What Buffett said on Friday

1. He would be 'surprised a lot' if stock prices fell 50% in the near future.
2. There will be another financial crisis "someday" in the years ahead.
3. Dow will reach 100,000 but he won't live to see.

Click "Warren Buffett" for the CNBC report.

He has ruled out my 'Option 2' as shown below, where mega wave 1 has ended and Dow is forming its mega wave 2 that can go as low as 6,547 level, the March 2009's bottom.

So, he think that this scenario won't happen at this moment and in the near future. May be a 10% major wave (6) pullback is more likely, that is Option 1.

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Dow - Looking for a small surge before next major correction

Dow dropped 231 points (1.4%) on Thursday to close at 16,108. That can either be the wave ii of b.

Or it can be the wave b of sub-wave ii of mega wave 2, this is very bearish.

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Malaysia Boleh

"Eliminating me from the political terrain will not be the end of Karpal Singh. It will in fact lead to the rise of many Karpal Singhs."

 

"I am foregoing retirement from active politics to right an injustice for the benefit of my grandchildren."

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FBMKLCI - Rebound may have ended

FBMKLCI dropped 10 points to close at 1822 today. With that, the index has punched through its short-term lower resistance as shown.

It is very likely that the rebound since early February has ended. I expect the index to move lower for the next 3 to 4 weeks.

Option 1- Wave (vi) formation

This is a more optimistic option

FBMKLCI is likely to drop to 1750 level to complete the wave (vi).

Option 2 - Sub-wave iii

This option is possible but less likely at this moment.

Option 3 - Major wave 4

A pessimistic option. 

I expect the index to go to as low as 1574 level for another 13% drop

I am still talking about the same 3 possible options that I have mentioned previously but with today's 10 points drop, Option 2 becomes less likely. Another 10 points drop tomorrow will knock out option 2.


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Look at Ukraine for direction.

Dow (16,168)
Due to the escalating conflicts between Russia and Ukraine, Dow dropped 0.94% or 153 points to 16,168 on Monday. The drop marked the end of mini wave 3. Can this be the end of wave b rebound ?

Or it is the end of sub-wave ii of wave (i) of major wave (1) of mega wave 2 ? The bubble has burst. ?

It is also possible that sub-wave ii has not ended yet, especially if Dow has a strong rebound on Tuesday. I am still keeping the double-tops formation for sub-wave ii as an option. A seven-waves formation as show below can pave the way for a double-tops.

FBMKLCI (1,826.46)

FBMKLCI continues to hover around 1820 level. 5-Year wave count is as shown below with possible wave (vi) option.

If the index starts to move lower from its current level, it is likely that the last high is the end of wave b.

However, if the index breaks out of the upper short-term trend line, it is a bullish mini-wave 3 of sub-wave iii of wave (v).

Option 3 is the most pessimistic major wave 4 correction. The next down is the sub-wave iii.

Major wave 4 can possibly reach a low of 1,574 for a 16% pullback.

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Sunday Update

Dow (16,321)

My possible options for Dow remain the same. Dow is either forming its major wave (6)

Or it is forming its wave (ii) of its major wave (1) (going south) of its mega wave 2.

Or the optimistic wave (xi) that I have previously ruled out. I have to put it back if Dow continues to move higher for more historical highs.

PJ Development (Rm 1.44)

 

It is possible that its wave (v) and its major wave 3 has ended.

 

Latitude Tree (Rm 2.61)

 

It has reported an impressive earning of 19.52 sens per share for its second quarter ending December 2013. With its previous quarter earning of 15.02 sens per share, the 1st half-year earning is 34.54 sen a share.

The recent pullback can be the sub-wave 2 of its wave (v)

MK Land (Rm 0.435)

Its sub-wave iv is almost completed. Next up can be its sub-wave v.

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The Bears

George Soros has doubled down on his bet that the S&P 500 is headed for a fall.

Marc Faber is another investor that's prepared for a market collapse, " ..... I am hoping for the market to drop 40% .... "

To read more, click 'Soros and Faber Are Betting On A Market Collapse'.

A 40% drop for Dow is a 6,630 points pullback from its 31st December 2013's peak of 16,576 level to about 9,950 level as shown. That is the mega wave 2 of the super wave VII.

Many investors and analysts believe that we are currently in the midst of a stock bubble. And of course there are also other experts such as Joel Kurtzman that have different opinions.

That is also basically how a market can exist, you always need a seller and a buyer for a transaction.

I am a strong believer that we are in the midst of a stock bubble that will burst ultimately. But I have no idea when the bubble will burst or whether it has already burst after setting its historical high of 16,576 on the last day of 2013.

 

At this moment, after 2 hours of trading, Dow continues to move higher by another 150 points (+1%) to 16,253 level, whereas Nasdaq is currently trading in record territory at 4,305 level, 33 points higher than its previous historical high of 4,272 recorded last week on Tuesday. The market sentiment at this moment is generally positive but don't forget that the positive sentiment can turn negative with two or three days of sharp losses.

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