All eyes on Dow for direction

Dow (24,688)

Dow reached an intra-day low of 24,445 losing 539 points (-2.15%) on Friday before gaining back 243 points to closed at 24,688 (-1.19%). Dow is on its mini wave 3 of C.

The 60-minute interval chart gave better details for the current wave C. Mini wave 1 has 5 waves followed by a 3-wave mini wave 2. The mini wave 3 has formed 9 small waves so far. If Dow can move higher on Monday and Tuesday to 25,000 level, then that can be the mini wave 4.

But if Dow were to continue to move lower on Monday and Tuesday then mini wave 3 has more than 9 small waves and is heading for minor wave xi-xii and xiii.

From the 1-Year chart, I have roughly put the end of mini wave 3 at 24,000 level by assuming that the wave C has only 5 mini waves. Hopefully the mini wave 5 of C can end at 23,000 level to complete the major wave 8.

Before Dow starting its major wave 9, Malaysian market as well as other European and Asian markets will not be able to have another bull run.

The important thing is to have bullets at the end of the major wave 8.

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Dow Plunged 608 points.

Concern over peak earning growth for semiconductor stocks that triggered a sell off in tech blue chips and other Nasdaq tech stocks, this caused the Nasdaq to drop 329 points (-4.43%) to close at 7,108. Dow was holding quite well near the 25,000 level until the last 90 minutes before the closing bell. Dow closed at 24,583 for a 608 points drop (-2.41%).

Instead of forming a higher degree wave ii rebound, the strong downward momentum reduced the rebound to a lower degree mini wave 2. Mini wave 3 continues to move South. Hopefully the major wave 8 can end around 23,000 level.

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Inari and Insas

Both Inari and Insas dropped with a bigger magnitude than usual today.

Inari Amertron Bhd (Rm2.05)

Very likely Inari has completed its mega wave (1). If it can hold above 1.60, mega wave (2) is likely to take the form of a side way A-B-C-D-E, a shallow but longer duration corrective wave (2).

If 1.60 support level cannot hold, Inari is likely to drop all the way to 0.90 for a simple A-B-C , a bigger magnitude but shorter duration mega wave (2).

But technically as long as Inari can hold above 2.00, it is still possible that major wave 9 has yet to be completed even though it appeared highly impossible under the current worldwide bearish market condition. For me, I definitely prefer to hold cash rather than to hold Inari stock at its current level under the current market condition.

Insas Bhd (Rm0.73)

Insas has sent a bearish signal today by setting a low that is lower than its previous low of 0.745.

Under this condition I can no longer hold on to my previous wave count that Insas has completed its mega wave (4) in 2015 at 0.60 and since then has been forming its mega wave (5).

Alternatively the 0.60 low in 2015 is the wave A of (4), the 1.17 high in 2017 is the wave B of (4) and Insas at this moment is on the wave iii of its wave C of (4). Hopefully this mega wave (4) can end at 0.60, another 18% to go.

For this solid counter with net assets at Rm2.49, net cash of about Rm300 million and with 0.95 Inari share per each Insas share plus its other businesses, I still cannot understand why its stock price can drop so low.

Is the owner going to take it private at below 0.60 and then let it be delisted by Bursa just like Petaling Tin with net assets of Rm 1.01, it was taken private at 40 sens by Chen Lip Keong and was delisted on 16/8/2018 ???

Anything can happen in stock market.

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Asian Market Under Pressure

Asian stocks were under great pressure today. Reasons given by 'Investing.com' were continuing US-China trade-war; tension surrounding the murder of Jamal Khashoggi and worries over the Italian budget. Sentiment was also affected by the close to 300 points drop in the Dow Future.

At the closed Asian bourses in general dropped about 2% to 3%. Hang Seng dropped the most at -3.08% followed by Nikkie 225 that dropped 2.67%.

At this moment the European markets are also losing ground. German DAX index is the biggest loser at -1.86% at the moment.

