Tuesday, February 24, 2015

Dow and the Chinese Zodiac.

Chinese Zodiac

The following table is a summary of Dow's annual performance in percentage from 1946 to 2014. For example, in 1946 (Dog year), it lost 8.1%. In 1947 (Pig Year) it gained 2.2% and in 1948 (Rat year) it lost 2.1% and so on.

Since 1946, Dow gave the best average return of 17.6% during 'Sheep Year'. Next best is the 14.8% return during 'Ox Year' followed by 13.8% during 'Pig and Rabbit Year'.

Only two animals in the Chinese Zodiac gave negative average return, the Rooster with negative 4% and the Rat with negative 1.7%.

If Dow can gain 17.6% in 2015, it should reach 20,800 by 3rd February 2016, the last day of the current 'Sheep Year'. Dow gained 14.9% during the 'Horse Year' that has just ended 3 weeks ago.

However if we were to look at Dow's performance earlier than 1946, we would notice that the '1929 Great Depression' started during the 'Snake Year' and Dow recorded its biggest annual lost of 52.7% during the 1931 'Sheep Year'.

As I have mentioned before, stock market behaviour can be highly unpredictable at times. The market can plunge at the most unlikely hour when you are most comfortable and bullish. I might have presented the following projection for FMBKLCI in my previous posting but I am always on the lookout for danger signs and are ever ready to run for my life at any point along the two years journey to January 2017.

Be prepared for a failure 5. It may not happen but it can happen. Don't forget Murphy's Law. Just keep our fingers crossed and pray that wave 5 will be well behaved and can last until 2017.

Dow (18,209)

Dow closed with another new record high on Tuesday. If Dow continues to move higher from this level, then it is forming the sub-wave iii of its wave (xiii).

But if Dow starts to move lower from this level, it is forming a higher degree a-b-c-d-e corrective wave (xiv).


Sunday, February 22, 2015

Weekly Update

Crude Oil WTI (US$ 50.81)

Crude oil WTI closed the week at US$ 50.81 a barrel, resting on top of the lower support line. This could be the wave e of sub-wave ii of its major wave 4.

I am assuming its major wave 3 has ended in January and its February's candlestick is the first candlestick of wave a of its major wave 4.

Dow (18,140)

When many Asian bourses were closed for the Chinese New Year celebration on Thursday and Friday, all the three major indices in the US, namely Dow, S&P 500 and Nasdaq closed the week at new record highs.

If Dow can proceed from here to break the upper trend-line, the current run-up could be the sub-wave iii of its wave (xiii)

But if Dow is unable to break its upper trend-line, then it is on its way to form wave d and e of its wave (xiv).

FBMKLCI (1,807)

Hopefully KLCI has ended its major wave 4 in December 2014 and it has started its major wave 5 that could possibly last until January 2017.

If minor wave iv has only 3 small waves, it is possible that KLCI is forming the minor wave v of mini wave 1 of its sub-wave i of wave (i) of major wave 5.

KSL Holdings Bhd (Rm 2.24)

Finally, KSL was able to close above the upper resistance line of its flag formation.

My minimum price target for its current run-up is Rm 2.50.


Thursday, February 19, 2015

Year of the Goat - Huat Ah

Happy Chinese New Year

Statistically S&P 500 gave the best average return of 26% in the year of goat followed by 20% return in the year of pig.

Russel 2000 that measures the performance of about 2,000 small-cap stocks in the US, gains an average of 42% in goat years.

Click 'Year of the Goat best for stocks' for the report.

Only two animals in the Chinese zodiac give negative return in stock investment, the Rooster and Rat. It is important to note that the next Rooster year is from 4th February 2017 to 3rd February 2018. So, if one believes in statistic and Feng Shui, one should clear his stocks before end of January 2017 even if the market is having an euphoric run with record volume at that time. That could be the last kick before the bull took its last breath.

The next pig year is 2019, hopefully there is at least a 20% rebound before the next zodiac animal that gives negative return, the Rat, take over the stage in 2020.

Based on the above logic I have developed for the next few years a hypothetical projection for FBMKLCI as shown below.

Assuming the current major wave 5 could last until January 2017, the end of Monkey year, wave A of super wave (II) could start in 2017, in time for the Rooster year. It could be followed by wave B rebound during the Dog year (2018) and the Pig year (2019). The final wave C shack-out during the year of Rat could bring KLCI to 829 level by end of January 2021.

This is just my hypothetical projection for FBMKLCI, a technical exercise during the first day of the Goat year.

Gong Xi Fa Cai to all of you. Hopefully it is '888-Huat Ah' for all of you in the next 24 months covering the Goat and the Monkey years before the destructive Rooster comes in.


Monday, February 16, 2015

KSL Holdings Bhd

KSL Holdings Bhd -Warrant A (Rm 1.31)

KSL-WA added 6 sens and is managed to break out of its pennant formation. Very likely sub-wave iii has started. Its next minimum target is Rm 1.60.

KSL Holdings Bhd (Rm 2.15)

KSL gained 6 sens but is still remaining in its flag formation, hopefully its next surge is able to break its upper resistance line.


Sunday, February 15, 2015

Weekend review

Dow (18,019)

Dow closed the week at 18,019 level, 34 points away from its previous record high of 18,053. Whereas S&P 500 and Nasdaq closed the week with new record highs.

