World Wonders

Buyers Vs Sellers

Based on this 'most likely wave count' that I have explained previously, after forming sub-wave v, Dow in theory, has completed wave 5 of major wave (I), it should start to move downward to form its major wave(II). In the last few sessions, all the bearish candlesticks like doji, long-legged doji, spinning top and shooting star were formed indicating a daily tussle between the buyers and the sellers. Monday candlestick with a long lower shadow indicating heavy selling but buyers managed to minimize the damage at the end of the day. Tuesday and Wednesday 'doji' candlesticks indicates a balance of forces between buyers and sellers. Thursday saw the buyers came back strongly but lost control to the sellers at the end of the day to form a 'shooting star'. Friday was controlled by sellers but buyers came back strongly to have a positive close but there were more losers than gainers. These candlesticks indicate a balance of forces between buyers and sellers. I usually interpret this 'balance of forces' at market top as distribution and the 'balance of forces' at market bottom as accumulation.

KLCI - Revised Wave Count

My previous wave count for KLCI is as shown above. With the latest additional sub-waves to wave 5 and as the length of wave 5 being extended, the above count is no longer valid. I have come out with another alternative count as shown below. A possible ending point is 1100.

Next pullback will be sub-wave iv of wave 5. After which will be the sub-wave v of wave 5. If Dow and the rest of the Asian bourses started to consolidate, sub-wave v at 1100 will mark the end of the major uptrend that started in March 2009.

Dow - Which option is most likely ?

In my yesterday post, I have mentioned 3 possible wave counts for Dow. Which one is most likely? At this stage I can leave out the unlikely wave (I)-(II)-(III) third option where Dow will go all the way down to March 2009's low.

For option 1 and 2 as shown below



Option 1 - Dow at the ending part of wave (I), to be followed by the wave (II) pull back.



Option 2 - Dow has completed wave (I) and (II) and is in the initial stage of wave (III)

The volumes of Dow and Nasdaq tell me that option 1 is the most likely outcome. Volumes have been shrinking since early may. Volume divergences usually signal the ending of a major wave. Option 2 is less likely because usually wave (III) is more dynamic than wave (I) and it should have a higher volume than (I).

Looking At A Bigger Picture - Dow

George Soros: " We are at the midst of the of the worst financial crisis since the 1930s." "The current crisis is the culmination of a super-boom that has lasted for more than twenty-five years."

In his latest book, The New Paradigm For Financial Markets, George Soros writes that we are now in a financial crisis that's unparalleled. "It's the worst, most serious crisis of our lifetime."

Refer to the 1900 - 2009 chart for Dow as shown below, the "Super-Bubble" mentioned by Soros, that started 25 years ago, that was when Dow was around 1000 points. From that point Dow moved all the way to 14,164 (+1300%) by October 2007 to end its Mega Wave III (1932 to 2007).


The current crisis has been described by many as "the worst since the 1929's Great Depression". In fact, by Elliot's Wave Principles, the current bear market Mega Wave IV pull back is of the same degree as that of the 1929's great depression Mega Wave II correction. There is still a long way to go for Mega Wave IV correction. In Mega Wave II, Dow dropped from 380 in August 1929 to 41.6 by July 1932, a drop of 89% over 36 months.

The rebound from March 2009 low of 6547 to last Friday height of 8763 over a period of 3 months is really insignificant in the 1900 -2009 semi-log scale chart. To assess the March 2009 rebound we have to look at the 5-year chart below.

Mega Wave IV started in October 2007, Dow moved down from 14164 in 5 waves within 17 months to reach a low of 6547 in March 2009 for a 53% drop. I am adopting the hypothesis that the March low is the end of Major wave A. Currently Dow is forming its Major wave B that is likely to have 3 waves. Assuming Dow takes the same form as Hang Seng and Singapore STI as mentioned in my previous post, Dow will have the following wave count. Dow is likely to end its wave (I) at around 9000 provided there is no extension of wave from 5 waves to 9 waves.

However, Nasdaq's wave form is quite different from the above. It appeared to have completed its Wave (I) and (II) and it is already in its wave (III) as shown below.

If Dow is the same as Nasdaq, its wave count will take the following form. If this is true, Dow will not stop at 9000, It will punch through the 9000 level and will continue move up for its sub-wave iii.

