Sell, Not to Sell, Sell, Not to Sell...........

Hangzhou West Lake

With a 405 points (3.9%) gain for Dow on Monday, last Friday closing price of 10380 provides an important support level for the more optimistic scenario of major wave (VI), (VII), (VIII) and (IX) formation to form the mega wave I. As long as Dow stays above 10380 level which is major wave (VI), it will proceed to complete its wave (VII), (VIII) and (IX).

Under such scenario for Dow, Bursa Malaysia Industrial Index will have 5 waves for its major wave (V) as shown below. Under such wave pattern, Industrial Index has completed wave 1 and with wave 2 almost in place. The next up wave will be wave 3.


However, if Dow moves below 10380 in the next few days, one can forget about the waves being extended to 9 waves. Probability will be very high that the mega wave I has been completed, Dow is going to take a few months to complete its mega wave II. The famous axiom and also widely known as Halloween Indicator, "Sell in May and Go Away" will fit in nicely. Buy back time is in November around Halloween. See chart below.


In tandem with Dow, Bursa's Industrial Index is expected to form mega wave II either in the form of zigzag A-B-C as shown below or a less damaging triangular A-B-C-D-E pattern. Whichever the case, I will have to put into practice "Sell in May and Go Away".

So watch closely the 10380 level for Dow

Asian Bourses

Hangshou West Lake

European and American Bourses are rather volatile at the moment due to debts problem in Europe as well as a 'war' between the US Authority and Wall Street over the issue of more regulation on Wall Street. Some believed that the 1000 points intra-day sell-off last Thursday was due to Wall Street's muscle flexing.

Will the investors moving their funds away from Europe and America and put them in Asia?

Shanghai SSEC is about to complete its Major wave (II). Watch out for the major wave (III) run.


Hang Seng Index is at the tail end of its wave C to complete its major wave (IV). I expect Hang Seng to run in tandem with Shanghai.



Japanese Nikkei has just started its mega wave II. It is expected to consolidate for a longer period.


Singapore STI is having the same scenario as Dow. More correction can be expected unless it is forming a diagonal wave (VI), (VII), (VIII) and (IX). A mega wave II scenario for STI and Dow will put them into the same consolidation phase as Nikkei.



Bursa Malaysia Industrial Index is similar to Singapore STI, expecting more correction in the near future unless the major wave (V) goes into extension. A worst case scenario is the mega wave II correction.

Dow - Major Wave (V) is confirmed

Hangzhou West Lake

Hi I am back from my holiday in China. In the last few days, S&P has broken its lower resistance line as shown below. So, it is clear that major wave (V) has been completed. Once the lower support line is broken, the wave 2 scenario is no longer there. The end of sub-wave v is the completion of major wave (V).

With a 7.3% pullback with magnitude equals that for major wave (II), 7.4% and major wave (IV), 7.6%, the best and the most optimistic scenario is a diagonal ending triangle with the formation of major wave (VI), (VII), (VIII) and (IX) as shown below.



The second possibility is the ending of the mega wave I at major wave (V) to be followed by a triangular A-B-C-D-E side way formation between two parallel lines or within a contracting or expanding wedge pattern.



The most pessimistic scenario is a zig-zag A-B-C formation as shown below.

A zig-zag formation is most damaging with a sucker wave B rebound before the onslaught of wave C. Most damaging also means one can have an opportunity to buy stocks at a cheaper price at the end of mega wave II before the starting of mega wave III.

Dow - High Volatility

US market dropped sharply at the opening of Tuesday trading, Dow dropped 160 points (1.5%) after one hour of trading. US market has been rather volatile lately because of European debts problem.

Judging from the pattern of technical indicators, the current pullback has to be of a higher degree. Based on the indicators reading, a wave 2 correction is confirmed at this stage but whether it will slowly develop into a major (VI) or even higher degree Mega wave II correction is of anybody guess.

I prefer to assume that the correction is wave 2 at this moment, somewhere at the sub-wave C of wave 2. As long as S&P can hold above the lower green trend line as shown below, wave 2 remains intact unless at the close of today's trading S&P sinks below the support line. Under such a plunge in indices, the probability that the major wave (V) has been completed becomes very high

I will be in Shanghai starting tomorrow until Sunday, so I won't be writing in the next few days until Sunday night.

Dow has given up 240 points (2.16%) at this moment and S&P is at 1174, dropped 28 points (2.33%), resting on the lower trend line. If at the close, all indices are well below the lower trend line, I will have to reduce my stock holding.

Hutong No. 10

Courtesy of kumpungboycitygal.com

Last evening, My daughter insisted that I must go to Lot 10 for dinner. OK, so we went. I have heard about this place for quite sometimes. I was told that this was the brainchild of Francis Yeoh of YTL. Instead of going around the Klang Valley or travelling to other places looking for his favorite foods at different corners of the town, he managed to convince all his favorite food stalls to have a counter at Lot 10 Lower Ground Floor food-court.

All the above stalls are Malaysia's best-loved food stalls, well known for their respective specialties. The Soon Kee Beef Noodle, for example, is being operated by the third generation now. The first time I went to the old Soon Kee shop was in 1979, somewhere near Leboh Ampang or Medan Pasar.

Courtesy of kumpungboycitygal.com

All the foods are delicious but the prices are 30% to 60% more expensive than what they charged at their original shops. Most likely is due to the high rental at Lot 10. One small bowl of Bak Kut Teh with rice is RM15.00. In Klang, at the same store, the price is either Rm 10.00 or less.

My advise is don't come to this Hutong alone, you will be very frustrated as you can only taste one out of the so many types of delicious foods.

S&P 500 - wait and see

The 158 points drop (1.42%) in Dow, 20 points drop (1.67%) in S&P and 50 pints drop (2.02%) in Nasdaq really caught me by surprise. I don't really expect that. Anyway, the unexpected can always happen in stock market.

With this latest development, it is possible that wave 2 of major wave (V) may not be over yet.

A more optimistic wave count is as shown above, where wave 2 has been completed and last Friday's drop can be the sub-wave ii as shown.

A less optimistic wave count is based on the possibility that the wave C of wave 2 has 5 sub-waves as shown above. Have to wait for a few days for the answer.

How can you call this bribery

I told you already, if we won the buy-election, I would give you Rm 3,000,000.00 and if I lost, I would be very down, you don't come to disturb me lah. The money is not from me, it is taxpayer's money, how can you called this bribery?


The school also needed the money badly. So happened I was there and so happened I saw the condition of the school, so happened the taxpayer got Rm 3,000,000.00. So I made a promise to give the money if I won, I don't think this is bribery.