From their respective highs, China SSE index has dropped the most at 49.78% since June 2015's high of 5,166. HangSeng ranked second dropping 23.55% from its January 2018's high of 33,154.

From its April 2018's high of 1,887 FBMKLCI has dropped 10.06% so far. I am expecting KLCI to drop to around 1,530 level, another 10% to go.

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Hitachi Seaside Park

Hitachi Seaside Park is located 130km North-East of Tokyo.

I went there too early during first week of October and the green kokia bushes had just started to turn red.

From the internet I can see that the kokia bushes have fully turned red. What a scene that I have missed.

To see red kokia surrounded by colorful cosmos flowers the best time to visit is now, mid-October to early November.

The Park's iconic flower is actually the Blue Nemophila. The best time to see them is from late April to mid-May.

A sea of blue flowers under the blue sky.

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Weekly Update

Dow (25,444)

I expect Dow to have another run-up to complete the wave ii of C.

FBMKLCI (1,732)

KLCI is expected to continue forming its wave iii of C.

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Pinehill Pacific Bhd (Rm 0.42) - jumped 33% in one day

Pinepac jumped 10.5 sens (+33.33%) today to close at 42 sens. I have a feeling that it is forming the wave b of its sub-wave ii.

First positive point is the OBV breakout.

However, nothing can be so sure in stock market for its own survival so that no matter how bullish or bearish the market condition can go, there is always buyers as well as sellers to complete all the transactions.

It is also possible for Pinpac to go up all the way and surpass its previous high of 69 sens to form its sub-wave iii.

Under normal circumstances the land sale is going to take months to complete and there is still lots of uncertainties in front unless there is a third party trying to accumulate Pinepac in the open market to more than 33% to trigger a General offer to take over Pinepac.

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Dow surged 547 points (+2.17%)

Dow (25,798)

Stocks rally on strong 3Q earnings on Tuesday. Dow jumped 547 points. How high this current wave ii of C can go? Your guess is as good as mine. Be careful, once the wave ii is completed, the wave iii down can be very painful. 

Fintec Global Bhd (Rm 0.055)

A potential goldmine for consideration at the next market bottom. It is on its way of record breaking lows. No reversal sign yet but its OBV has shown divergence.

Fintec, previously known as Asia Bioenergy Technologies Bhd. is a technology incubation and investment holding company providing management and strategic advisory services, research related activities, business networking and funding for its incubate companies.

Besides its own non-listed companies involved in Bioenergy Technology and Oil & Gas sectors, Fintec also holds strategic stakes in several listed companies namely Focus Dynamics Group Bhd. (24.16%), Vsolar Group Bhd. (15.67%), AT Systematization Bhd. (15.06%), NETX Holdings Bhd. (11.16%) MLABS System Bhd. (11.2%) and DGB Asia Bhd. (7.37%).

Amongst its listed companies, the top performer is Focus Dynamics that operates premier food and beverage outlets. Focus stock price has moved from 2.5 sens in August 2016 to a high of 25 sens by October 2017. By August 2018 the price dropped to 12.5 sens

When Focus moved from 2.5 sens to 25 sens, Fintec reported record quarterly earnings of 10.19 sens, 4.67 sens and 4.44 sens a share due mainly to fair value gain in its investment holdings. But subsequently when Focus dropped from 25 sens to 12.5 sens, Fintec quarterly earning also dropped in tandem, it lost 7.54 sens and 5.53 sens a share in the last two quarter and its share price has dropped from 22.5 sens to 5 sens.

From the above chart one can see that the price drop for Fintec is overdone. Its fundamental is strong.

After taking into consideration of its receivable and payable, it still in a net cash position of Rm48 millions. Divided by Fintec 602 million share, that gives 8 sens a share. Fintec is holding 500 millions share of Focus, that is 0.83 Focus share for each Fintec share. Focus closed at 16 sens today. 0.83x16 sens gives 13.28 sens a share to Fintec. Plus the 8 sens of cash, Fintec is worth 21.28 sens and it is selling at only 5 sens. 

