Weekend Update - Dow, PJ Dev. Latitude Tree and MK Land

My two likely options for Dow remained the same.

For major wave (6) formation, wave b is about there. For zig-zag a-b-c formation, wave b cannot go too high.

But for sub-wave ii of the pessimistic mega-wave 2 formation, the current rebound can go for a 100% retracement to Dow's historical high of 16,576 level to form a double-top reversal pattern. Watch out for the double-top.

PJ Development (Rm 1.49)

Refer to my article on 16th November, 2013, after the 2 sens breakout above the 1.20 level on 15th November, the stock moved higher and then it dropped back to retest the 1.20 level before moving higher to complete its sub-wave iii.

 

On Friday, it gained another 6 sens with high volume to close above sub-wave iii. If the magnitude of sub-wave v is the same as that of sub-wave iii, sub-wave v and possibly wave (v) can end at 1.65 level.

PJ Development Warrant C closed at 65.5 sens on Friday, doubled its price of 33 sens in November. If the mother share were to add on another 25 sens, Warrant C might reach 90 sens. The fifth wave sometimes is quite unpredictable.

 

Latitude Tree (Rm2.66).

This is another stock that pulled away from its previous high with high volume.

It has to be the starting of mini-wave 3. Its wave (i) added 100%, and its wave (iii) added 150%. Can its wave (v) add on another 100%?

 

MK Land (Rm 0.435)

Another stock that has a break-out on Friday is MK Land. 

 

That is the sub-wave iii of wave (i) of its major wave 2.

Perception (Rm2.00)

Nancy Shukri, "Recently when I had tea in Kuching, there were 6 of us and it was only Rm12, is that expensive ?"

Well, 6 cups of tea at a Kopitiam (cannot be Starbucks or equivalent right?) for RM12, if you said it is not expensive, then it is not expensive loh. But for me that used to pay Rm1.50 for a cup of barley ice, at Rm2 that is another 33% increase in price. And if Nancy said that is 'sub sub sui', then it is 'sub sub sui' loh.

I have been shopping around, comparing prices, looking for value buy since I started working in 1975 and now ministers are teaching me how to compare prices and look for value buy. Sigh!

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Dow - Next is wave c ? or sub-wave iii ?

In its January down-trend movement, Dow has completed 5 mini-waves, the low at around 15,400 level can either be the wave a of its major wave (6)

Or the low is the sub-wave i of wave (i) of major wave (1) of its mega wave 2.

The current rebound, whether it is the wave b of major wave (6) or it is the sub-wave ii of wave (i), the magnitude is about there.

The next down-trend can either be the wave c of major wave (6) or it is the sub-wave iii of wave (i). If Dow moves down with steep gradient with high volume, than it is likely to be the sub-wave iii. However, if it moves lower at a slower pace with lower volume, then it is more likely to be the wave c of its major wave (6).



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Dow - Can forget about wave (x)

With last Friday's strong rebound, the magnitude is too big to be considered as mini-wave 6, we can forget about the wave (x) scenario.

We are left with 2 possibilities, a more optimistic major wave (6) formation with a 10% correction as shown below, to 14,750 level.

Or the pessimistic mega wave 2 formation as shown below.

With this pessimistic option, The worst that can happen is for the mega wave 2 to go all the way to 6,547 level for a 100% retracement within the next 24 months.

 

 Mega wave 2 of the super wave VII.

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Dow - The same 3 possibilities.

Optimistic Scenario

The correction is about to finish. Dow is about to complete its wave (x) at around 15,400 level. The next up will be its wave (xi).

A Higher Degree Correction
Mega wave 1 has more than 5 major wave. Dow has completed the wave a of its major wave (6). Next up is the wave b. Wave c will go to around 14,750 level.

Worst Scenario - The bubble has burst
Dow has completed its mega wave 1 and is currently forming its mega wave 2.

The worst that can happen is a 100% retracement. Mega wave 2 will go all the way to the starting point of mega wave 1, the 6,547 level, to form a double bottom reversal pattern.

Less damaging is a 35% pullback to 10,655 level.


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Dow - Correction not over yet

Dow closed the week at 15,698 level. It dropped 878 points or 5.3% for the first month of 2014. The 3 possibilities for Dow that I have mentioned previously remained the same.

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Happy Chinese New Year 2014

To all my friends and all visitors to my blog

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FBMKLCI

Following the 2% drop by Dow on last Friday, Nikkei 225 and Hang Seng dropped more than 2% on Monday.

Singapore STI dropped only 1%, Malaysia FBMKLCI dropped about 1.3%.

On last Friday, German Dax and French CAC 40, that closed their tradings ahead of US, dropped 2.5% and 2.8% respectively. FTSE dropped only 1.6%.

To catch up with the rest, FTSE has dropped about 3% at this moment, whereas Dow, Dax and CAC 40 dropped about 0.5%.

As usual, US market is the 'Taiko' (Big brother). It is up to the rich and powerful in US to decide when the assets bubble will burst and I believe they will try to hold on to the assets bubble as long as they can and they will try to look for an alternative outlet if possible.

Refer to my yesterday posting, we are lucky if the current correction for Dow is about 7% (15400 level) or 11% (14750 level).

FBMKLCI

My long-term reading for FBMKLCI remained the same, mega wave (1), (2), (3) and (4) and major wave 1 and 2 as shown below.

With today's 1.3% drop, the current correction can no longer be sub-wave iv as I have mentioned in my earlier articles. It is possible that sub-wave v and wave (v) as well as major wave 3 has ended if major wave 3 has only 5 waves.

If major wave 3 has ended, then the current correction has to be major wave 4. I am looking at a 16% pullback for FBMKLCI to 1570 level within the next 6 months

However if major wave 3 has more than 5 waves, then the current pullback can be wave (vi) correction, about 6%. That will bring the index to 1750 level, another 28 points drop.

Summary


The current pullback can either be
1. Wave (vi), 6% correction if the index can hold above 1750. Or
2. Major wave 4, 16% correction. Or
3. Something else.


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