Besides the above two possible wave counts, there is this very very bearish option which does not look likely at this moment. As shown below, major wave (III) has already been completed and both Dow and Nasdaq will have to move down all the way to March 2009 low or beyond. In stock market, sometimes the unlikely can also happen but I still like to maintain that this is an unlikely option at this moment.

Is wave 5 of the major wave (I) about to end ?

At the close of last Friday's trading, most of the Asian Bourses and Dow were still having their respective index being kept within a normal wave 5 formation as shown above. The length of wave 5 has not exceeded that of wave 3 yet. If the ultimate wave form shall remain as only 5 waves with a long wave 1 and short wave 3 and 5, and if there is no extension of the 5 waves to 9 waves, next week may witness the end of the current uptrend since March 2009.

In my June 2 posting, by assuming the length of wave 5 equals to that of wave 3, I have projected some figures as the likely terminal points for some of the indices, and as can be seen from the charts below, a normal wave 5 can be completed by next week to mark the end of the major wave (I) for Dow, to be followed by a major wave (II) consolidation unless Dow and the rest refuse to stop at my projected figures and proceed to develop a magnitude larger than wave 3 to acquire a different wave form as mentioned in my June 4 posting "the right count". Under that scenario, the current uptrend will likely to continue for another 2 months or more.

From Friday's closing of 8763, Dow needs another 237 points to reach 9000.

Nikkei's Friday closing is 9768, with another 232 points it will reach 10,000.

Hang Seng will have to put on another 1,321 to its Friday 18,679 to reach 20,000 next week.

Singapore STI closed last Friday at 2396, it has another 104 points to go to reach its revised 2500 level.
I have projected 1077 for KLCI. Last friday it closed at 1075 with 5 sub-wave i-ii-iii-iv-v as shown above. Wave 5's length is the same as wave 3's lenth at this moment, it is interesting to see how it will behave next week. Its ultimate wave form as usual depends on Dow's behaviour. If Dow cannot punch through 9000, most likely Dow has completed its major wave (I) and the long awaited Wave (II) consolidation is likely to begin.

Badan Warisan Malaysia

I went for a meeting at Bandan Warisan Heritage Services's Office yesterday. The building is located beside Jln Conlay - Jln Stonor junction. As I drove into its compound, wah-lau-eh! Appeared in front of me was a beautiful old colonial Tudor building with a big green field and tall trees. I found out later that it is a 1925 building.

Courtesy of greenselipar.com

Courtesy of Badan Warisan website

Badan Warisan Malaysia is a non-profit organization established in 1983 with the aim of conserving and preserving Malaysia's built heritage. For more information please visit Badan Warrison's website.

Besides the administration office, it has exhibition and conference facilities, a resource centre and a gift shop. I was really attracted by the books and many other items in the gift shop. In the main hall the exhibits were 'lacquered natural items' as shown below of Jurema Walendowsky Baker, a native Brazilian artist and designer.

"Jurema creates her artwork from discarded raw materials like dried coconut and palm tree leaves, as well as other spent flora and fauna. She transforms them into extraordinary pieces of art through her unique and complex lacquer process." You can go to Badan Warisan website for more information on her works.

An 'etched-glass lamps'

In fact I have came across Badan Warisan in 2006 when DBKL has given approval to demolish the Bok House as shown below. Badan warisan was fighting very hard to preserve the building but the Culture, Arts and Heritage Minister Dr. Rais Yatim at that time gave DBKL a freehand in approving the demolition application. He even challenged dissenters to prove that Bok House is of historic value. This heritage minister definitely has his own way of interpreting heritage and historic value.

To me, this building got her death sentence for sitting on a piece of expensive land with very high commercial value. This site is located within 250 meters radius of KLCC.

Bok House was also known as 'Restaurant Le Coq d'Or' from 1948 to 2001. With such a long history, this place must be full of happy as well as sad memories, tales, romances and love stories. And must be a popular place in those days for western foods. Looking at the photo it must be a nice place to bring your love one for a wonderful dinner.


Bok house was constructed by the late Chua Cheng Bok(1926), a self-made millionaire that built the business empire of Cycle and Carriage from repairing bicycles on a street corner.
Bok House was one of the grandest neo-classical mansion in Kuala Lumpur. His love for this building was so deep that he has entered a clause in his will that this house may not be sold for four generations, which was said to last until 2025. No body know what has happened to his will.

A partially demolished Bok House

Thing could have been different if he was of another race but then there wouldn't be Cycle and Carriage, and there wouldn't be Bok House.