other possible wave counts for Dow.

I was looking at Dow's monthly chart last night and I found that it is possible to have a slightly different wave count as shown below.

For this wave count, Dow is currently forming the wave (v) of its major wave (5). If wave (v)'s magnitude is the same as that for wave (i) of 24.6% gain, Dow may reach 19,150 level.

FBMKLCI (1,752)

If Dow can last until 2016, it is highly possible that KLCI has started its major wave 5.

KLCI has completed its major wave 4 on 16th December at 1,673 level.

Its current pullback can be the mini wave 2 of its sub-wave i of  wave (i) of major wave 5.

Karambunai Corp Bhd (Rm 0.06)

A leading tourism player in Sabah. Jewel in the crown is the 1,500 acres of land in Karambunai Peninsular which is in the process of being developed into a world-class eco-nature integrated resort.

Over in Peninsular Malaysia, the Group owns 1,363 acres of land in Dengkil, Selangor, which is being developed into a resort style mixed development known as Bukit Unggul Eco-Media City.

In October 2013, the Group has completed a corporate exercise to put the Group into better financial footing. Under this exercise Kbunai issued 2.9 billions share valued as 11 sens a share to Dr. Chen Lip Keong, a director and a major shareholder, as settlement to debts amounting to Rm 322 millions. Similarly 339 millions shares valued at 11 sens were issued to FACB to settle Rm 37.7 millions of debt.

After the exercise, Dr. Chen Lip Keong has a direct interest in 4.29 billions (74.27%) shares and an indirect interest in 339 millions (5.87%) shares via FACB.

Kbunai closed the week at 6 sens, which is 45% lower than the 11 sens issued to Dr. Chen and FACB in October 2013.

At this moment, Kbunai is forming the wave v of its wave C of mega wave (2). If it can end its mega wave (2) at 5.5 sens, it is forming a 'double-bottom' reversal pattern with very strong OBV.

From its 2-year chart, Kbunai is at mini-wave 5 of wave v.

For its quarter ending September 2014, its earning is in the red at -0.11 sens per share. Net assets per share is 15.27 sens.

From its latest annual report, the 1,500 acres of land at Karambunai Peninsular is valued at Rm18.70 psf. And its 1,363 acres of land at Dengkil Selangor is valued at only Rm 2.76 psf.

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