The other 5 listed companies are small and their respective share prices are quite flat.

The 2-Year Chart (% gain) for Fintec/Focus is very similar to that of Insas/Inari.

Does it mean Focus may have a run up to complete its major wave 5 but Fintec may not run, same as Insas.

Lynas

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Weekly Update

Dow (25,339)

Dow is forming an expanding A-B-C wave 8 after setting several new record highs by its wave B (very tricky). The rebound on Friday after two days of sharp drop is likely to be the first candlestick of wave ii of C. Be careful of the sharp wave iii's plunge once wave ii is completed.

FBMKLCI (1,730)

In tandem with the Dow, KLCI plunged for two days followed by a technical rebound on Friday. Sub-wave iii is expected to drop another 100 points before its sub-wave iv's rebound.

Inari Amertron Bhd (Rm2.19)

The main question for Inari is whether it has completed its major wave 9. If wave 9 has been completed then it has started forming its mega wave (2).

If major wave 9 has yet to be completed, Inari will have to complete its wave (iii), (iv) and (v) during the two to three months short period when KLCI is having its sub-wave iv rebound.

Insas Bhd (Rm0.80)

I am still maintaining my wave count for Insas that it still has a mega wave (5) to be completed and that currently its is forming its major wave 5. If mega wave (5) can have a similar gain of 200% as that of mega wave (1) and (3), the target is Rm1.80.

Can Insas complete its wave (iii), (iv) and (v) within a short span of two to three months when KLCI is having its sub-wave iv rebound?

Fundamentally Insas has the capability of doing so. Its net assets is Rm2.49 per share. It has positive earning every year. Its average earning for the last 5 years is 17 sens a share. At Rm1.80 its PE is only 10.5.

Its jewel is its 19% holding (600 million shares) of Inari. The total number of Insas share is only 663 million, that give 0.9 Inari share per Insas share. For Inari at Rm2.19, that 0.9 share is worth Rm1.97. All we need is a sudden announcement of bonus issue of Inari share to Insas shareholders. It is all up to the major shareholder Thong Kok Khee's game plan. Within seconds Insas can reach Rm1.80 with a bonus issue announcement.

If running short of time, Insas may end at its 2014's high of Rm1.32 to form a 'double-top' reversal pattern to complete its super wave I.

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Dow plunged 831 points (3.15%)

I was away in Japan since end of last month expecting the boring market to drift side way, nothing to worry. But when my plane had a smooth landing at KLIA yesterday, the Dow was having a hard landing in the US. 

What's happening? Analyst said it was due to the rising interest rate and was also triggered by the sell-off of in Tech Stocks. Microsoft fell 5.4%, Apple dropped 4.6%, Amazon fell 6.2%, Alibaba dropped 5.9% and the Nasdaq dropped 4.08%. In fact when I checked the Nasdaq's chart, I noticed that Nasdaq has already given way on the previous Thursday and Friday while I was enjoying the beautiful scenery in Japan.

Dow (25,598)

The tricky Dow broke its previous record high of 26,616 before end of September and continued to set new record highs, giving investor a bullish signal before making a U-turn to form an 'expanding triangle A-B-C'.

I have no choice but to switch back to my previous bearish major wave 8 corrective wave of 14% to 15% correction for its wave C and it is likely to end at around 23,000 level for a 14% pullback. Don't forget that it can also stop short or overshoot.

Asian Market

If Dow is bad, the whole world market will be bad. Asian dropped badly today. At the close Taiwan market dropped 6.31%, the worst, followed by China 5.22%, Korea 4.44%, Japan 3.89% and New Zealand 3.64%. Bursa Malaysia dropped the least at 1.54%.

FBMKLCI (1,708)

Similarly I expect KLCI to move in tandem with the Dow to go for a 13% correction from the top of its wave B to around 1,532 level to complete the wave C of its mega wave (6). From its today closing level of 1,708, KLCI has another 176 points (10.3%) to go to complete its wave C.

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