A downgrade could trigger a sell-off in the country's equity and bond markets, and add pressure on the ringgit.

Click 'Asian Review' for the report.

FBMKLCI (1,614)

KLCI dropped 13 points today to close at 1,614 level.

Since the 1,620 level is broken, I have to forget about the 15 to 20 points mini wave 1-2 rebound that I have mentioned previously. Sub-wave iii may take the form of the sub wave i as shown above.

Sub-wave i dropped about 110 points from 1,730 to 1,620. If sub-wave iii has the same magnitude as sub-wave i, it is possible that sub-wave iii can drop to 1,550 level.

Be careful.

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FBMKLCI - Worst case scenario

FBMKLCI ( 1,627)

I am expecting a 15 points mini-wave 2 rebound. If the rebound failed to move above 1,640 and if KLCI started to break the 1620 and 1600 levels, be very very careful, very likely KLCI is going to drop very fast.

 

This worst case scenario is where the major wave 5 is a failure wave and the mega wave (II) has started.

Be careful.

Click 'Latest Development' for the report.

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OK not OK

This is OK, no big issue because as explained below

But when one reminded people what he has said

It is not OK, it is a big issue, it must be investigated.

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Dow OK, Crude Oil OK, KLCI not OK.

Dow moved above 18,000 and Crude Oil (WTI) closed higher than US$ 50.00 a barrel.

As I have mentioned previously, by mid 2017 I expect Dow to be above 20,000 in its major wave (7) movement.

And Crude Oil (WTI) to reach US$ 80.00 in its major wave 4 rebound.

Will KLCI move in tandem with Dow and Crude Oil price and has its major wave 5 run-up until mid 2017 ?

I am not very sure. Frankly speaking, at this moment I am monitoring for a possible 'failure major wave 5' as shown below.

Why? 1MDB loh. Weak Ringgit loh. Net out-flow of foreign investment loh. What else ?

When you have news like this:

and headline like this:

Click 'WSJ' to read.

I just wonder whether KLCI can have its major wave 5 run-up until mid-2017.

If KLCI can continue to move higher, that is very good.

But if today's 7.34 points drop marked the end of sub-wave ii,

and if KLCI continues to move lower from here and goes below 1620 and 1600 levels, be careful, be very careful, both major wave 5 and mega wave (5) might have ended.

The next down can be the dynamic wave (iii) of super wave (II).



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FBMKLCI (1,636) - I am still uncomfortable

Is the major wave 5 that I have been talking about still there ? 

KLCI has been moving side-way, bouncing within 1,620 and 1,640 levels for the last 3 weeks. Is that the mini-wave 1-2 ? If KLCI can move above 1,640 level, very likely, mini-wave 3 of b is on the way but it may not last for very long. After the completion of b the next down trend will be the c wave.

If we are lucky, this wave c can be the end of sub-wave ii of wave (iii) of the major wave 5. The next up will be the iii of (iii) of 5. Then we will not need to worry about a plunge until after mid 2017.

But if we are unlucky, and the major wave 5 has already been ended with a failure as shown below.

Then the coming rebound will complete the sub-wave ii of wave (iii), and the next drop is going to be the sub-wave iii of (iii).

Be very careful, especially when KLCI drops below 1,620 and proceeds to go below 1,600. Make sure to preserve your capital.

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My favourite song

FBMKLCI - I am uncomfortable.

Crude Oil WTI (US$49.59)

So far so good, crude oil continues with its major wave 4 formation. This is a monthly chart, one candlestick is one month. I am expecting at a a-b-c formation for this major wave 4. It may take 12 to 15 months to reach US$80.00.

Dow (17,873)

As I have mentioned previously, very likely Dow is forming its major wave (7). I am expecting more record breaking when wave (iii) starts. Dow may take another one to two weeks to complete its wave (ii).

However, if Dow failed to move higher in June, it is possible that major wave (5) marked the end of mega wave (1) and since May 2015, Dow has been forming its mega wave (2). If this is the case, wave C of (2) may bring Dow to 15,000 level or below.

FBMKLCI (1,637)

KLCI has been moving side way for too long ( because of 1MDB?) and the present wave form makes me a little uncomfortable. Is KLCI on course for its major wave 5 ? Or is it something else ?

Is it possible that the uptrend since 2009 has ended with a failure major wave 5 (a small and short 5) as shown below ? And KLCI is in its super wave (II) correction ?

Looking at the 5-year chart as shown below, if the 5-wave run-up from December 2014 to April 2015 is indeed a failure major wave 5, then the August 2015 low could be the wave (i) of super wave (II). The rebound from August 2015 to April 2016 could be the wave (ii) of (II).

From the 1-year chart, it is possible to have a a-b-c wave count for this wave (ii) of (II). Wave (ii) ended in April 2016 followed by 5 waves down i-ii-iii-iv-v to complete the sub-wave i.

If the rebound since 16th May 2016 is the sub-wave ii rebound, then the next down is going to be the sub-wave iii of wave (iii) plunge. It will break the 1620 level and then the 1600 level. Be very very careful, it is going to be fast and furious and can be very damaging, if this failure major wave 5 scenario is found to be the correct wave count.

Watch out for more damaging news on 1MDB from oversea.  


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