Dow continues to complete its wave d of (xiv). Wave d might end around 18,300 level.

However, if Dow continues to move higher and break its upper resistance line, it is also possible that Dow has already completed its wave (xiv) and is on its way to complete its wave (xv).

FBMKLCI (1,800)

If KLCI can move higher from its current level, then sub-wave iv is completed. It is also possible that KLCI may drop lower to retest the 1780 level within the next two days before starting its sub-wave v of wave (i).

KSL Holdings Bhd (Rm 2.08)

It is possible that KSL has finally completed its sub-wave ii. I hope it can start to form its sub-wave iii.

Dutaland Bhd (Rm 0.565)

Its last high at around 80 sens turned out to be the wave X of its corrective wave since 2009. I hope its last low at 45 sens on December 15 is the end of its mega wave (2).

Since 15th December, its has formed an interesting and bullish looking pattern. I expect it to drop to at lest the 51 sens level to complete its wave (ii) but I won't be surprised if it drops to 44 sens level for a 100% retracement to form a 'double-bottom' reversal pattern.

Another possibility is that it may only drop to 52 sens level to close the gap that was formed 5 days ago before starting its wave (iii).

Must monitor this stock closely.


Thursday, February 12, 2015

CLSA Feng Shui Index

CLSA (Credit Lyonnais Securities Asia) has published its 2015 Feng Shui Index forecast for the Hang Seng Index.

In 2015 Hang Seng is expected to move higher from February to June. It will move lower from July to September. Expected to rebound in October and November follow by correction in December 2015 and January 2016.

For 2012, at a glance, I would say the Feng Shui Index of CLSA is rather accurate except that the 2012's low was out by 2 months and that Hang Seng continued to move higher in the last two months .

A more detailed month to month comparison shows that 6 out of 12 months are wrong.

For 2013, at a glance, the general shape is out. A month to month comparison shows that 8 out of 12 months are wrong.

For 2014, CLSA Feng Shui Index is highly accurate. The general shape is there. Monthly comparison shows that only 3 months were wrong.

If  2015 Feng Shui Index can have the same accuracy as 2014 Index, Hang Seng will run higher from now to June (5 months) without any significant correction.


Wednesday, February 11, 2015


FBMKLCI (1,798)

KLCI is forming the wave c of its sub-wave iv of wave (i) of major wave 5.

Still a long way to go. This major wave 5 is likely to last until early 2017

KSL Holdings Bhd (Rm 2.10)

KSL is forming a bullish 'flag' pattern that is slopping upward. Once the upper resistance is broken, the minimum target for its sub-wave iii is Rm 2.40 and its maximum possible price for sub-wave iii is Rm 3.00


Sunday, February 8, 2015

Weekly Update

Crude Oil WTI (US$ 51.69)

After so many months of red candlesticks, the current February candlestick has turned green, so far so good.

It is likely that the January's low of US$ 43.58 marked the end of wave 3. If wave 4 has started, it is going to take 2 to 3 years to complete with prices moving within US$ 50 to US$ 80. This should be good for the world economy.

Dow (17,824)

Dow continues with its wave d of (xiv) if I am right.

After the completion of wave (xiv) Dow will have to complete its waves (xv), (xvi) and (xvii) to reach its next possible major turning point.

FBMKLCI (1,813)

Hopefully KLCI has ended its major wave 4 and its major wave 5 has started. This major wave 5 is expected to last for about 2 years until early 2017.

At this moment KLCI is either forming the sub-wave iv of its wave (i) of 5.

Or it is forming its mini wave iii of sub-wave iii.

KSL Holdings Bhd (Rm 2.04)

If KSL continues to drag its current correction longer, this corrective wave can be the major wave 4 of its mega wave (3).

Then it is possible that before end of February KSL is going to announce a disappointing quarterly earning for its quarter ending 31st December 2014.

Under this scenario, its price may have to move lower to complete the wave e of 4.

However, if KSL can break Rm 2.15 in the next few days, then the last low of Rm 1.70 in early January can be the end of wave (iv) and at this moment it is forming the sub-wave iii of its wave (v) of major wave 3.


Wednesday, February 4, 2015

February 4 - Li Chun (立春)

In Chinese astrology calendar, today, 4th February, is the start of spring 立春(Li Chun). Modern day astrologists consider 立春 as the first day of Chinese astrology year, the starting of  year or the year of 'Yin Wood Goat'.

But for the Chinese in general, especially the older generation, many of them consider the Chinese New Year, which is the first day of the first month of lunar calender as the starting of year. For this year, Chinese New Year day is on 19th February, 2015.

But if you are talking about 'Bazi', will appear as the 'year pillar' starting 4th February, 2015.

In the previous goat year, 2003, Dow started the year at 8,341 and ended with 10,453 for a 25% gain. If Dow can repeat its 25% gain for this year, we will see Dow at 22,270 by end of December. CHEER.



Tuesday, February 3, 2015

Dow - wave d of (xiv)

Dow (17,666)

With oil prices stabilizing above US$50 a barrel and a more positive outlook for Greece, Dow added 305 points (+1.7%) on Tuesday.

Very likely this is the wave d of (xiv) for Dow and hopefully Dow can complete its wave (xiv) in February and move on with its wave (xv), (xvi) and (xvii) in the next 6 to 7 months.

The end of wave (xvii) is another possible location for a higher degree correction.